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Global trends in online retail cross border business


Hello readers,

PFSweb is a 3PL company serving both direct-to-consumer (D2C) and business-to-business (B2B) initiatives, providing services to more than 60 clients who operate in a range of national and international markets including technology manufacturers, apparel, luxury goods, home improvement, home décor, collectibles, food & beverage, beauty & health, aviation, and consumer electronics, among others.
Headquartered in Allen, TX, PFSweb, Inc. is a leading provider of eCommerce and multichannel outsourcing solutions for global consumer brands, online retailers, and technology manufacturers.








A few months ago I inherited this client from my colleague at DHL express. PFSweb is a high maintenance customer, now entering the most important period of the year. 35% of the sales revenue is created in the last 2 weeks of the year. 


I took a look at their most recent eCommerce cross border white paper. I found interestings facts & fgures on : Cross-Border Sales , the reasons why customers shop abroad, primery sellers  and markets and the cross border obstacles.


1. Cross border sales

Worldwide, 35% of consumers currently shop on sites based outside of their home country, up from 26% in 2014. 

As cross-border shopping becomes more habitual for consumers, it’s projected that the total global revenue will amount to nearly $2 trillion of worldwide retail sales by 2018.

2. Reasons why the trend is emerging

With cross-border commerce becoming increasingly popular, it’s important to ask why the trend is emerging. 

  • Globally, 67% of consumers who shop abroad are buying because prices are lower outside of their own country. These prices are usually low enough to make up for additional fees or taxes associated with cross-border commerce.
  • Other reasons can include the accessibility of brands that aren’t available in their own country, a wider range of products, and better customer service.
  • For U.S. consumers, the top three reasons for buying goods abroad are cheaper prices (49%), the ability to obtain brands that aren’t available in the U.S. (43%), and because shoppers are looking for unique or specialty products that aren’t found in U.S. stores (35%).
  •  Chinese consumers have a unique hurdle to jump when shopping since many products produced domestically are counterfeit. In a study by DHL, 77% of respondents cited the need for goods unavailable in China as their top reason for cross-border shopping, with 67% stating they wanted better quality assurance when buying items to ensure the legitimacy of their purchases. Other factors included cheaper prices and wider product selections.
  • In Asia, Europe, and Latin America collectively, customers also shop abroad primarily because the products they want are not available in their own region, the prices are lower elsewhere, and because there are better promotions that decrease the overall cost to acquire certain products.


3. Primary sellers and markets

Europe is the world’s second largest regional online retail market behind China and ahead of the U.S. as their cross-border sales grew 16% last year to approximately $410 billion. But as nations alone, the U.S., China, and the U.K. are the top three exporters for online purchases. 

  • The U.S. is favored by 26% of global cross-border shoppers, a percent higher than any other country. 
  • Currently, cross-border sales account for over 17% of China’s retail import and export market. Online cross-border sales in China continue to increase, with sales growing by 50% from 2014 to reach nearly $450 billion by the first half of 2015 alone
  • The U.K. amassed $70 billion (or 18%) worth of Europe’s cross-border sales in 2014 and is projected to grow to almost $100 billion by 2018. The closest following European nations are Germany ($49 billion in 2014) and France ($41 billion in 2014). Approximately 67% of U.K. retailers offered worldwide delivery last year and 65% of their online sales revenue came from international orders. 


4. Cross border obstacles


  • When it comes to shipment duration, most shoppers expect cross-border delivery within one to two weeks of purchasing an item.
  • High shipping costs are also a global impediment for cross-border customers, a factor that largely depends on destination. Shoppers in India (49%), Canada (43%), and Singapore (41%) traditionally have the highest shipping costs, but at a regional level North Americans experience the most problems with steep freight charges.
  • Shoppers were also particularly reluctant to shop directly with independent small and medium-sized sites for cross-border commerce due to logistics, reputation (or lack thereof), and cost concerns, with 57% of respondents ranking direct shopping with these sites as their last choice when shopping abroad.In response, many smaller or specialty shops around the world have been embracing the utilization of large online marketplaces to create cross-border opportunities
  •  For the most part, these large marketplaces have minimized duties and taxes, simplifying cross-border returns and lowering the overall cost for the shopper. These are all factors that ultimately make the cross-border experience and products more attractive and desirable.
5. Conclusion

As businesses, technologies, and economies become more globalized, online shopping continues to spread far and wide, surpassing once present boundaries and increasing product availability to more areas than ever before.

 Though each region and demographic has its own motivations for shopping in different countries (such as broader product selections and lower prices), as well as challenges including customs charges and steep shipping costs with longer delivery times, the growth of cross-border sales shows no sign of slowing down any time soon.




http://www.pfsweb.com/PDF/whitepapers/Online-Retail-Cross-Border-Sales-FINAL.pdf

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