Four Realities to Cross-Border Commerce Today
By: Wendy Jones, VP of Global Expansion and CBT, eBay
Shipping and delivery are critical pieces of the e-commerce experience. So last year, I met with a number of national postal providers in emerging markets to explore ways that eBay could partner to help improve the import process on behalf of our 155 million buyers and sellers.
During one such meeting, I toured a national customs facility –independently operated from the postal service – which processed incoming packages from around the world. And I was struck by the logistical challenges that this facility had to solve. It often took more than one week to process incoming packages, and during that time, there were multiple manual touch points. Perhaps most surprising was that to accurately value items and apply taxes and duties, customs personnel were looking up many of the packaged items on eBay and other sites.
This example may sound familiar. Around the world, as e-tailers look to expand their addressable markets by selling cross-border, they are confronted by challenges like these – and other, new realities.
Today at ChannelAdvisor’s Catalyst conference, I had the opportunity to explore four of these new realities with entrepreneurs and business owners trying to figure out how to harness the global e-commerce opportunity:
- The world is getting smaller
- Consumers have new expectations and the way they shop is changing
- Competition is heating up
- To go global, you have to go local
Here’s how we at eBay view the landscape:
The world is getting smaller
The world is getting smaller, largely driven by innovations in technology, and because of that, the world is simply more connected.
This is predominantly a result of the mobile movement, which has changed how we communicate and connect with each other – and in the context of commerce, has especially changed the way we shop and pay.
Think about this. Last year, mobile overtook the PC as the primary way consumers go online, largely driven by BRIC and emerging markets.*
- India and China were projected to have added more than 400 million new users of Internet enabled smartphones to the global network. The US added fewer than 50 million.**
- In South America, the percentage of page views from mobile devices tripled from 2013 to 2014.+
And now, wearables are poised to connect us in new ways – maybe even better than ever before. When you want to build a global business, you have to leverage these new technologies to reach the consumers who are using them.
Consumers’ expectations and behaviors are changing
The pace of change that technology is driving is also changing consumers’ expectations and how they shop.
They simply expect more.
Without the limitations of wired connections, they have more choice. They can go online anytime, anywhere, and they can explore the world – they have access to the world’s trends, influencers and styles – whenever they want.
But because the brands and products they want can be difficult to find or too expensive in many countries, these global consumers are motivated to go beyond their borders to access better selection.
This leads them to international websites in addition to domestic ones. To meet the higher standards consumers have set, these new destinations are quickly evolving to deliver domestic-like experiences on cross-border transactions, which becomes a competitive differentiator.
Merchants looking to attract this new type of global shopper have to deliver against their expectations for selection, good value, and a simple, trusted experience, and also have to compete with a growing number of competitors.
Global competition is heating up
As more and more consumers come online, and as technology offers retailers an opportunity to reach them, competition around the world is heating up. More and more players are moving against this global customer base.
- The big e-tailers like Alibaba and Amazon are getting bigger and growing considerably faster than market rates of growth.
- “Bricks and clicks” are making omnichannel investments and optimizing their retail footprint, which for many has resulted in strong ecommerce growth.
- New types of companies are angling into ecommerce: engagement commerce companies and verticals experts, social communities and top-of-funnel players. The field is intensifying.
- At the same time, merchants from around the world are coming after the markets where strong domestic players operate. In the US, for instance, it’s no secret that merchants in other countries are targeting customers here.
Fortunately, in ecommerce, there will be multiple winners. And these two data points are the most telling in support of that:
- The retail industry continues to be fragmented, with the top 10 retailers representing just 11% of the market in 2014. And that hasn’t changed much in the last two years.^
- Consumers are shopping more sites – twice as many in 2014 (on average, 5.2) than they did in the last two years (2.5).^
This heightened competition is a global reality as all types of merchants and platforms try to capitalize on the international ecommerce growth opportunities.
To go global, you have to go local
To be successful in these markets, retailers and merchants must also be relevant there.
One-size-fits-all doesn’t work across the global commerce experience. Consumers want to shop in their own language, pay in ways that are familiar to them, count on a reliable and trackable shipping solution, and know that they will get exactly what they ordered — at a minimum.
So, companies like eBay and others have tailored their experiences around the world to recognize how consumers in various markets want to shop, which helps the merchants who sell on eBay’s platform feel local.
We work to do the heavy lifting on behalf of eBay merchants — so they can do what they do best.
The goal of being relevant in the markets in which merchants participate is removing the barriers and concerns to motivate consumers to purchase more, and increase the opportunity available to retailers.
Affect a global mindset
The opportunity for retailers to expand their addressable market is tremendous, and I believe there is a significant action that is required to get started selling globally, or to expand an existing business:
Affect a global mindset.
We’re in a new retail environment where technology has broken down the barriers that existed within commerce.
As a retailer, your addressable market isn’t the US, or the US and parts of Western Europe; it’s the world.
At eBay, our aim is to help you reach it.
Editor’s Note: This post originally appeared on the ChannelAdvisor blog.
*eMarketer, Global Mobile Landscape 2014
** The Guardian, “Smartphone explosion in 2014 will see ownership in India pass US,” Jan. 13, 2014
+ Mary Meeker, Internet Trends 2014
^ Forrester; Euromonitor; NRF; Company Financials; Morgan Stanley