Building consumer trust in cross-border e-commerce is essential to unlocking the full potential of the digital economy, especially in developing markets.
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Against the backdrop of rapid digital transformation and globalization, the need for effective consumer protection and dispute resolution mechanisms is increasingly critical, experts said at a recent webinar hosted by UN Trade and Development (UNCTAD).
New data from 43 countries, representing about 75% of global GDP, show business e-commerce sales grew nearly 60% from 2016 to 2022, reaching $27 trillion – according to UNCTAD’s latest Digital Economy Report.
The rapid digitalization of global trade brings tremendous opportunities but also challenges, particularly in protecting consumers in cross-border e-commerce.
Looking at UNCTAD's World Consumer Protection Map, only 38% of countries have established systems for resolving cross-border disputes.
While several consumer protection agencies facilitate cross-border dispute resolution on a case-by-case basis, just 34% of economies have cooperation agreements, making it more challenging to pursue concerted efforts transnationally.
This gap limits the growth potential of developing economies, which account for about 40% of global GDP but only 25% of e-commerce sales.
Urgent need for inclusive consumer dispute resolution mechanisms
As the digital economy continues to expand and global crises reshape market dynamics, the need for robust, transparent and accessible dispute resolution systems becomes all the more crucial.
These systems not only protect consumer rights but also build trust in digital and global marketplaces, fostering a fair and equitable economic landscape.
But currently, the process to seek redress can be lengthy and challenging to navigate, when consumers face fraudulent activities in cross-border e-commerce.
Promoting international cooperation and best practices
As the United Nations lead agency for consumer protection issues, UNCTAD advocates for accessible, transparent and effective dispute resolution mechanisms.
It also promotes the UN Guidelines for Consumer Protection (UNGCP), underscoring that dispute resolution and redress mechanisms should be delivered to consumers in a fair, affordable, and speedy way while protecting related consumer rights throughout the process.
Additionally, at the 8th UNCTAD Intergovernmental Group of Experts on Consumer Protection Law and Policy, member states adopted a declaration emphasizing the need for cross-border dispute resolution systems, promoting alignment with the UNGCP and encouraging businesses to implement robust dispute resolution systems.
Ways to build a trustworthy digital economy
UN Trade and Development's research highlights factors including sustainable funding, enhanced consumer education and business participation as key to effectively addressing disputes.
In response to growing demand, Indonesia, Paraguay, Thailand, and members of the Pacific Alliance – a Latin American trade bloc formed by Chile, Colombia, Mexico and Peru – have requested UN Trade and Development to assist in designing and implementing effective consumer online dispute resolution systems.
The move reflects global calls for robust dispute resolution systems to bolster cross-border e-commerce and protect consumers in a rapidly digitalizing marketplace, which UN trade and development is committed to continue supporting.