Assessment of Current Buyer Behavior in Market

More than three-quarters of Maltese individuals now use the Internet. E-commerce, whether business to consumer (B2C) or business to business (B2B), has evolved rapidly since 2006 when the government published the Electronic Commerce Act regulations, which require information service providers to furnish basic identifying information to customers.  The regulations also established obligations ensuring appropriate levels of transparency with respect to online commercial communications.  As a result, E-commerce in Malta experienced an exceptional boost over the past years, with consumers, businesses, and the government realizing the potential opportunities and advantages of E-commerce.  COVID-19 has forced many businesses to shift to a stronger online presence which led to a permanent increase in the level of e-commerce sales.

The government’s E-commerce Digital Strategy, which covered a seven-year period from 2014-2020, ensured that businesses have the necessary means and skills to capitalize on opportunities brought about by E-commerce.  The strategy had set out four different pillars to achieve its objectives: engendering trust in E-commerce, transforming micro-enterprises, taking SMEs and industry to the next level, and making Malta a global E-commerce player. The next digital strategy for Malta is currently in the pipeline and is expected to be published by the end of the 2021.

Relevant Maltese legislation aims to be technology-neutral, compliant with EU legislation, harmonized with other Member States’ regimes, attract business and investment, and foster competition in the market.  Moreover, Malta’s government leads the e-government initiative, increasingly making more government service accessible to Maltese citizens via electronic channels, including by means of an electronic ID available to every adult citizen.  The government continues to promote E-commerce, digital services, and investment in ICT, fintech, artificial intelligence and blockchain technology.

As the pandemic led to restrictions being imposed, consumers, irrespective whether these are avid eCommerce users or prefer buying in-store, modified their shopping habits. The latest study carried out by the Malta Communications Authority showed that 27 percent of digital users reported to have increased their online shopping during COVID-19 and a mere 1 percent claimed to have purchased online for the first time. Another 57 percent reported no changes in their digital shopping.

Local eCommerce Sales Rules & Regulations

The Malta E-commerce Digital Strategy is a product of the country’s desire to harness the digital industry to increase national prosperity.  Malta’s legal framework and economic policy support Information and Communication Technology (ICT) operations, and the country has invested heavily in state-of-the–art telecommunications infrastructure.  There are a number of Internet Service Providers in Malta with a clear interest in off-shore E-commerce development.

In 2015, the European Union launched an ambitious overhaul (the so-called Digital Single Market (DSM) Strategy) of policy and legislation relevant to the digital economy.  The overhaul aimed to reduce barriers and unlock online opportunities in Europe, from e-commerce to e-government.  E-commerce was a priority area, to ensure better access for consumers and businesses to online goods and services across Europe and to remove key differences between the online and offline worlds.

New pieces of legislation have been adopted to facilitate cross-border portability of online content services, increase transparency of cross-border parcel delivery, and update and harmonize contract rules for online sales of goods and supply of digital content and services.  For more information: Digital Single Market

The Electronic Commerce Directive (2000/31/EC) provides rules for online services in the EU.  It requires providers to abide by rules in the country where they are established (country of origin).  Online providers must respect consumer protection rules such as indicating contact details on their website, and clearly identifying advertising and protecting against spam.  The Directive also grants exemptions to liability for intermediaries that transmit illegal content by third parties and for unknowingly hosting content.

Key Link:  eCommerce

Local eCommerce Business Service Provider Ecosystem

While Maltese customers still prefer shopping at brick-and-mortar locations, microenterprises, SMEs, and large businesses are realizing the potential benefits of digital technologies in expanding their base of customers and as an advertising platform.  Businesses often use the Internet to engage with their customers, though they do not necessarily conclude the transactions online.  The Malta Communication Authority has carried out studies that show a potential correlation in Malta between the size of a business and the use of digital tools, with SMEs and large enterprises embracing technology more aggressively than microenterprises.  

The Malta Communications Authority study also shows that consumers use the Internet as the first resource to gather pre-purchase information, regardless of whether the consumer completes the purchase in-store or online.  Of EU Member States, Malta performs second best for sales via electronic data interchange.  However, only slightly less than a third of digital buyers purchase from domestic websites.  The latter purchases related to event tickets, flights, and accommodation.  In contrast, consumers of many EU countries make bulk online purchases within one’s own country.  Nonetheless, Internet and E-commerce uptake in Malta compares well with EU averages.