There was a time, not too long ago- when eCommerce was considered traditional retail with wings (somehow reminds of the Red Bull ad). And then came the sometimes misplaced expectations of growth, breaking star-studded valuations etc. The dust then settled and thence came the realization that there is no silver bullet, multichannel needed to evolve- it did, and then some.

The advent & growth of online marketplaces, huge investments & more recently –consolidation, has been a game changer for both: Small/mid-sized brands, who can leverage these platforms for new revenue streams and Big players, forging strategic partnerships, undergoing Offline to Online; Online to Offline transformations.

Traditionally B2B centric 3PLs also are adapting to the opportunity by undertaking eCommerce Fulfilment & expanding their reach: with last-mile fulfillment at one end & crossing borders at the other.

The customers too are an evolved lot. They now shop for brands & not channels, what was showrooming for them is now web rooming. For them, the line between Online & Offline is increasingly getting blurred & more so – the line separating geographies.

With surging demand Global brands & products are increasingly featuring in both offline shelves and online catalogs. eCommerce is gradually moving towards transforming the world as one- unified market- “In-store Global. Online Local”. Crossing geographical borders via eCommerce hence is not new but its growth is.

The time is Right & the time is Now. And Right Now – Global B2C cross- border e-commerce is set to double over the next five years to reach $424 billion by 2021, with Asia, Europe, and North America accounting for 40%, 25%, and 20%, respectively.

China, Europe & US, in terms of eCommerce prospect base, tick all 3 checkboxes viz. Sizeable, “digitally equipped” customers – who love to shop. And while these locations are also the markets for growth in Cross-border e-commerce, India & SE Asian countries are catching up fast. With internet penetration, growth in eCommerce, these countries are both the consumers & a growing supplier base for the same.

The primary reason for customers to go shopping across borders:

• the need for products not readily available in the home country
• the need for genuine/branded products eg. people from India, SEA buy watches cross-border
• Better quality products (eg. from USA, Europe) & better prices (eg. from China)
• Under-developed /nascent domestic market for eCommerce could be the motivation

Electronics, Health & Beauty products, Apparels & books seem to be the most popular purchase categories world over, apart from travel /events.

Few motivators for a business selling Cross-Border to locations (see figure 2) are:

• Direct approach from local customers through web/phone inquiries
• Easy to do business with – Stable Regional regulatory & economic conditions
• Opportunity to cater to a Niche market or category of products
• High growth potential category – Customer Need: Product Fit: Market size
• Ability to speak local language, Regional Partners/Local Experience
• Traditionally popular export destination

In a broad sense, there have been three approaches towards their Cross-border efforts:

1. Strategic: Cross-Border is a strategic intent. For e.g. Retailers with an Offline to Online (O2O) strategy
2. Opportunistic: Primarily driven by partnerships, existing customer base and/or reach. For some R(e)Tailers, this includes selling on regional Online marketplaces and their regional partnerships acting to facilitate this.
3. Reactive: Location choice a factor of demand e.g. from a B2C site. Low risk – Low investment approach. While selling on Marketplaces is usually the inventory stock models.

Barriers & possible ways around them:

So if there is need & the market is great, why are people not buying more Cross-Border? Greener pastures come with fences & challenges.

To read in detail, visit: https://goo.gl/WUpZ9X

We recently concluded a webinar titled “eCommerce Fulfilment: From First Mile to Cross Border“, in association with Economic Times Retail & DTDC. The webinar talked about how eCommerce fulfillment today, is the cornerstone of the strategic approach to leverage new revenue streams. You can view it here

Watch this space for the next in this guest series.

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