"Unified Benelux market could generate billions for retailers"

Belgian and Dutch retailers miss out major opportunities if they are not active in each other’s country: a unified Benelux market would generate an additional 23 billion euro in turnover and create up to 95,000 new jobs in the retail sector.

36,000 new companies

Back in 2013, Benelux retail’s turnover reached 219 billion euro and employed nearly one million people, spread across nearly 200,000 companies. The following year, about 20 billion euro in turnover came from eCommerce, but the researchers feel the Benelux market’s potential is relatively untapped as plenty of possibilities are wasted because of the obstacles between the three countries.

Once it becomes easier to do business across the three countries’ borders, a rapid international growth should follow, both within the Benelux and beyond. A unified Benelux market could be a stepping stone to Europe for entrepreneurs. If implemented today, estimates say it could save up to 2.45 billion euro in costs next year, money that can be used to lower prices or to invest further. The report by the Vlerick Business School, prompted by the prime ministers of Belgium, the Netherlands and Luxembourg, also estimates that a retail-focused unified Benelux market could 36,000 new businesses by 2025.

Example for Europe

A unified market would also benefit eCommerce: 65 % of the European customers shops online, but only 7.5 % shops abroad. Meanwhile, many online companies wish to sell abroad, but only if the playing field is level all across Europe. If the Benelux could create a unified online market, the three countries could become an example for a complete European integration: the unified Benelux market could also be a sort of laboratory for other European member states.

For consumers, a unified market could also prove beneficial: increased competition will drive prices down and force companies to compete on service, even more so than today. A unified Benelux market will also be able to withstand the larger European forces (Germany, France, the United Kingdom) and global competition. The market will also be more attuned to new and often disruptive retail trends.

Deal with legislation

Retailers do not need convincing when it comes to the Benelux: many local retailers feel the other two nations are already their secondary markets if they do happen to look for expansion, but a unified market could help them achieve that ambition more easily. “We welcome the idea of a unified retail market for the Benelux”, Dominique Michel, CEO of Belgian retail branch organisation Comeos, said. “Retailers can take full advantage of such a market and can use it as a stepping stone to the rest of Europe.”

Despite the countries’ strong ties, there are still several obstacles for entrepreneurs to sell abroad: such an expansion requires a considerable investment, which increases the risk. Comeos also feels this internationalisation would be made easier by a new type of company, the “Benelux enterprise”, to enlarge its administrative scale.

There are also many differences in legislation, which do not make it easy to simply open a store in another country or to launch a web shop. One of the primary concerns towards a unified market is to synchronize the legislative framework: “In order to create a unified market, we propose talking about all trade-related legislation with our neighbouring countries first. We have to make sure whether the proposals are in line with their legislation, the ultimate test for each new piece of legislation”, Michel added.

Focus group

The report also states there needs to be a knowledge distribution between the three countries, like network creation and a virtual knowledge center across the nations’ borders. Simplified legislation can help lower the need for specific expertise and knowledge. “The unified market provides opportunities to tackle the major issues, like Big Data and the disruptive economy, with the combined strength of three countries”, Michel said.

To deal with all these changes, the researchers are asking for a “retail” focus group in the Benelux so that companies and governments can tackle the different obstacles together.

“This study is a first because it sets trustworthy guidelines to the benefit of both companies and consumers alike. However, this is merely the start: its recommendations still need to be processed together with the other nations. This will then lead to a foundation for a unified retail market in the Benelux”, Deputy Secretary General of the General Secretariat of the Benelux Union, Alain de Muyser, said.