The Best Deal Around

Anke Olafsson knew exactly what kind of car she wanted: a used four-wheel-drive Subaru Outback. Trouble was, that model is not only pricey but pretty hard to find in the Swedish city of Jonkoping, where Olafsson lives. So she got Kurt Gustafsson, her local used-car dealer, to find her one--on the Internet. Gustafsson went straight to a Munich-based Web site called Autoscout.de, a car emporium listing more than 130,000 new and used models in garages and other dealers' lots all over Europe. Navigating through the German site's Swedish-language version, he zeroed in on a private owner in Frankfurt, who happened to have a Subaru handy. This week Gustafsson will travel to Germany to pick up the car for Olafsson.

These days, such deals are making Europe's borders fall faster than you can say "single market." Like Autoscout, online retailers are making shopping abroad more accessible by offering multilingual sites. And with many of them already pricing in euros, comparison shopping has never been easier. As a result, cross-border purchases are grabbing an increasing share of Europe's 5.6 billion euro e-commerce market. A recent study by Forit Media Services in Frankfurt found that half of German online shoppers have already used the Net to buy from abroad. The Internet is fast creating a continentwide virtual shopping mall.

A single market has always been the goal of Europe's new currency. By doing away with conversion rates and exchange fees, currency union makes it easy for consumers to hunt for the best deals around. And eventually, with more trading across borders, the huge price differences that make some consumer goods cost twice as much in one country as in another are bound to disappear. But it's on the Internet--borderless by nature and a comparison-pricing tool par excellence--that the new, transcontinental shoppers' paradise is already taking shape.

Europeans are catching on fast. To get a better price or track down an item hard to find at home, they are clicking beyond their corner shops and local dot.com vendors. And they are drawn in less by elaborate marketing campaigns than by enthusiastic word of, er, mouse. German students, for example, have found they can pay less for English-language educational literature from U.K.-based book dealers like Waterstone's Online than from an importer at home--even though Waterstone's does no marketing in Germany. Ditto for Finnish cooks finding Umbrian truffles at Italy's Saporiumbria, an online vendor of the rare mushroom. "In Europe, you're going to get 20 percent foreign orders without even trying," says Nick Jones, online-industry analyst at Jupiter Communications. But why settle for just 20 percent? Today more and more ambitious e-tailers are hunting for customers Europe-wide from the day they set up shop.

Take Chateau Online, Europe's hottest Internet wine store. The Paris-based company sells 1,000 different bottles from around the globe--picked by a Europe-wide panel of tasters--at an average discount of 20 percent below supermarket prices. The site offers an online swap of tasting notes and a bottle-on-demand service to find rare vintages. If you need to choose wines for your next dinner party, the resident sommelier can help you. From its launch in October 1998, Chateau Online has offered three distinct sites, in French, German and English. Already half its customers live outside France, mostly in Germany and Britain. "We've delivered all over Europe from the beginning," says the 33-year-old CEO, Gregory Salinger.

To get all those foreign customers, Salinger has had to offer more than translations on his site. "We tailor our offers to each market," he says. "The British like to experiment with South African and Bulgarian wines, the Germans prefer Spain and Burgundy and the French only drink French." Salinger is set to launch Spanish, Italian and Dutch sites early next year. For a traditional liquor-store chain, going international at that speed would cost a fortune--and be a logistical nightmare.

So it's no wonder that well-organized online outfits are shaking up some of Europe's coziest markets. In Belgium, Web bookseller Proxis sells French-language books at a discount to neighboring France, where it's illegal to sell a book for less than the publisher's suggested retail price. Sweden-based Letsbuyit.com is gathering together shoppers' orders from all over Europe to get volume discounts on just about anything. In Sweden, that approach has already pushed down the price of this season's Christmas trees from >23 retail to just >4.50 via the site. In Britain, Volkswagen forbade its local dealers to trade with Net seller Autobytel for fear of undercutting car prices in the U.K., among the highest in Europe. But even Volkswagen seems to know the battle is lost. Quietly, the company has been leveling its prices. In 1993 a SEAT Ibiza was 42 percent more expensive in Germany than in Portugal; today it's only 6 percent more.

Volkswagen's headaches are a blessing for consumers. What's more, the euro will magnify the Internet's impact as a comparison-shopping tool. Already, buyers from Lisbon to Helsinki can click through sites like Proxis, Chateau Online and Autoscout and find deals priced in euros. "Who wants to go from site to site and compare lire, pounds and Deutsche marks?" says Kurt Staelens, who founded Proxis in 1997. "The euro is the perfect comparison tool." This January the bookseller became Europe's first site to accept payment in the new currency, though only 4 percent of customers have used that option so far. DealPilot, a Heidelberg-based company whose Internet shopping assistant is already popular in the United States, has just extended its service to Europe. Customers can use it to scour the Web for the best price on any one product, automatically converting prices to euros. "As a customer I can now see immediately where the price is the lowest," says DealPilot CEO Elisabeth Schick.

Merchants may still have a bit of breathing room. Though Europe's Internet use has skyrocketed this year, it is still low by American standards. And it is very uneven: while Scandinavians, Britons and Germans surf the Net with glee, only about 5 percent of households in Spain and Italy are hooked up. Germans, especially, are paranoid about giving away personal information--particularly their credit-card numbers--on the Web, meaning only 21 percent of Net users there have even dared to make an online purchase.

Laws that differ from country to country also make Web selling cumbersome. France's book cartel, for example, can be difficult to maneuver around, as can Germany's prohibition of discounts, storewide sales and lifetime guarantees. And with its panoply of languages, tastes and traditions, Europe will never be as uniform a consumer market as the United States. "It makes no sense for us to sell Dutch groceries in Germany," says Marianne Rozemeyer, spokeswoman for Albert Heyn, a Dutch supermarket chain that was one of Europe's first to sell online.

Still, that Europe-wide shopping mall will arrive faster than anyone predicted. Lured by new, free Internet-access services such as Britain's Freenet, Europeans are logging on at a faster rate than ever before. Right now, Nokia and other manufacturers' new GSM cell phones with built-in Web browsers are hitting the stores. "On the Net it doesn't matter whether a product comes from England, France or Germany," DealPilot's Schick says. Correct; the best deal is only a few clicks away.

 

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