Technological advancements in logistics and connectivity have provided a strong base for the growth of e-commerce at a global level. Innovations in digital platforms have made mobile commerce a new normal for the consumers for online trade, all thanks to a few clicks away payment options available nowadays. This is not just limited to domestic trade, e-commerce has a global reach now and its own place in the international market. The new-age customers make more informed decisions in online trade after comparing products online; they look for the best deals, even outside their countries. In this article, we intend to explore and understand more about the trending cross border e-commerce.
What Is Cross Border E-Commerce
Cross border is the process of selling goods, products, or services from a website of one nation to another country or international customer. In layman’s language, it is e-commerce which is operated at an international level. Cross border e-commerce can be B2C (Business to Customer) or B2B (Business to Business) or even C2C( Customer to Customer). Consumers and retailers experience more flexibility and control over their orders in this type of business model.
This trend is likely to keep growing as innovations in payment solutions such as UPI, Gpay, PayPal, etc. have made it easy for anyone to complete the transaction while sitting at their place. Another thing is the parcels’ delivery systems, which form the backbone of this industry. Advancements in logistics have resulted in a boom for the cross border e-commerce industry and are likely to maintain its pace in the upcoming future.
Benefits Of Cross Border E-commerce
E-commerce itself has a range of beneficiaries for the retailer as well as the consumer. However, here we are looking specifically at the benefits provided by cross border e-commerce.
Expansion
Everybody in the business industry wants to expand their trade to the last possible end. In cross border e-commerce, you get the opportunity for international expansion of your business and penetrate the markets of developing as well as developed economies around the world. There are no geographical and demographical limitations to your products or services in the case of cross border e-commerce.
Revenue
Higher demand and supply chain generates more revenue. When operating in the international market, you can gain more recognition and amplify your sales by properly targeting the customers.
Brand Awareness
One could provide fresh life to his/her brand through cross border e-commerce. Customers nowadays prefer validation over preference, so brand awareness should be your priority in cross-border e-commerce.
Sustainability
Cross border e-commerce is growing rapidly and evolving into a sustainable business model. Therefore sellers don’t have to worry too much as the business is growing towards sustainability.
A strong Customer Relationship
When your customers start trusting your products they also develop faith in your brand. With cross border e-commerce, you can develop a strong relationship with customers across borders.
Tap Into Untapped Marketplaces
With cross border online trade, you could sell those low-demand domestic products in other countries where it could provide more benefits to your business.
Complications in cross border Ecommerce
Along with the benefits of cross border ecommerce, one should always pay his/her attention to the challenges faced by the industry as well, so as to be prepared with a holistic approach to overcoming those challenges.
Payment & Currencies
Cross border payments regulations and legalities are the first things to look upon before launching your cross border venture. Also, different countries mean different currencies and it can be sometimes frustrating for you as well as the customers. Therefore your brand should display each and everything in accordance with the country concerned. There are several cross border payments fintech options available to ease the process.
Shipping
International shipping could be a daunting task as there are various factors like tariffs, medium of transportation, transit time, insurance, customs regulations, and fees involved with other legalities.
Taxation
Each country has its own tax legislation for foreign exchange. This different tax legislation affects the cost price of the goods you wish to sell and if the customers realize excess taxes applied to the product, it could lead to a negative response as well as a negative customer experience.
Language & Culture
Translation of your ecommerce site into the native language of the particular country is essential. Also, your advertisement could look good in one country but not suitable for another, it may be due to the difference of culture. Ecommerce companies should strategize and evolve with the language and culture of the particular society they are targeting!
Return Policy
The majority of online shoppers look for a good return policy before making a purchase. It is also a fact that a good return policy or a free return policy could provide you with a competitive edge over others. It makes the customer more confident while buying and more satisfied with your brand. It is important for a brand to minimize the fear of buying the wrong size or color of the product in the mind of the customer.
Challenges Faced By Cross Border e-commerce
Besides the benefits offered by cross-border e-commerce, there are several issues faced by cross-border e-commerce which are discussed below.
Currency
Brands face a lot of obstacles while trading across the borders, one of which is the currency. An extensive automatic conversion and display of the right currencies according to the nation is necessary when dealing with cross border e-commerce business.
Payment Methods
Customers across different countries have different ways to buy products and prefer different payment methods. Brands must consider the effective payment methods which are familiar and well used in that respective country.
Shipping
It is a complex step that is unpredictable as well as expensive. Shipping the product to the right place at the right time is not always in your hands. Offshore business involves third-party service providers and brands need to also care about the customs regulation, tariffs, and fees according to different countries.
Transportation Method
The medium of transportation for shipping goods or products is very crucial for your cross-border business. Air Transport is an expensive but faster mode of transport when compared to less expensive and time taking water routes. Weather conditions, natural disasters, or customs regulations can result in delays in delivery.
Insurance and Restrictions
Finding the right insurance partner for the safety of your products is an important task. One should also take care of the policies and the list of restricted items and compliances according to a particular country.
How YRC Can Help You
Wondering is it the right time to go global? Or confused about payment regulations or currency conversion? Explore the immense possibilities of cross border eCommerce with YRC, a leading consultancy for anything related to your retail business and operations. We solve everything for you and equip you with basic to next-generation solutions for your retail venture. YRC, Your Retail Coach has years of experience in providing sustainable solutions for various business models.
With YRC, you don’t need to get stuck with daunting tasks. Keeping in mind all the factors issues associated with cross border e-commerce, we formulate a holistic strategy to scale your business globally with a promising future. So, Consult us today for a consistent and prosperous cross border eCommerce business.