Global Trends Pushing Cross-border Ecommerce Sales

January 29 2020

The global ecommerce market is growing every year

The global ecommerce market is growing every year, with retail online sales expected to reach $3,54 trillion in 2019 and grow by 19% to $4,21 trillion in 2020, according to eMarketer. By 2023 it is expected for to reach almost double the growth, up to the mind blowing $6,54 trillion. This means that there are plenty of opportunities on the market (in many different categories), so if you want to be benefit from them, you have to be well prepared for the fierce competition. Both on a local and global scale.   

As an ecommerce business owner, maybe you’re considering starting cross-border activities – either all around the world or just in one neighboring country or region. It’s definitely sure exciting, but it’s also quite a challenging endeavor. There are many things you HAVE TO consider and carefully plan out, in order to avoid unpleasant surprises or even fines from controlling institutions.  

How to do it?  

This short guide will help you get a better understanding of the seven key challenges online shops face when they start their cross-border activities. If you manage to organize your business in a way that solves all of them, you will have a much firmer base for the launch of your business in another country. Of course, this guide isn’t too detailed, but it should be useful for you as a reference point. We hope you will find it useful. 

But before we dive deeper in the details, let’s see what factors had the most impact on the amazing growth of ecommerce businesses in the last years.

Here are the factors that have impact on the growth of ecommerce

One of the key components you need to understand to get the full picture is the overall drop in international logistics and courier prices. It’s now much cheaper to move stock from one country to another than it was before. Last mile delivery also costs just a portion of the price it was several years ago. The infrastructure of courier companies has also improved a lot and nowadays same day delivery and quick delivery up to 1-3 hours are a must for every serious player in the field.

Another factor that facilitated the cash flow between merchants in different countries is the global expansion of payment gateways and fintech companies. That made it much easier and cheaper to arrange payments between producers, importers, distributors and resellers. In the last few years companies like TransferWise, Revolut, Paysera etc. have seen a significant increase in their customer base, mainly because people were looking for better options to move money from one country to another and avoiding the expensive bank fees for international transfers.

Manage your activities by yourself or use outsourcing services?

The growth of ecommerce business also created continuously increasing demand for somebody that could help online shops focus on their core activities and not on time-consuming daily operations. Outsourced fulfillment services allowed business owners to free more time for improving the product or service and to avoid losing too much money because of seasonal drops in sales for some product categories (like sun protection cosmetics, camping equipment, heating appliances and many many more). Complex and time-consuming daily operations like storing, picking, packing and sending the items plus managing the returns for the ecommerce website now have a quick and easy solution. Both Amazon and Shopify are investing a lot of money into the development of these services, but there are also excellent smaller local or international fulfillment companies that you can use if you want to be independent of the giants but still need to outsource these activities.

SaaS and open-source platforms for ecommerce allowed people who have limited (or even lack) technical background to quickly build small online shops and to start selling their products in a matter of weeks. A huge portion of all ecommerce websites today are either one-man shows or very small companies. The good news is that some of them are already growing significantly. Of course, most of the ones who don’t take the business of ecommerce seriously are struggling.

Make processes automated and save time and resources

Automation of all aspects of the operations and marketing made it possible to scale the business a lot without having to hire too many people. That allowed entrepreneurs to cut down on operational costs or to reinvest more money back to their business. Machines, robots and algorithms can perform simple or complex tasks much quicker, with no mistakes and without needing rest, like people do. As a result, there is much more time available for the development of better products or for the improvement and optimization of operations.

All the factors mentioned above contributed a lot to the global development of the ecommerce business. The amount of stock that moves cross-border as a result of online sales is incredible. We can confidently say that there was never a better time to start selling abroad. By that we don’t mean that it will be easy (as you will see if you read the next articles), but only that current conditions allow anybody who wants to launch or develop further its online business to do it much faster compared to previous years.

Stay tuned for the next article in the series, where you’ll learn more about how to choose the business model that is best for your type of online store.