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Dublin: 11 °C Thursday 20 June, 2013

National strategy needed to keep online spending in Ireland

According to the Digital Hub’s annual report for 2011, 75 percent of money spent online goes overseas.

Image: Adam Peck/PA Archive/Press Association Images

THE DIGITAL HUB has said we need a national digital strategy to ensure some of the €20 million people spend online each year stays in Ireland.

Commenting on the publication of its annual report for 2011, Chairman of the Digital Hub Development Agency (DHDA) Leonard Donnelly said a key challenge for the coming years would be to persuade Irish consumers to favour domestic companies for their online purchases.

“Ireland currently spends close to €4 billion online each year, but 75 per cent of that goes overseas, mostly to the UK,” he said.

“The Digital Hub has projected that, by 2017, the online consumptive economy will be valued at €21 billion in Ireland. If the trend for favouring overseas outlets for online purchases continues, however, the revenue loss to the domestic productive sectors will be immense.”

According to Donnelly, Ireland’s biggest competitors in digital innovation are India and the UK.

“Ireland must mirror – and surpass – what’s happening in India and the UK to establish its position as a digital powerhouse,” he said. “We have been groping around in the dark for the past decade about fashioning ourselves as an ‘innovation island’.”

Donnelly said the DHDA has been working closely with the Department of Communications, Energy and Natural Resources to develop a strategy to ensure Irish companies can strengthen their position in the online marketplace.

However Sinn Féin TD Peadar Tóibín said potential for economic growth in this sector was “being squandered by government inaction”.

“During this government’s watch the ranking of this state is now at its lowest ever position in the global table for download and upload speeds,” he said. “Yet the costs of broadband for business and consumers are well above average.”

He said the government needs to act now and start investing in infrastructure before we fall further down the broadband league tables.

Eighteen new companies joined The Digital Hub in 2011 bringing the total number of companies to 70, employing over 800 people.

Read: Europe’s largest software company creating 250 new jobs in Ireland>
Read: New Sky phone and broadband services to create 900 Irish jobs>

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Comments (25 Comments)

  • No need for a National Strategy and jobs for the boys. I will give you the solution for free – don’t charge so much

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  • Reduce prices in Ireland and maybe we will spent more money here. a good few years back I bougth the Canon EOS 350D, it was just out at the time and I bought it from a UK supplier online and saved well over €1200 euro when compare to online Irish shops and actual camera shops.

    Reply
  • Erm … what the …

    People buy stuff online from abroad because they can’t get it here or because it’s cheaper abroad.

    Bring down prices generally, allow for bigger supermarkets, let us have Asda.

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  • People now go where the buck in their pocket goes furthest. Rip off Ireland is just too expensive…!!!

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  • People are sick of being ripped off so much. I never realised how bad it was until i started to shop online. Id be lost without Amazon.co.uk now. Although they have a data centre in Dublin so its technically still supporting Irish jobs.

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  • They cannot force people to spend in Ireland only – it is a form of protectionism. The EU is an open market with free trade across 27 member states. Try being more competitive.

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  • Some goods can be purchased from the UK in euro and have them delivered free to your door at 1/2 to 3/4 of the price charged here. The Book Depository is but one example. Prices dictate where we buy our goods. Stop investing in waffle and trying to con us – just reduce online prices and exclude the hidden charges.

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  • Mjhint 03/08/12 #

    I priced a key board & battery for my daughters laptop here. Total price ?160. From the the UK delivered to my door ?51. Maybe its a different quality I dont know but including the post thats the price. Solve this problem for me & I will buy in Ireland.

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  • cheaper prices in Ireland might help, no need for some overpaid fat cat to figure it out, the people of thejournal.ie have just done that for you……

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  • the reason product here are so dear is because of the high rent and rates costs to companies who have to price their products high in order to cover the costs of running their companies, bring down their costs and that will bring down the cost of products and make us more competitive

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    • @ Philip If this is the case then why are products like Sky TV so much more expensive in Ireland then the UK? Anyone with Sky watches their adds, aimed at the UK market, in which they advertise satellite tv packages, considerably cheaper than the ones sold here, they then bundle these with phone and broadband in the one deal at speeds and prices we can only dream about.
      I have no doubt that rent and rates etc. are enormously high in this country, you’re preaching to the choir there pal, but with regards to online retailers the whole point is NOT to have a high street presence. I’m sick and tired hearing the same old excuses being used when more often than not the simple truth is that our companies expect higher profits.

