4 Trust Issues Germans Have Towards Foreign Online Shops
Reasons Why Germans Are Hesitant to Buy From Foreign Online Shops (1/2)
In general, one can say the German economy is quite international, and Germans are used to as well as open to trade with foreigners. Germans also get used to buying from foreign online shops and increasingly use the option to shop from online retailers abroad. As we have shown in our article about e-commerce statistics in Germany, seven out of ten people in Germany stated that they shopped online in the previous three months. The percentage of people in Germany who buy from foreign online sellers more than doubled from 14 percent in 2013 to 29 percent in 2019 as you can read in our article about who in Germany buys from foreign online shops and why.
However, unfortunately, German customers still overcome some negative expectations and worries when it comes to buying from foreign online shops. Still today, German consumer protection organizations warn about buying from foreign shops. They advise German consumers to be cautious, and if they have any doubt, to rather not buy from this shop. Moreover, as we have examined before, foreign online shops have not yet utilized their full potential in Germany.
Skeptics about foreign online shops
To get a clear overview about the reasons Germans hesitate to shop from foreign online shops, we categorized the main aspects found by a study published by Idealo (see link below) on how German customers feel into two mayor obstacles for foreign online shops selling to Germans. The first category of obstacles we want you to know about is trust issues.
Germans are warned about scams form foreign online shops by consumer protection organizations
The problem is on the one side that Germans consumers heard about scams of foreign companies or experienced it themselves. According to the consumer protection organization Brandenburg, 4.4 m Germans have been victims of fake shops, and not few of these shops come from abroad. Unsurprisingly, Germans are warned about scams form foreign online shops by consumer protection organizations and even by the government. Moreover, it is just the nature of cross-border trade that it is more difficult for the consumer to assess the company on how trustworthy the online shop is due to cultural differences, language barriers, and more difficult claim enforcement.
Unfortunately, if central and eastern European companies do not prevent it, they will get discriminated to the extent that German consumers refrain from purchasing.
How much German consumers worry about the trustworthiness and honesty of a foreign company depends on the country. It depends on the subjective reputation of the other country and possibly on experiences made with people of this country (as discussed in our article information asymmetry in cross-border sales). Central and eastern European countries, for example, are affected more by the trust issue due to a negative bias in this regard. Unfortunately, if central and eastern European companies do not prevent it, they will get discriminated to the extent that German consumers refrain from purchasing. Several of our customers from eastern Europe had such problem. Luckily there are some measures to gain trust, and thereby increasing conversion rate and decreasing bounce rate. We will write about that in one of our next articles, so subscribe to our newsletter to find out about how to gain the trust of your German target group.
The good news is, however, that Germans increasingly buy online form shops abroad, and those who do it are often satisfied. That more and more Germans buy from foreign online shops will help to decrease the issue by getting more positive experiences with online shops from other countries. However, that Germans have problems trusting foreign entrepreneurs is still a big issue since it holds back foreign online shops from their unused potential in Germany.
So, many German consumers do not trust foreign vendors, but what are they actually afraid of?
The 4 trust issues Germans have
Do I receive my product as described?
Obviously, this is one of the main worries. Fifty-four percent are concerned about the trustworthiness of the foreign retailer, according to a study published by Idealo. Would it be a scam? Will the online shop not send me the product as described? Or would it be not the original brand as ordered but a counterfeit? Fifty-seven percent of Germans are worried that they would receive counterfeit, according to the research published by Idealo. Unfortunately, some Germans might have a “Balkan bazaar” in mind, when they see that the online shop is selling from eastern Europe. In the case of prepayment, they might wonder if they would receive the product at all?
What if there are any problems?
How would the online shop react to possible problems? Like, when the customer is not happy with the product, when there was a problem in the delivery process, or when the product for whatever reason was broken or will break after a short time? Will there be problems with the warranty or guarantee? With 75 percent, this is the issue most people in Germany worry about, according to a survey published by Idealo. How will the foreign vendor solve the problems, and will they keep up with their promises? And in the case of a problem and the vendor does not (or cannot) keep his obligation, how to enforce the claim?
Is the payment safe and should I pay before I have the order?
Would it be safe to pay at all? Would the payment procedure be safe? We should not forget that Germans are still more conservative regarding online payment, especially older consumers are worried about online payments in general. When it comes to cross-border e-commerce, Germans are even more skeptical regarding online payment. How could I get the money back if something goes wrong? And is it safe to pay before I have the product?
For people from other countries, data protection might not be such a big issue or might even sound ridiculous, but Germans are afraid and protective of their data. Even in the corona crisis Germans are very conservative about the data protection in the Corona Warn App. Of course, also Germans got used to that Facebook and others collect their data and utilize it economically. But we still do not like it and Germans expect it from social media but not form retailer. So, when it comes to buying from online shops, Germans demand that their data are handled respectfully and carefully. When they buy from online shops abroad, they worry about their privacy, as the server and company are abroad and they might have lower standards. Fifty-one percent worry about data protection when buying online from abroad, according to the study published by Idealo.
Consumer Protection Organisation Brandenburg (2018): Fake-Shop Betreiber selten greifbar, verbraucherzentrale-brandenburg.de/pressemeldungen/presse-bb/fakeshopbetreiber-selten-greifbar-29674 [24.03.2020]
Idealo Internet GmbH (2018): Keine Angst vor Bestellungen in ausländischen Onlineshops, idealo.de/magazin/2018/07/30/keine-angst-vor-bestellungen-in-auslaendischen-onlineshops/ [24.03.2020]