Cross Border Ecommerce Needs A Strategic Push

Niranjan Gidwani Jul 04, 2023

According to Statista, In 2021, ecommerce accounted for nearly 19 per cent of retail sales worldwide. Forecasts indicate that by 2026, the online segment will make up close to 25 per cent of total global retail sales.

An equally relevant 2022 study by Statista also showed that cross-border ecommerce is projected to account for 22 per cent of all global ecommerce shipments. And this figure is also expected to rise. Therefore, if nothing else, any country state, or online player could keep the same target as their wish list for cross border ecommerce originating out of their shores.

Cross-border ecommerce is the online selling of goods to consumers in different countries. Earlier, this was the strength of large, multinational conglomerates. Now, any growing online business can and should be looking at it strategically. Companies looking to expand their reach, both in terms of depth and width, should seriously begin to look at selling across multiple borders. Cross border ecommerce is a direct and rapid add-on to the imports and exports of any nation, and as the percentage share of this business increases, it will become a significant portion of any country’s statistics.

Good online players must identify a strong moat to enter any foreign market. The experience of good business practices only in the host country is never going to be enough to attract customers in a foreign land. Therefore, when studying to go cross-border, the online player must identify a clear target customer in the market, or identify a need that exists and can be met. The loyalty of the product or the brand can come from the host country connection. In the Gulf region, where the Indian diaspora is significant, there are enough examples and case studies of the success of Indian products and brands which have done well through the regular export-and-distribution models.

If last-mile delivery needs to be done well, then ecommerce can become a capital, people as well as patience-intensive business. A strategy that works in one geography may not necessarily work in other geographies. When going cross-border, online companies would need to focus on building strong localised support in terms of the team, investors, infrastructure and more. This greatly helps to understand the finer nuances of marketing and customer behaviour and to gain a quicker edge. The mistake of operating with remote teams should never be made.

Organised online players should do a lot of study and preparatory work to check out on compliances, documentation, cultural etiquette, and sensitivities before beginning operations. There are many players who set a wrongly thought-out deadline only to realise that regulations and documentation could be way more complex and may delay the whole operation and timelines. Tax laws should be understood well in order to set correct pricing and shipping costs.

The adoption of multiple channels of selling is becoming a complex challenge for brands. Selling on multiple platforms requires extremely careful execution in order to avoid damaging any brand's image and causing losses. Moreover, since almost every player has decided to get on to the ecommerce platform, this has led to an increase in promotional spending to attract new customers. Customer acquisition costs and marketing spends have become a significant expense that leads to cash burn, more so because a majority of marketing spends are being routed to the online model of selling which is still averaging only one-fifth of global retail sales.

Regular investments in technology, increase in fraud, and ecommerce returns are becoming key issues in both domestic and cross-border ecommerce. In cross-border ecommerce, the problem of returns is further complicated. In some cases, companies resort to destroying the returned product rather than import it.

The key to a successful shopping-to-shipping experience for consumers relies heavily on a deep understanding of consumer behaviour, especially as online companies are catering to consumers from different geographies and cultural backgrounds. Addressing different shopping behaviours will have to be localised and personalised to ensure better conversions.

As is always the case, partnering with experienced local and regional specialists takes out the risks of doing costly trial and error trying to understand the market, especially if online players are new to it. Serving a wide audience entails having an even wider and stronger network.

Now comes the even more interesting part. In today’s fast-paced digital world, B2B ecommerce is emerging as a powerful driving force behind the rapid evolution of industries. The exponential growth of B2B ecommerce offers a plethora of opportunities for businesses to capitalise on, making it more crucial than ever to understand the latest trends shaping this dynamic landscape.

As the digital landscape evolves, the global B2B e-commerce market is poised to soar to new heights. By harnessing the power of relevant ecommerce strategies, online players can carve a substantial share in this multi-trillion-dollar pie – a true testament to the transformation sweeping over the world of business transactions.

All it requires is a sharper focus and clarity on the cross-border ecommerce part. Imagine – B2C, B2B and D2C all having a well-thought-out cross-border strategy.