Cross-Border Trade: Is It Worth The Effort?

February 4, 2015

It’s a big world out there. But with more and more shoppers purchasing from international retailers, the globe is starting to seem pocket-size – at least in the e-commerce space. In the past, selling across borders was reserved for larger companies with offshore hubs, access to overseas warehousing, comprehensive back-office support and an employee pool that dwarfs the population of Vatican City. But as these obstacles disappear and consumer habits shift, retailers of all sizes are discovering that going global is not only achievable, but fast becoming the norm.

The State of E-Commerce and Cross-Border Trade

According to a recent Bigcommerce study, global e-commerce sales are predicted to reach $2 trillion this year, a huge jump from 2014’s total of $1.5 trillion. While these numbers represent a wealth of opportunity for online retailers, they also mean more competition. For those only selling locally, getting products in front of consumers has become harder. In counterbalance, many local retailers are now looking to cross-border trade to widen their customer base and grow their businesses.

ChannelAdvisor’s recent multichannel e-commerce study revealed that 30% of the US retailers surveyed are currently selling on international sites. Though that stat is encouraging, there’s still plenty of room for growth. International expansion presents many opportunities, including access to a vast amount of new consumers, the chance to overcome seasonality and excess inventory, as well as the possibility of unearthing a niche in an undeserved market. If you’re not convinced, consider this: In 2013, cross-border e-commerce between Australia, Brazil, China, Germany, the UK and the US totaled $105 billion. By 2018, the figure will jump to $307 billion – a near 200% increase.

Despite this evolution, online retailers still face a series of challenges when expanding overseas, from language and localisation barriers, to different taxation policies and fulfillment processes. Rather than putting new regions in the ‘too-hard’ basket, retailers need only invest the time to research and build a strategic plan before making the leap.

Over the coming weeks, we’ll be offering information and tips to help US retailers navigate new-market entry. In this post, we’ll take you through a few overarching trends in global consumer shopping habits so you know what to expect. Here’s what you need to know about today’s online shoppers:

  1. They’re multichannel: Listing on multiple channels not only increases visibility and the ability to reach new consumers, but it can also help target the same consumer during all stages of their path to purchase — and secure repeat business. According to a recent study by PwC, 86% of global customers shop across at least two channels, with 25% using four to five.
  2. They’re multidevice: Daily technology use is no longer limited to one screen. Online shopping is among the top activities performed when people switch between devices. And if you’re not optimized for mobile, you risk losing big: 76% of consumers will abandon a website if it’s not optimized for mobile browsing.
  3. They’re savvy: Today’s consumers are willing to do the legwork to ensure they’re getting the best value. Along those same lines, they’re relying more on independent customer reviews.More than 80% of global shoppers research online before buying electronics, computers, music and movies — and approximately 60% do so when buying clothing, footwear, toys and health and beauty products.
  4. They’re exacting: Two out of three global shoppers won’t hesitate to cancel an order if it doesn’t offer free shipping.
  5. They’re informed: Many retailers pull their hair out trying to determine what their shoppers want. But much of this struggle could be avoided by simply asking them. According to IBM, 90% of customers are willing to spend 20 minutes inputting their information to help retailers give them a better shopping experience.

Be sure to look out for next week’s post, where we’ll delve into the factors you’ll need to consider before stepping onto the global stage, including identifying and selecting new markets; shipping and exporting; and returns.


Blog post by Mark Gray, managing director, APAC, ChannelAdvisor

*This article was originally published on Power Retail.

agile part 1 thumbLooking for more information on how to sell across borders? Download this step-by-step guide to cross-border trade that is manageable and achievable.