Report: UK Consumers Distrust E-Commerce

British e-commerce is being hampered by consumer fears about Internet security, according to a report released Wednesday by the United Kingdom’s National Consumer Council.

The report, “E-Commerce and Consumer Protection,” found that while 26 percent of British adults have access to the Internet either at home or at work, only three percent regularly shop online because they view online shopping as more risky than shopping at brick-and-mortar stores.

“Unless the total online shopping environment — sites and payment mechanisms — is made more secure, some consumers will never have the confidence to explore the opportunities,” said Anna Bradley, National Consumer Council Director.

Internet Users More Wary

Unfortunately for British e-tailers, the more consumers know about the Internet, the more likely they are to have concerns about security and privacy. Overall, 39 percent of those surveyed were concerned about releasing credit card details over the Internet. Of those who actually use the Internet, 54 percent had concerns.

Also, although 22 percent of all surveyed expressed concerns about releasing private information, that number jumped to 32 percent for the Internet-using respondents.

“It is especially worrying that Internet users are more — not less — likely to harbor doubts about shopping online,” Bradley said.

Not All Bad News

Despite the concerns about the security of shopping online, some British shoppers acknowledged the benefits of e-commerce. Forty-two percent of all respondents and 55 percent of Internet users said that not having to travel is the biggest advantage of shopping online.

The speed and ease of shopping online was also cited by survey respondents, who like the fact that the goods are delivered and that they can comparison shop more easily online.

One shopper cited another advantage, “You don’t feel pressured into buying it because you don’t have sales people on the Internet.”

A Multitude of Concerns

Still, other worries remain, especially with online shoppers. Thirty percent of Internet users said they were concerned about fraudulent suppliers, compared with 24 percent of those surveyed who were not online.

And 55 percent of Internet users said shopping online was riskier than shopping offline, but only 35 percent of non-Internet users agreed.

“This heightened awareness is evident across the board, from delivery problems and not being able to touch goods to releasing personal information,” Bradley said.

National Loyalty

Brits who are willing to dive into online commerce would rather take the plunge with an established British retailer than with a foreign company. The survey found that 19 percent of Internet users and 28 percent of all respondents would never purchase online from a foreign e-tailer.

“It’s the global aspect,” one male respondent to the survey said. “If you buy from the UK the risks are about the same. When you start going abroad, I’d certainly get the heebie-jeebies about that.”

Respondents also believed that if something went wrong, it would be easier to resolve a dispute with an UK e-tailer. One female respondent said, “You can always go and knock on the door if it’s in England.”

American e-tailers can take heart that when Brits do consider buying from abroad, the U.S. is usually their first choice. A male respondent said, “I tend to buy from the States anyway, And I think their laws are stricter than they are here.”

Earlier Study Predicted Boom

Notably, according to a May study by Fletcher Research, online consumer spending in Britain, Wales and Scotland will soar from $2.6 billion (US$) in 1999 to over $30 billion by 2005. The report said that wireless devices and interactive TV will fuel the trend.

Online sales in the United Kingdom will account for 7.5 percent of the UK retail market in 2005, according to the report, representing a significant rise over a 0.25 online market share in 1999.

The National Consumer Council is a non-departmental public body, set up by the UK government in 1975. A large part of the Council’s funding is grant-in-aid from the Department of Trade and Industry.