Cross-border e-commerce was growing even before the pandemic struck. Lockdowns, travel restrictions and the wholesale disruption of existing brand loyalties over the last two years have given it a further boost.
Between now and 2026, the value of direct-to-consumer e-commerce sales made across borders is forecast to grow at a rate of 17% a year to reach a total value of more than $2.2 trillion.
This trend can be seen in specific markets, and these figures are only likely to get bigger.
In China, for instance, shoppers spend almost $80 billion a year on goods bought from e-commerce merchants based in other countries. Southeast Asia already spends $25 billion with merchants selling cross-border.
In Eastern Europe and the CIS, the value of the cross-border e-commerce market is $12 billion. In the Gulf States, it’s $8 billion. And in the Eurozone, it’s $73 billion.
In Europe – where consumers in places like the UK and Finland already spend significantly with US businesses – 25% of 2020’s e-commerce was cross-border.
That’s a 35% increase from 2019, bringing the value of the cross-border market to €146 billion. The increase for the previous year was just 3.3%.
In Asia-Pacific, the share of online shoppers buying goods from merchants in other countries rose from 50% to 75%.
One recent survey estimated the region’s total cross-border e-commerce spend to be worth $476 billion — and rising.
On average, cross-border sales account for around 14% of all e-commerce sales in Latin America. But in some markets, this percentage is already higher.
In Argentina, for instance, consumers already buy 19% of all online purchases from merchants based outside the country.
A recent study of Latin American e-commerce predicted that the cross-border segment will grow by 94% just between 2020 and 2023.
In its latest report PPRO takes a look at the global e-commerce market in 2022 and how American businesses can maximize their efforts as they enter new global markets.
To bring US goods and services to a global market, merchants must know how to adapt and localise, including the opportunities and payment methods unique to the regions and countries into which they plan to expand.
Considering 80% of consumers will abandon a transaction if they reach the checkout and cannot find a payment method they know and trust, it’s clear that to ensure maximum consumer acceptance and the best possible conversion rates, a site must offer a range of familiar and trusted local payment methods.
To better understand this challenge, the report provides comprehensive research on international payment methods, trends and cultural insights to help payment companies, merchants and retailers break into the global e-commerce market.
“US merchants and retailers need to understand that in order to compete with international brands, they need to prioritise the customer’s preferences when it comes to payments,” said Claire Gates, CCO at PPRO.
“The global e-commerce market is booming and if US merchants want a chance to be top players, they need to be agile enough to evolve with the current payment ecosystem to expand into new regions and win new customers.”
Key findings from the report:
Consumers need retailers to care about their preferences
A recent study found that between 35% and 45% of what a consumer regards as a “good service” is contingent upon that person’s culture and background.
The more a merchant’s digital channels feel authentic to the shopper’s language and local culture, the more likely that shopper is to complete the transaction.
However, localisation in this context is far broader than simply translation, important as it is. It means optimizing every aspect of your site and your apps to meet local needs and preferences. While the e-commerce world is more interconnected than ever, localized strategies will always win out.
Your alternative is their normal: why local payment methods matter
Almost seventy percent of Americans have a credit card, but globally this is true of only 18% of consumers. According to research, up to 80% of consumers will abandon a transaction if they reach the checkout and cannot find a payment method they know and trust.
To ensure maximum consumer acceptance and the best possible conversion rates, US merchants must offer a range of familiar and trusted local payment methods.
American brands are strong
The good news is that American merchants are competing effectively in these growing cross-border markets. Asked where they bought their last cross-border purchase, 50% of Mexican shoppers, 47% of South Korean, 29% of Japanese, 28% of Australian and Indian shoppers and 20% of Brits all say it was from the United States.
As the global cross-border market grows, so do the opportunities: untapped regions and consumer groups that are participating in e-commerce for the first time are a ripe target for merchants, especially because of the acceleration of online shopping during the pandemic.
If US online marketplaces, brands and stores want to make the most of these opportunities, they have to be prepared to compete in today’s rapidly changing market. And the competition is fierce.
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