The impact of competition on consumer prices for cross-border parcels

Transcription

1 The impact of competition on consumer prices for cross-border parcels Sonja Thiele, Alex Kalevi Dieke (WIK) 25th Conference on Postal and Delivery Economics, Barcelona 26 th May

2 Introduction European Commission policy on prices for cross-border parcels focusses on consumer prices Draft parcel regulation aims at increasing transparency and making markets work more effectively What is happening on parcel markets? Economies of scale Economist s expectation E- commerce growth Lower prices New players Are cross-border parcel markets already moving into the desired direction? Analysis of prices in ten countries: Austria, Belgium, Czech Republic, Germany, Ireland, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom. 1

3 Agenda State of e-commerce Competition on parcel markets Price developments Conclusions 2

4 State of e-commerce 3,000 2,500 2,000 1,500 1, UK IE SE NL AT DE BE CZ ES PT E-commerce per capita 2015 Average annual increase of e-commerce spent per capita Online shopping in foreign webshops more common in small countries Share of consumers buying online abroad has grown strongly 40% 35% 30% 25% 20% 15% 10% 05% 00% UK consumers spend most on e- commerce Southern European countries + CZ at the far end Countries with low e-commerce expenses per capita may catch up due to higher growth rates Last online purchase in last 12 months from other countries (EU or outside EU) (%) PT ES CZ AT BE IE EU-28 SE NL DE UK Last online purchase in last 12 months (%) 3

5 Competition on parcel markets Competitive domestic parcel markets Domestic parcel and express markets are competitive USP market shares in domestic parcel and express markets <60% Parcel operators with international networks active in all ten countries (eg DHL, DPD, FedEx, GLS, Hermes, UPS) USP Market share domestic AT 50-60% BE 10-15% CZ 25-30% DE 40% ES 15-20% IE <20% NL 55%-60% PT 20-30% SE 30-50% UK 30-35% Sources: AT: RTR; BE, CZ, IE, PT, SE: WIK estimate; DE, ES, UK: Ofcom 2016; NL: Marktscan Pakketten 4

6 Competition on parcel markets Parcel shop networks needed for B2C delivery Parcel shop networks of competitors compared to the USP s public postal network 120% 100% 80% 60% 40% Traditional B2B operators enter B2C markets Access network needed for pick up and returns In AT and DE, competitors parcel shop networks match incumbent network 20% 0% AT BE CZ DE ES IE NL PT SE UK Operator with largest network Operator with second largest network Operator with third largest network Consumers can send parcels via parcel shop network 5

7 Competition on parcel markets Cross-border markets Competition on cross-border delivery markets lower than domestically No or little choice for consumers sending parcels cross-border Change in some countries as international B2B operators migrate in B2C markets and offer access networks for consumers in destination countries 6

8 Competition on parcel markets Intense competition for Austrian cross-border parcels Strong e-commerce relations with Germany International inbound parcels ~25% (RTR) 5 biggest operators: 78% market share cross-border Biggest competitive networks by DHL (2,000 parcel shops) and DPD (1,200) intensive competition for cross-border parcels Benefit to e-retailers and e-commerce customers but also to other parcel operators outside AT find delivery partner in Austria easily 7

9 Price developments Very different price level for cross-border parcels Average Consumer prices for cross-border 2kg parcels (2017) AT BE CZ DE ES IE NL PT SE UK Min 2kg (2017) Max 2 kg (2017) Source: Public price lists of USPs Paper compares consumer prices for cross-border parcels, eg 2kg priority parcel posted at the counter, no express product, insurance included (200 ) 1kg letter/packet posted at the counter, no insurance Prices from/to all destinations Consumer prices for 2kg crossborder parcels range between (CZ) to 44 (IE) Maximum price below 20 only in AT and DE 8

10 Price developments Price changes 80% 60% 40% 20% 00% -20% -40% Real price changes for national and int'l large letter/packet services (1 kg) AT BE CZ DE ES IE NL PT SE UK 80% 60% 40% 20% 00% -20% -40% Real price changes for national and international parcel services (2 kg) AT BE CZ DE ES IE NL PT SE UK Source: Public price lists 2013 and % -60% National International min International max National International min International max Mixed picture! Parcel prices (domestic and cross-border) have increased in several countries 1kg packets: cross-border prices increased less than domestic prices in 7 out of 10 countries 2kg parcels: some USPs have considerably lowered cross-border prices, eg CZ, ES, UK 9

11 Price developments Business customer prices are lower than consumer prices 50,00 45,00 40,00 35,00 Domestic and international parcel prices compared to average revenues per parcel (national USPs) Average revenues per parcel as an indicator for parcel prices paid by business customers Business customers pay much less than consumers 30,00 25,00 20,00 15,00 10,00 5,00 0,00 AT BE CZ DE ES IE NL PT SE UK Domestic price 2 kg (2017) Min 2kg (2017) Max 2 kg (2017) Average revenues per parcel (USP 2015) Source: Public price lists 2017, annual reports of USPs, market statistics of NRAs Average revenues per parcel particularly low in CZ, DE and highest in IE Average revenues seem to have declined since 2013 but data base weak Note: Data on average revenues may refer to different parcel definitions and different product mix 10

12 Conclusions A process towards lower consumer parcel prices USP s consumer prices for cross-border parcels have decreased in a number of countries Where competitors operate parcel shop networks matching the USP s network an impact on prices seems is visible (in Austria and Germany) Indications that average revenues per parcel (as a proxy for business customer prices) have decreased but more research needed Economies of scale and increased competition seem to have started a process towards lower consumer parcel prices Service quality and choice for consumers have improved 11

13 Conclusions Prices decreased since 2013 but not overall Potential reasons 1. Quality of service improved (tracking, speed, more delivery options ) 2. Investments needed to meet customer expectations 3. Competition may not be sufficient to have an impact on USP consumer prices (eg IE, PT, SE). Competitors have smaller parcel shops networks 4. Regulation and USO: USPs increase parcel prices to compensate for falling letter revenues? 12

14 Thank you for your attention! Sonja Thiele WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH Postfach Bad Honnef Germany Tel.: