Can you believe it’s just ten years since the first iPhone was launched? I was taken aback when I read about that in the press recently. It’s incredible how much the smart devices have changed the way we live today. They’ve also played a big role in another dramatic change in the last ten years: how we shop. We used to do everything in person, in shops on our local high streets, in our own countries.
WHAT’S BEHIND THE CROSS-BORDER BOOM?
Now we can buy just about anything from anywhere in the world with the press of a button. Cross-border e-commerce is booming, and if all the forecasts are correct, there’s no end in sight.
According to a report I read from Forrester, cross-border B2C e-commerce will more than double over the next five years reaching $424 billion by 2021. Cross-border sales will make up 15% of all online purchases in 2021. Which country is driving this growth? China, of course. Its share of the online cross-border market will grow to 40% in 2021.
What are the Chinese buying? A report from McKinsey says wealthier customers buy foreign gadgets and clothing from overseas. They also buy a lot of baby formula from overseas. Why? Because cross-border shopping not only offers customers better prices, it can also provide a degree of protection from fake or counterfeit goods.
The US is the world leader in terms of cross-border e-commerce imports and exports. It is the original and most trusted cross-border market. Worldwide, it’s considered the best for quality products. In a recent cross border survey conducted by DHL, we found that 75% of respondents who made a foreign purchase selected the US as their top destination for online shopping.
Pitney Bowes recent Global Online Shopping Survey showed that 66% of shoppers who’ve shopped online locally have also made an online purchase from another country in the past year. Singapore, Australia, and Hong Kong have the highest number of cross-border shoppers, while cross-border confidence in countries like Japan is still growing.
The numbers look great and the predictions are fantastic – but that doesn’t mean cross-border e-commerce is easy, especially for retailers. Knowing exactly what kind of taxes and fees will be incurred through cross-border sales is hugely important. Making them clear to customers even more so. A 2016 survey by Paypal showed that some 30% of consumers from countries most frequently buying from the US, had abandoned a potential cross-border purchase because it wasn’t clear how much duty, tax or customs fees they would have to pay.
To smooth the path for this cross-border e-commerce boom, and ensure that no customers are lost along the way, a number of processes have to work in tandem: from the actual website ordering process and payment methods, to customs regulations and taxes, down to reverse logistics (returns), fulfillment and delivery. For the customer the 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 key and retailers know it. According to a survey of Chinese Cross-Border Sellers by The Payoneer, 71% said fulfillment is the most important aspect of their business. It’s here the logistics industry can play a vital role. Not only do we harbor a growing arsenal of cross-border e-commerce expertise that we can use to help our customers take their very first steps in the business, we’re also the absolute experts when it comes to fulfillment and delivery.
by: Charles Brewer via ecommerce-nation.com
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