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Opening an online store – true torture

25 February 2012 / 20:02:14  GRReporter
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Ten months, a bunch of documents, countless certificates, endless hours of meetings with officials, even study ... faecal mass. This is what it took for a group of friends to create their own Internet company. At a time when electronic commerce is gaining greater market share abroad and is spreading rapidly in Greece, the establishment of an e-shop is left at the mercy of certain officials, and stumbles constantly against endless bureaucracy, so typical of the country.

"Internet shops face a procedural problem that must be solved, and it relates to payments", says Fotis Andonopoulos, one of the founders of the site www.oliveshop.com. This is an online store aimed at customers abroad who are interested in olive oil and its products such as cosmetics.

Their Odyssey

"Most stores start their business after only having received a preliminary approval of the name, because bureaucracy is so slow that you cannot afford to keep on paying your fixed costs such as rents, etc., without having started to operate", says Andonopoulos. He went to the tax office, where he received three different documents, went to the Chamber of Commerce, the municipality, healthcare service, the fire department, and he also visited a bank. Due to the nature of the shop the group of friends had to go to the healthcare service, where they had already spent quite some time. Besides the classic X-rays, Andonopoulos was informed that all shareholders of the company, even those who are not active members, but had only helped to raise its equity must conduct research on... faecal mass.

When they had to identify also their storerooms, the situation became even more intricate. The warehouse should be located outside the city and eventually they found suitable premises, which had however an illegal staircase. The owners of the company sought to legalize the staircase, which first had to be moved. Difficulties began when engineers, tax officials and officials from the chamber of commerce could not reach any agreement on how to regularize the staircase, and finally got to the point where they told the owners "you are on your own". When they finished with the state institutions, difficulties started with the banks, because they had to find a mechanism to verify the data of those customers using credit cards. Banks asked, among other things, that the site be translated into Greek, and that not all products be available in two languages. "No matter how many times we explained to them that we are focused on markets abroad, and not on the Greek market, and therefore everything must be written in English, they did not pay any attention to us", continues Andonopoulos.

Eventually the company owners decided to turn to the banking systems abroad (for example pay pall), and as a result "only the banks were the ones to lose, not us, because we solved the problem in just one day". Negotiations with banks continued for over 3 months ...

Practice in the U.S.

The difference with the other countries is huge, claims Andonopoulos and tells us about his experience with the U.S. Food and Drug Administration FDA (the equivalent of the Greek control service IFET) from where he had to obtain the approval to export products to the USA. "I contacted the Agency and they immediately sent us an e-mail with instructions. We filled in the on-line form and after five minutes we had completed the procedure. We received the approval in less than 24 hours after our application". Our e-shop has been working for 5 months already, and we have received purchases from countries such as Denmark, Germany, Norway, USA, and even Mongolia. Currently the company is doing well in covering the costs. Its owners are working to remove various minor problems that appear and explain that "we aren’t in a hurry to become traders of olive oil", because for all the shareholders the online store in question began as a hobby. Currently they are working on two new versions of the site in Germany and Italy.

Upward trend of online marketing

In 2011, in Greece the purchase of goods and services via the Internet reached 1.7 billion euro, an online trade registered an upward trend. According to a study by the Laboratory of e-commerce (ELTRUN) of the Economic University of Athens, the market recorded a growth of 30% as compared with 2010. It has been estimated that on average 1.5 million consumers are making a purchase at the touch of a button 14-15 times a year. Greek regular online users spend 1,150 euro per year, out of which two thirds are spent in the Greek sites.

The study of the Economics University describes the Greek on-line users as "serious", because 70% of them use the Internet for over 10 hours per week on average. An interesting fact is that 50% of buyers are from the countryside, and one third of them are over 35 years old. Internet users tend to buy electronics, tickets, hotel reservations and books. Nevertheless, in 2011 the highest growth was registered in take-away food, cosmetics, jewelry, watches, and goods in supermarkets. A significant increase was seen in shopping from sites with daily bids, which accounted for 20% of total purchases via the Internet in the first half of 2011.

Tags: Internet online store online marketing bureaucracy odyssey consumers
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