Many small and medium-sized enterprises in the U.K, U.S, and Australia fear expanding into the global marketplace through the conventional ways since cross-border e-commerce doesn’t offer SKU counts or larger catalog demands. However, recently newer technologies in e-commerce around the globe are expanding and emerging, slowly integrating into the undiscovered Asian markets and other developing countries. This has ensued in continuous streams of revenue from the e-commerce industry.
While businesses continue to expand, cross-border e-commerce strategies often set organizations apart from each other when it comes to profit-making – it comes with its own set of challenges.
We witness these challenges as a by-product of operations, shipping, logistics, changing customer experiences, and demographic changes. It’s evident that one e-commerce strategy that works in one corner of the world might not show the same results in a different country, and it would be wrong to assume it would.
Time after time, new and improved brands are climbing up the ladder and reaching the successful side of cross-border e-commerce – increased sales and international clients.
This increase is credited to the increasing number of people accessing the web. WeAreSocial, in 2019 conducted research that deduced that global internet penetration surpassed 50 percent in 2016 along with the criteria of the annual change rate – which was initially assumed to rise over the next 12 months.
The statistics are inevitable:
An estimated 2 billion e-shoppers or 60% of the global population, transacted 13.5% of their total retail consumption. The value equaled US$3.4 trillion as per Accenture.
Cross-border e-commerce in China is worth $60 billion, but legal implications may have an effect. Potential government interference is common in China since brands employ e-commerce to meddle with the policies of their products with local authorities. Cross-border e-commerce enables Chinese consumers to purchase international manufactured goods online and efficiently evade the regulations that have obstructed access to consumer products from Cognac to cosmetics and medicines. However, pressured with loss of revenue, and rising concerns from the conventional trader, the country is now seeking to reconsider the regulations.
Australians enjoy purchasing clothing from online retailers outside their country. The Chinese government, since March 2016, has issued a slew of regulations designed to expand regular tariffs on imports and compliance standards to foreign goods into China through cross-border e-commerce streams. The current leadership sparked outrage between many cross-border e-commerce merchants in China and across its borders. They put it on hold for an indefinite period, merely days before Premier Li’s March 2017 visit to New Zealand And Australia. Merchants hope that products sold into China through cross-border e-commerce will stand to profit from low taxes and legal exemptions.
According to reports, the Southeast Asian e-commerce market is expected to reach $200 billion by 2025, with online purchases growing at 32 percent CAGR. It is the world’s largest Internet user market, with 600 million shoppers and 260 million people on social media. Then, it makes sense that Alibaba and Amazon have accelerated their attention in the area.
Due to the astounding rate at which the e-commerce market is growing, Mexico is potentially a long-term market with significant growth. Payment security concerns are impeding growth. Amazon has teamed up with a local supplier to allow customers to pay in cash for their purchases. The overall market has little competition, and at this growth rate, Mexico could become the key market in Latin American e-commerce in the long run.
Cross-border purchases are the fastest-growing e-commerce sector in France. Approximately half among all French consumers usually purchase from cross-border vendors, and 19 percent of all internet revenue in 2016 was made through international websites, four percent higher than the European average of 15 percent, with the U.K, Germany, the U.S, Belgium, and China being the most popular destinations. The main issue with French consumers is that their payments are small compared to the listed countries.
As discussed above, cross-border payments are tricky. They should have a management system that does not take the customers by surprise when the delivery reaches their doorstep. Comprehending the local regulations and tariffs is important to ensure that consumers pay accordingly. Otherwise, the delivery will return with added yet hidden costs and cause the business its reputation and revenue.
In essence, cross-border trade is here to last. It needs to be focused upon by merchants, customers, and essentially governments. It requires investment, research, personnel, equipment, logistics, and payment procedures.
The Global Express Association represents four well-known express delivery companies, i.e., TNT, DHL Express, UPS, and FedEx Express, committed to working with Border checks and earnings officials as trustworthy collaborators to address e-commerce obstacles. They assist governments in the following ways:
These, however, are concrete restrictions to what delivery companies can do. For starters, they are not initiators of the shipment information. There is certainly a restriction to the amount of information they can obtain from the customers. These companies are not law firms, as they too are subjected to national data protection and security rules. Customs is the relevant authority to implement laws, undertake risk evaluations, collect fines and taxes, and seize illegal goods.
The delivery service companies ensure that policymakers and liable distributors should collaborate to reduce barriers in business-to-consumer (B2C) e-commerce. Just competition among governmental and non – governmental delivery companies will lead to significant savings, improve service quality, and promote e-commerce growth.
Enabling customers to make their own shopping decisions enhances lifestyles and lowers expenses, and increases efficiency across the economy. In that ethos, the express delivery industry should make the following suggestions on how to handle e-commerce for it to live up to its potential:
Cross-border e-commerce is undoubtedly an engine for growth in the coming years. With increased technology and advancements, many companies are now moving toward global e-commerce solutions that ease their logistics, operations, and interaction with customers effectively.
Countries accepting e-commerce as the next big thing invest, research, and implement to procure the multiple benefits of added revenue and imports to boost their economies. However, there is still a wider population hesitant toward accepting e-commerce as the perfect solution for cross-border transactions.
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