According to a report by DHL, global cross-border sales volume has been projected to increase by 25% annually, meaning that it will go from its 2015 volume of US$300 billion to US$900 billion by 2020. This is a staggering amount of increase and is caused by the hundreds of millions of consumers around the world who resort to international e-Commerce sellers to obtain items that are not available in their own local markets.
While we like to consider this as good news for the world at large and for international retailers, there are certain things you should consider before engaging in cross-border e-commerce solutions because this form of e-commerce solution comes with its own challenges and complications. But before we do this, let’s share with you some reasons why we feel that this new pattern of commerce will continue its rapid rise and thrive for a long time to come.
The reasons why cross-border e-commerce is on a rapid rise include:
So what then are the current challenges of cross-border e-commerce?
The current increase in the value of cross-border e-commerce offers more benefits to merchants, but at the same time, it presents before them certain challenges which they will need to consciously address in order to thrive. These challenges include:
Failure to duly consider these setbacks before venturing into cross-border e-commerce might drastically reduce the profitability of these merchants.
These challenges are why you should think it over and have your checklist marked out before venturing into cross-border e-commerce.
Things to be considered vary depending on the size of your business, but general considerations include:
Other considerations include:
Lastly, let’s look at questions you should strive to get answers to before going cross-border with your business.
Questions You Should Ask Yourself Before Going International
With regards to the challenges facing merchants on the cross-border e-commerce fronts, it becomes clear than these merchants have to think strategically to escape the trenches in the terrain. As a guide, ask yourself these key questions before moving into any new market.
Who are my already-existing customers by default and who can I add to this list by my efforts?
The right answer to this question is important because it will present before you a path through which you should focus. One way of getting answers to this question is by analysing web traffics. These web traffics will give you a clue to the number of people who has interest in your product.
Of importance is also the consistency of the traffic. If the traffic is consistent, then it is a sign of massive curiosity which you can swoop in with your product or service and quell.
The demand for my products; will it be able to make enough profit to offset the extra cost I will incur due to added complexity?
On identification of the rate of demand for your product or service, you still need to be sure that your expected profit can cater for shipping, regulations and cost of extra expertise. This is to ensure that you don’t incur loss in your business.
Will I be able to meet consumers’ shipping and service requirements?
It is not enough just to get customers and strike business deals; it is important that you keep to your own part of the bargain at all times. You have to be sure that his country and pretty much his state has mechanisms by which you can reach him with your products. According to a report published by DHL, “24% of consumers have expressed concern about the feasibility of international returns”. Challenges such as distance and the time for shipping should also be considered.
It is the mark of a good merchant to be realistic and open. If you cannot satisfy the needs of any client due to his location, be quick to recognise it and realistic enough to admit it rather than making core business decisions on the ground of hope.
With proper planning and strategies, you will be better equipped to tap into the ever-growing cross-border e-commerce terrain.