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    • Nope. It’s because they know many Irish people don’t do price comparisons and will pay. Have never understood this.

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    • @Brian, regards SkyTv – maybe the UK has cheaper prices for exactly the reason you mentioned: advertising.

      Sky’s tv channels sell advertising. They probably earn a lot more in the UK from this than here because of the sheer number of viewers in the UK. This could then subsidise the cost of their tv subscriptions, in turn increasing the eyes on the adverts, in turn increasing the number of advertisers paying, in turn reducing the cost of subscriptions even more!

      Economies of scale.

      In Ireland, we don’t have the market to reach the price points of the USA or UK. It’s a serious problem, that as this article is talking about, is starting to see a huge amount of cash leak out of the country. A solution is needed fast.

      Reply
  • There is something really really wrong when I can go online and purchase two 12 litre (Steel) Scuba Cylinders from a Scuba store in Newcastle England and have the posted to Ireland cheaper than I can buy them in Ireland

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  • As many have already said, price is the main concern. But also the fact the majority of what people are buying online are goods that are not produced in Ireland, and Ireland is too small a market for many Irish-based online retailers to compete. Same reason why very few bookshops are Irish owned. The chains buy in bulk from the publishers, mostly based in Britain and the US, and so can negotiate a better price, which they can then pass on to the customer. Amazon.ie is just Amazon.co.uk with Euro pries for this very reason. The government could force the prices up via import taxes, but it would be difficult to implement and such artificial price controls tend to be counter-productive; think of tobacco, alcohol and cars. They could do the opposite, and offer tax reductions for Irish-based online retailers, but reducing tax revenue is a difficult sell these days.

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    • Although the goods from amazon are bought in the uk does the vat not go to the revenue here as they charge 23% on sales not 20%.

      Goods on uk are cheaper in many, not all, cases. Then on top of that there is free post from amazon to Ireland. That is the issue. I bought flooring from uk delivered free and saved nearly 1000 euro a few years back. How can it not be cheaper here, the carriage alone must of been fair bit for the company to swallow. It was quickstep so identical goods.

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    • It does seem crazy, but I’d guess they can charge less because they pay less to the producer/supplier by buying larger quantities.

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    • Bunny have you posted anything recently. The prices charged by An Post are astronomical so for most Irish stores selling online offering free postage will wipe out any profits. Large companies like amazon are able to shop around and give a delivery contract – last time I bought from them they used Deutsche Post, though that may have changed – so can afford to offer free postage over ?25. Most Irish companies online also have high street presence so rents will be higher as will rates, electricity etc, even if they only maintain a warehouse for storage it is still more expensive, and then there is the epidemic of shoplifting in this country, working in retail swiftly drains your trust in people.

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  • I’ve had great success on-line shopping in Ireland with bulky items from small specialist shops (Don’t want to seem like I’m plugging. Ask if you want details.).

    I think the mix of low p&p for bulky items, with a lack of big players for specialist items helps.

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  • If the price comes close (very close) and its a choice between an Irish and overseas seller il choose Irish everytime. much easier to deal with Irish people just for the local support etc.
    I buy a lot online but as it stands I’d say I buy 90% from abroad..

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  • Economies of scale. We’re a small population on a small island. So we pay more, for less.

    If you have the solution to the problem, please inform Enterprise Ireland, as I’m sure they’d be delighted to hear from you.

    Reply
  • A weaker euro will keep business here… You cant blame this ‘rip off Ireland’ facade for the fact that our currency is stronger than the Brits

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    • I don’t buy much online, but when I do, I buy in euro’s and generally from other european countries. Just bought a PC. Saved ~200 quid by buying it from a german site. It’s nothing to do with the euro vs the pound.

      Reply

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