E-Commerce: Turnover Of Otto Group Increases To €7.7 billion
On Tuesday one of the world’s biggest online retailers, Otto, announced that their online revenue increased to €7.7 billion over the financial year 2018/2019. This is an increase of 4.5% in comparison to the year before. A large proportion of the revenue generated by the German e-Commerce giant has come from the Otto Group’s brands that are active in Germany. The retailer is motivated to continue expanding its platform, as it has done over the previous twelve months. By 2020, Otto’s customers should be able to access products from up to 3,000 new partners. Otto has said that this year they are planning on making the platform an “ecosystem to external brands and retailers”.
E-Commerce: Strong Customer Authentication Likely To Cost European Businesses
In April we reported that due to the growing threat of e-Commerce fraud in Europe, a new regulation called Strong Customer Authentication (SCA) is being implemented in September. SCA makes it mandatory for the customer to provide secure details at the checkout on top of their credit card information. Customers will be asked to provide two sources of information from three categories – something they know (e.g. PIN number), something they have (e.g. bank card), and something they are (e.g. their fingerprint). Although this extra layer of security is a great advantage, it may cause friction at the checkout and if businesses across Europe do not prepare properly for SCA, they may see great revenue losses. When a similar regulation was put into action in India in 2014, businesses reported an overnight conversion drop of over 25pc. It is said that if the same were to occur in Europe’s €600 billion online economy, there could be an economic loss of €150 billion.
VAT: Denmark to Adjust VAT Registration Rules in Triangulation Scheme
Denmark’s simplified triangulation mechanism is an EU scheme which is applied when there is a supply chain of goods made up of three businesses from different Member States (classed as A, B and C). The businesses are VAT-registered in their Member States and goods are delivered directly from the first supplier in A to the last customer in B. Without the application of this scheme, the business in member state B would need to be registered for VAT in either A or C, but through triangulation the business is relieved of this requirement. Under current Danish rules, the middleman (business in member state B) cannot be registered for VAT in either A or C in order for triangulation rules to apply. However, from 1 July, the restriction is being removed and triangulation will still apply even if the middleman registers for VAT in A or C. The change will open up new opportunities for businesses in Denmark and will allow more companies to take part in the triangulation scheme.