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Cross-border strategy for e-commerce 

marketplace integration illustration

“If you want to grow, you need to take a risk and cross the boundaries”, they say. The quote may seem a cliché, but is valid for various life situations, and so much for eCommerce business, literally. Nowadays, a modern consumer is very aware and determined to pick the best product and service available. Being present only on a local market means declining the growth. Cross-border selling is a sweet promise. 

What is cross-border e-commerce? 

Internet and growth of global logistics gave an opportunity to expand business outside the domestic market. What is cross-border eCommerce? Simply, it’s online sales to consumers in different countries. Those transactions may be both B2C, B2B, C2C and D2C, the possibilities are wide, and thanks to such solutions as marketplaces or selling via social networks, they continue to expand. When searching for a perfect product, we don’t put the location of the shop as a priority, we refer rather to the brand we like, or the features of the item. Why you should consider expanding your business to other markets and starting a cross-border sale, and how to approach this challenge? Read the article to find the answers. 

Why cross border eCommerce is the future of eCommerce? 

Cross-border e-commerce has a 21 percent share of the total worldwide online trades. There are predictions regarding how this share will grow to over $1.4 trillion in value. The exciting thing about global online trades and cross-border retailing is that 12 nations collectively have an 80 percent share in the trades. These nations include France, Kuwait, UAE, Switzerland, Brazil, Japan, Singapore, Germany, Hong Kong, the UK, and Australia (source: https://www.eteam.io/) Some studies show that worldwide flow can double or triple by 2025. 

Clothes, electronics, luxuries – customers often choose to buy from abroad. In the last two years, many retailers moved to online sales, or expanded sales for different countries to make sure they will sell enough to survive this challenging period. 

The recent situation is also a perfect example of what we can expect in the future, and why cross-border strategy is a must. We may be well equipped with AI tools that will help us predict trends, demand, or suggest proper business decisions, but still, there are situations we can’t predict. Companies learned a lot since the pandemic hit the globe, and to avoid a crisis in the future, they will put a focus on flexibility, diversification, risk reduction. Cross-border eCommerce has it all, therefore it will be a frequently chosen option. 

Initially, it was a huge challenge to sell abroad, because of delivery, costs, payment, language barrier, but the market is changing and nowadays it offers a wide choice of different services that support international sales. Solutions available with just one click, quick integrations will support the future growth of this channel. 

Is cross-border e-commerce essential for your business to grow? 

Well, this is a question we can’t answer with 100% conviction, as every business is different, each brand has a different story and status. Let’s analyze typical cases, in the context of expanding sales abroad. 

  • Well-established business on the local market recognized brand. This is a perfect base to ask for more and go beyond the boundaries. You have a nice product, you know already your customers’ behaviors, all you need is to put some effort into the research to find the right markets that will embrace your offer well. Of course, you take a risk that foreign customers won’t react in a way you expect them to do, but all in all, it’s usually the cost of sending some stuff to an external warehouse and bringing it back. More about the best option to start cross-border sales you will find later in the article. 
  • The new product, still a lot to achieve locally. Probably you will put all in blowing your business through one channel, not even dreaming about customers from foreign countries. It’s logical, as the start requires a lot of investment. But what if you back the wrong horse? Will you still have the courage to start everything from the beginning? Here the research sounds to be necessary homework as well, with deep analysis of the output. It may happen, that your business has potential that indicates real profitability to enter other markets. Consider this. 

What about cross-border eCommerce logistics? How to handle order management You shouldn’t worry too much, once you found a niche for your product, you can outsource purchase operations to companies that provide cross-border fulfillment services or manage it through a cross-border eCommerce platform. 

Take these steps to succeed in cross-border e-commerce 

Once you spot the opportunity in expanding your business to other markets, it is crucial to follow a well-designed strategy. “Failing to prepare is preparing to fail”, therefore use the best of your knowledge, and experts’ experience to approach the challenge in a way that will make sure you succeed.

How to start? 

1. The research 

As mentioned above, you will definitely need to analyze the markets and your business – if it is fully ready to enter new countries, what will be your strong and weak points and how to manage them. Every market has its local specific, and it’s good to know as many details as possible. There are a lot of useful reports about markets, industries available on the web, so spend some time on research or buy such a service from an external company. You can start with reading our Explore the Market series about eCommerce in the most popular countries, such as the UK, Germany, Spain, Italy, France, and more. 

2. Legal aspects and other regulations 

This may be one of the toughest parts, but don’t worry, you can ask for help from legal experts or government entities. Before launching a cross-border business, you need to follow each country’s regulations regarding shipment, taxes, and law generally. If you choose a service of fulfillment network, you will shift some duties to logistic operators, worth considering. 

3. Payments 

Your website needs to be prepared for foreign purchases, and this, apart from being translated to a local or popular language, means accepting payments in local currency and by a safe and well-known payment provider. If your research was complete, you will know what payment method is preferred in a country, how consumers treat shipping costs, etc. 

4. Marketing 

Even if your product is a super-star, it won’t sell itself, without any marketing activities. Bear in mind your consumers’ preferences, local specifics, hire a marketing agency, and launch a consistent marketing plan. 

5. Delivery, complaints, and returns 

If you want to be competitive in a new market, you must ensure that your product is delivered as soon as possible and in a perfect way. Studies show that failing in delivery may destroy the chances of positive feedback about a nice product. Every country has its own standards when it comes to time and cost of delivery. Try to be as close to your consumers as possible. Therefore, if for example your product is produced in China, consider using a fulfillment network service. Also, handling returns and complaints in a user-friendly way is crucial but challenging in cross-border sales at the same time. Choose a reliable partner that will help you in this area by offering support in the process, operations, shipment, and storage. 

Those are areas every eCommerce that wants to go global will have to deal with and handle properly. Depending on the size of your business, position on the market, your resources you will need to pick the right strategy:  

  • start small in just one country, or shift huge resources to selected countries straight away 
  • promote the local brand, or create a new one for foreign markets 
  • handle it all by yourself, or partner with 3 PLs or fulfillment network 
  • hit one sales channel or give a try to all of them 

There are a lot of question marks, challenges, but worldwide sales and reports show it’s worth taking a risk. Fingers crossed for your decisions. If you need any help, or expertise on cross-border sales, don’t hesitate to contact us.