Borders are literally non-existent in today’s world where buying and selling between countries has been made so much easy through e-commerce. Technology has transformed and blurred the line that existed earlier in cross border transactions and continuous investment is being made by many e-commerce majors to ensure customer satisfaction and high reach of various products and services.
Global e-commerce sales is projected to reach US $6.5 trillion by 2023, which will be
approximately 22% of total global retail sales. A study on western Europe, found that cross-border
e-commerce accounted for 95 billion of the total e-commerce revenue in 2018 and
that cross-border trade made up 22.8% of the total online sales in Europe.
More than 2.1 billion shoppers are expected to purchase goods and
services online by 2021. E-commerce as a whole has already shifted away from
the West and will continue to do so despite the slowdown in the global economy.
While most companies who sell online have a good grasp on their local markets,
managing cross-border e-commerce sales presents a set of challenges that must
be overcome and managed.
The challenges of cross-border e-commerce sales can be classified into the following:
1) Logistics
Logistics is a primary challenge in cross-border e-commerce
because it is a significant cost (approximately 7% of online sales) and time
consumed in the purchasing process. Amazon has set a standard of quick delivery
within 48 hours and customers now expect the same from online e-commerce
platforms. Online sellers need to be careful in choosing their delivery
partners, considering the reputation, shipping network coverage and shipping
costs. It is not enough that the product shipped by the seller is good; a safe,
prompt and cost-effective delivery has a major impact on the overall customer
purchasing experience. The responsibility of the seller does not end with
handing over the product to the logistics partners. Customers view delivery as
a responsibility of the seller rather than that of the logistics company.
Hence, sellers need to select the right partner. It is even more imperative
because there may be occasions when customers may wish to return the goods,
which could be due to errors from the supplier or customer’s side, such as,
wrong product model, wrong color, wrong size and so on. Sellers need to ensure
they have good relations and coverage with the logistics partner to make
shipping returns convenient to the customer.
The most dominant payment mode for global e-commerce sale
transactions is credit card payment. Almost all e-commerce payments in Europe
are through major credit cards such as Visa, MasterCard, and American Express,
with the exception of Germany. In Japan, Konbini, a local payment method,
accounts for a sixth of e-commerce payments.
With the rise of online transactions, fraud risk is prevalent and
due to various security restrictions, such as address verification's by
the payment merchants, these measures dissuade customers from purchasing goods
from international online retailers. 13% of online consumers refrain from buying
if a foreign currency is displayed so sellers need to ensure that a local,
secure and convenient payment system is set up for customers to utilize.
3) Regulations
One aspect that e-commerce has minimal impact on is regulations of
foreign countries. Cross border e-commerce requires that international online
sellers follow the regulations and documentation procedures of the country of
destination. Some countries have quality and packaging requirements, high
custom tariffs, stringent custom procedures and consumer laws that sellers need
to adhere to. Despite the rapid technology development in e-commerce platforms
and logistics, import-export documentation is still yet to catch up,
particularly in developing countries as most documentation is done manually.
Duties and export procedures may add and make the products of international
sellers expensive. Certain countries may have legal systems which are weak to
enforce laws and or complicated systems causing judicial delays, consequently
affecting recourse to the seller, if any.
4) Localization
Global e-commerce sellers need to be ready to consider local
factors when entering a foreign market. Sellers commonly face language and
cultural barriers and fail to understand consumer habits. While there are many
off-the-shelf translation software's, sellers need to take care that the
website supports a number of languages and that the translation communicates
what is intended. Marketing campaigns also need to be carefully worded. To cite
a well-known international marketing mistake, Coors, a beer manufacturer from
the US, launched its "Turn it loose" campaign in Spain and
translated the slogan literally. When translated into Spanish, the
expression was interpreted as "suffer from diarrhea"! Consumer habits
play an important role and Amazon is one of the leaders when it comes to
localization. The home page or landing page of Amazon is different for each
country, based on the preferences and purchasing habits of consumers. Amazon
India prominently displays the latest mobile phones for Indian consumers. In the
US and Canada, the page focuses on today’s deals for a range of products.
Content and product catalogs need to be updated periodically to capitalize on
seasonal and/or holiday trends, or changes in consumer preferences. Sellers
also need to develop search engine optimization (SEO) tactics in a foreign
country. Although there are several challenges in international e-commerce,
there is a lot of market potential for sellers which they cannot afford to
ignore. One only needs to look at Alibaba’s successes as a platform for mainly
suppliers in China expanding overseas and from the company’s listing in the US.
Through careful planning and execution of resources, global e-commerce sellers
can achieve growth in international markets, capitalizing on emerging technologies
and lower overheads.
Considering a good e-commerce platform is a key to one’s success
in tapping national and international marketplaces and achieving success
in selling across borders , and www.sellinall.com provides just what today’s
sellers are looking for. Explore the rich features that SELLinALL offers and to
make cross border selling more accessible and easier for your business needs.
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