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Belgium ‘missed’ the online sales trend, meaning lost profits and lost jobs

10:10 01/06/2022

Belgium “missed” the wave of online sales growth over the last decade or so, resulting in a loss of billions of euros and thousands of jobs, according to a study from the Federation of Enterprises in Belgium (FEB).

The study found that the country missed out on 0.3 points of annual GDP growth between 2012 and 2019 by not hopping onto the online sales train soon enough, forfeiting the bulk of online shopping profits to companies like Amazon.fr in France, Bol.com in the Netherlands and Zalando in Germany.

In addition to the lost GDP growth potential, FEB estimated that Belgium missed out on €1 billion and 6,000 jobs annually during the seven-year timeframe, for a total of €7 billion for the economy and 42,000 jobs for the labour market, Le Soir reports.

Online shopping boomed during the pandemic and its related lockdowns, which forced many consumers to turn to webshops. But Belgium missed out on that growth.

“We arrived at this conclusion and these figures by observing the evolution between 2008 and 2021 of the added value of our trade, transport and catering sector, which together represent 18% of our economy,” said Edward Roosens, chief economist at the FEB.

“We then compared the growth of these activities with that of the Netherlands, Germany and France: the three sectors grew in value by 23% in the Netherlands, 10% in Germany and 5% in France. In Belgium, on the other hand, they fell by 2%.”

The FEB says that Belgium’s decline in the sector stems undoubtedly from insufficient growth in the e-commerce sector, especially because “since 2008, the volume of distance sales in Europe has increased by 220%, whereas the retail sector as a whole has only grown by 15.6%.”

Consumers in Belgium increasingly shopping online

They note that over the same period, Belgian demand for goods and services sold online has increased by 293%, “proof that the country’s consumers, even if they have been slow to take up the idea, have ultimately proved to be fond of e-commerce.”

But Belgian retailers weren’t the ones tapping into that exploding demand: between 2009 and 2019, the volume traded by Belgian sellers only increased by 95%, according to FEB’s study.

Meanwhile, German sellers saw volume grow by 269% and for Dutch sellers that figure was 253%. 

“Not only is the growth in supply in Belgium lower than in our neighbouring countries, but the share of distance selling in total retail trade is also the lowest in Belgium: less than 3%, compared to 12% in Germany and 10% in the Netherlands,” the FEB said.

They also noted that the added value of e-commerce has increased by only 95% in Belgium, compared to 269% in Germany and 253% in the Netherlands.

Belgian companies less competitive compared to neighbours

There are two major reasons why Belgian companies largely missed out on the e-commerce windfall: less attractive prices and (slightly) longer delivery times than those of foreign online shops. 

“The first weakness, price, is explained by the 15% higher wage costs in Belgium compared to the average in France, the Netherlands and Germany,” explained Roosens. 

“The second is due to night work, which starts at 22:00, and to wage supplements of between 25 and 40% for working these later shifts. In the Netherlands, the extra cost of night work is only 3 to 5%.”

The FEB says it’s looking forward to the implementation of the federal government's labour market reform, which provides for greater flexibility in working from 20:00 to midnight and for pilot experiments with voluntary workers, company by company. 

They also expressed strong support for a reduction in wages compared to neighbouring countries. 

“This handicap had been reduced from 16% to 10%, but because of four indexations in just nine months, we expect to have a 15% gap with France, the Netherlands and Germany by the end of 2023,” said Roosens.

But trade unions have been largely sceptical of plans to decrease compensation for those who take night shifts, and especially of wage cuts.

“For us, social consultation will remain essential concerning evening work, which we are not opposed to,” explained Delphine Latawiec, national secretary of the CNE Commerce union. “Indeed, it is not only a question of extra pay but also of health. This requires support.”

Still, Belgian retailers looking to join the e-commerce movement now have already lost substantial ground by not having done so sooner. 

Those planning to enter it today will have to go up against the established giants like Amazon, Bol and Zalando.

Photo: Coolblue distribution centre Tilburg, Netherlands © Belga/Kristof Van Akkom