The Cross-Border Commerce Boom – What will Matter in 2018!
Now we can buy anything from nearly anywhere in the world just by clicking a button on our smartphones. Yes, cross-border commerce is actually booming, and one can expect the juggernaut to continue in 2018 and beyond until the foreseeable future.
Smartphones have made shopping easier. One can expect more shoppers coming out of their self-imposed abstinence from online shopping owing to minimal security concerns nowadays. A Forrester study revealed that cross-border commerce is expected to double by 2021 with staggering revenue of $424 billion expected by that time. Cross-border sales shall include 15% of online purchases too. China’s cross-border market is expected to grow to a whopping 40% in 2021 and the country can easily fuel growth in the domain.
The McKinsey report revealed that most wealthy people in China, buy foreign clothes and gadgets that are mostly not available in China. Baby formula is quite popular here.
Why? Because cross-border shopping helps them in deriving better prices, and good protection from counterfeit goods too. Now that is a major point!
The Leader in Cross-border Commerce and the Future Prospects
The US is touted as the world leader of cross-border commerce trade – including imports and exports. The country has a trusted cross-border market worldwide and known for its product quality too. A DHL survey revealed that 75% of respondents who make foreign purchases selected the US as their ideal destination for online shopping. Now that says a lot about the US as a major cross-border commerce.
How does it augur for other countries though? Pitney Bowes recently disclosed its Global Online Shopping Survey that reported 66% of shoppers who shopped the web locally have made purchases from other countries in their recent past. Singapore, Australia, and Hong Kong are top countries with most number of cross-border shoppers. On the other hand, Japan has grown its cross-border confidence tremendously in the recent years.
Smoothening the path of commerce locally!
Although the predictions are fantastic and rightly so, cross-border e-commerce is far from easy, for retailers owing to huge competition and diverse trade laws in every country. A 2016 survey by Paypal revealed 30% of consumers from different countries buying from the US, abandoned their cross-border purchase midway since they were unaware of the taxes or customs fees involved in the purchase. Here is what every cross-border commerce provider should know:
- The exact kind of taxes and fees incurred through cross-border sales
- Right communication to local customers in the country about the products.
- No customers should get lost along the way, so multiple processes should work in harmony – the ordering process on site and payment methods along with calculation of taxes and alignment of government regulations
- Communication of returns should be in clear words including the fulfillment clauses and delivery mode.
- The return process should look seamless. For the seller, problems arise from the fact that each of the parties involved has a different level of understanding, motivation, and sense of urgency when it comes to getting the goods from one country to another.
Getting fulfillment right is the key to successful cross-border commerce and retailers know it. According to the Chinese Cross-Border Sellers survey by The Payoneer, 71% said fulfillment is highly important and logistics play a major role in this respect.
If 2018 is the year you plan to initiate cross-border commerce, ensure that the products are available locally with a good distribution in place in an international market. Also, ensure that your logistics partner is clear about the bigger picture. While consumers are driving the demand for cross-border e-commerce, get the right add-ons for your e-stores and the right domain experts to everything runs smoothly at the local level.
