Understanding Cross-Border eCommerce and its Benefits

May 25, 2023 4:02 PM

Cross border eCommerce is not a new concept, but  over the last few years, it has certainly become more popular within the eCommerce world, and is growing at a rapid speed. In fact, according to a report by Statista, it is projected to account for 22% of eCommerce shipments of physical products this year alone. That’s a 7% increase from 2017. It shows that geographical boundaries are becoming less important to online consumers.

In China alone, cross border eCommerce was worth $60 billion in 2020, according to Bloomberg.

Before we look at the benefits of what cross-border eCommerce brings to brands, let’s look at what it is exactly.

What is Cross border eCommerce?

Cross border eCommerce is exactly what you expect it to be – selling your products to consumers overseas. It refers to the online trade between a business (retailer/brand) and a consumer (B2C), between two businesses, often brands or wholesalers (B2B) or between two private persons (C2C).

Take Amazon, for example. They are constantly adding new countries, having just recently launched Amazon Netherlands.

The statistics mentioned above show that what cross border eCommerce offers is the opportunity to sell products to new markets, thus boosting sales. But as with all things, they come with challenges, and questions must be asked. Questions such as – is there demand for the product? Is your company capable of handling returns? Is shipment to these countries easily accessible and possible?

Benefits of Cross border eCommerce

International Expansion Opportunities & Brand Awareness

Selling your product across borders naturally increases your brand exposure and thus exposes you to better business opportunities.

A great example would be Apple, who uses “apple.com” as their main company website for international users to purchase products specific to their location. This way, Apple is given a competitive edge and is available worldwide.

When a consumer understands that you are selling globally, they identify you as a market leader, and this is especially so if you are offering unique, unmatched quality products.

All Year Round Demand

Selling your goods locally only can be seen as the equivalent of ‘keeping your eggs in one basket only’ – and this is never recommended. Why? It can be devastating on a business, especially when the demand for products decreases. This is more so apparent in smaller countries/cities with a smaller population. Cross-border eCommerce allows you to take advantage of a wider population all year round as your ‘eggs’ will be spread in different baskets,

Increased Business Sustainability

Cross-border eCommerce pushes brands to follow local and international sustainability laws, therefore leading them to embrace sustainability more and embed it in their brand values and products. This is seen as a major win for the environment and for sustainability goals.

According to gepard.io, Intel is taking on corporate responsibility by recycling 75% of its waste.

Final Words

Currencies, payment methods, shipping and language barriers continue to be obstacles that businesses must tackle when taking on the decision to manage cross-border eCommerce, however the pros we have seen certainly outweigh the cons, and as it stands, cross-border eCommerce is here to stay. Not only is it here to stay, but it is highly encouraged, should they have the capacity, that businesses consider it to be a part of their growth strategy for their eCommerce business.

May 25, 2023 4:02 PM