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Key Business Drivers and Opportunities in Cross-Border eCommerce

Source: Payvision BV 

Independent global card processing solutions provider Payvision reach some interesting conclusions in this 2014 white paper released in the year the eCommerce celebrated its 20th anniversary. The result of a collaborative global survey between merchants, payment services providers and other key eCommerce industries, the findings point towards a retail world that’s keen to cross borders with mobile devices leading the breakout – but still wary of spending in unknown markets.


Undoubtedly eCommerce has exploded across the globe, and is still going strong. For businesses to continue driving forward, and to stand out against a vast backdrop of successful players, one solution is to disregard borders.

This survey identifies how surveyed merchants generate cross-border profit, their preferred markets for driving growth, which markets hold more challenges, and why.

Global eCommerce facts & figures

Worldwide business to consumer (B2C) eCommerce reached USD 1.25 trillion in 2013, and should hit USD 1.5 trillion by the end of 2014, according to estimates by eMarketer.

While in 2013 the main contributing market continued to be North America (at USD 431 billion), by the end of 2014 the Asia Pacific region is predicted to take the leading spot, and make the largest contribution to global eCommerce.

This makes the Asia Pacific region a desirable choice for expanding business within Europe and North America;  markets whose domestic eCommerce growth is gradually slowing down. However while the Asian markets are certainly alluring, for many merchants the complications of expansion into the unknown outweigh the business opportunities.

Engines for growth - ‘the year of mobile’

Mobile commerce alone contributed approximately USD 133 billion, or 10.6%, to global eCommerce in 2013. And this is set to boom; predictions estimate that mobile commerce will reach USD 516 billion by 2017, almost half of which will be driven from Asia.

eCommerce is thriving through word-of-mouth, and a community of peer-based online consumers. The most successful players generate value through communication, brand equity and valuable content, where marketing is no longer a one-way channel.

While credit cards still dominate the online payment sphere, the demand for alternative payments in domestic markets such as e-wallets, cloud-based payments and mPOS, is on the rise. These preferences vary considerably per region, and per country.

Consumers are no longer hindered by their own borders—they can browse a store front in any country they choose. If products overseas are cheaper, more trustworthy, or simply more ‘exotic’, consumers will be tempted.

The rise of cross-border eCommerce

In 2013; 50% of their respondents confirmed they did not yet engage in cross-border eCommerce. Yet in 2014 only 18% of survey respondents admitted they continue to focus solely on domestic sales, still believing cross-border eCommerce to be more complex and less profitable.

The biggest game-changer: mobile commerce

A significant number of respondents, 37%, confirmed that in their opinion, the biggest game-changer to cross-border eCommerce is the growth of mobile commerce; the purchasing of goods or services via a mobile device. Indeed, when asked more specifically about the rise of m-commerce, merchants and consultants strongly agreed that they witnessed explosive growth; 33.3% and 48% respectively.

How to make cross-border eCommerce profitable

From surveyed merchants, cross-border expansion strategies are relatively split; 43% of respondents chose neighbouring countries first, whereas 53.7% targeted consumers with a common language and culture. However, when the survey compilers polled merchants on how they drive cross-border sales, 49% agreed that common language is a more effective driver than geographical location or shared borders, compared to just 6.4% who disagreed. This number is considerably less than their 2013 survey (70.3%), yet it still highlights a continued, if not declining, reservation by merchants to delve into mysterious markets such as Asia, where language and culture can hinder the ease of doing business.

Making online consumers feel at home is crucial. Whether this is accomplished by localising currency and pricing or aligning language or imagery with cultural preferences, familiarity and trust is key to cross-border conversion.

Of survey respondents, 24% noted a reluctance to engage in cross-border eCommerce due to complex foreign tax laws, and 23% admitted to a lack of knowledge regarding local regulation. Finding international partners with local knowledge reduces these risks for merchants, and turns cross-border complexity into a profitable initiative.

To read more click here - Cross Border Payments