The Economist and Panprices on shopping without borders
Estimated reading time: 3 min
Since the very inception of what later became Panprices back in 2018, one of our big fascinations has been that somehow trivial obstacles hinder the phenomenon of cross-border e-commerce from growing. Our motivation as a small startup has been, in a time where nations all over the world are drifting further apart, that we could actually make a difference in enabling consumers and sellers from different cultures to come together to trade with each other. Time and time again, history has shown that when we trade with each other, we not only create value but better understand each other and decrease the risk for conflict.
After having lived and breathed cross-border e-commerce, we were more than excited to read the excellent article “The Pampers Index: What Diaper Prices Say About Europe” in The Economist recently. From our vast firsthand knowledge from helping consumers shop online from abroad, we can confirm many, if not all, of the issues raised in the article.
One study showed that online prices varied by 20% for items like electronics and up to 40% for clothing between EU countries.
In an initial niche of consumer electronics, we were able to see that consumers have the possibility to save even more than 20%. For many products, we are able to find deals that are up to 50% cheaper than in the local market. Finding price discrepancies, is one of the main incentives why consumers shop from abroad. The other one is that shopping from abroad enables consumers to find products that are not available in their market. “Pan” in Panprices stems from the ancient Greek word for “all”, which is what we are trying to do: offer all products so consumers have a much bigger assortment to choose from.
Cross an American state border and little change, for most businesses; cross a border in the EU and they face a new legal regime in a foreign language, with a different consumer culture. It is also not an easy process for consumers. It’s one thing to run Google Translate to read a newspaper article, quite another to check what zur kasse gehen means in the middle of a $ 1,000 purchase
With this statement, the author further hits the nail on the head when it comes to issues that arise when shopping from abroad. Even when the consumer has the knowledge of where products are available to buy, actually purchasing them is another question. In trade, trust is the key! What people don’t know, they also don’t trust. And the suspicion grows exponentially when it evolves risking $1 000 of hard-earned money. Panprices is trying to solve this gap by being the safe and reliable partner consumers need. We made it our goal to vet every seller we list on our website and guarantee that they are trustworthy. By offering local payment solutions, such as Klarna, shopping on Panprices eliminates the risk of sending credit card information to online shops consumers have never seen before. Additionally, a team of sales experts assist consumers every step of the way - from searching for a product to delivering it to their doorstep.
Arbitraging these differences away is not simple. Borders matter in trade and they still exist in the EU […] Getting products from where they are cheap to where they are expensive is often painfully slow or prohibitively costly, …
We can speak from first-hand experiences that it seems as the existing incumbents are stuck in regional thinking. We learned that consumers care very little about the fact that their new digital camera came from a Spanish seller compared to a local one when it is the exact same product and they know that they can get help if anything unforeseen happens. Why should consumers pay more for the exact same product? This is one of the main questions that pushes us forward.
In 2010, barely one in ten EU citizens bought something from a website in a different country; in 2018, 28% did.
Even though this trend is starting to take shape, we believe there is a need to and great value in speeding it up. We believe that Panprices can greatly contribute to this development and help make shopping across borders become much more of a normality.
Online arbitrage could become an unlikely engine of European integration. But it would be up to citizens.
We have come closer to solving a lot of these issues raised above and believe that our services will be key in facilitating citizens to make this integration become a reality. Help us share the news! Talk to your friends, family, and significant others about cross-border e-commerce and tell them about Panprices.
Source: The Economist.