cross border ecommerce
Cross border e commerce expansion is a byproduct of the post-pandemic transformation of consumer behavior. This shift has essentially fueled the massive growth of cross border e commerce transactions exhibiting an estimated projection of a USD 7.9 trillion valuation by 2030.
The statistics are no less than astonishing!
Imagine taking your family-owned handicraft enterprise into a global business as you strategically plan your cross-border e-commerce transition. You can transcend borders to 10x your revenue and that too within a stipulated duration.
Or you can take the easiest route. Get started as an Amazon seller to access the biggest pool of customers searching for exactly what you’re offering. It is very hard to make a mark as a new entry into Amazon despite the vast market size looks rewarding.
We’re here to help you with the essentials you need to consider to make an informed decision about going global. Hack the matrix and make your products rank #1 among Amazon US search results with SellerApp.
We’ve been helping hundreds of sellers (like you) with our PPC management services to reach the correct crowd without overspending on Amazon ads.
Keep reading to know how businesses (our clients) made cross border e commerce selling work in their favour and what hurdles they crossed.
| When an overseas buyer purchases a product or service from a local seller online crossing the international borders, the act of it is referred to as cross border e commerce. |
Cross border e commerce transactions exceed geographical limitations. It makes desirable products more accessible to consumers by escaping regulatory constraints.
This makes the concept lucrative, even to established business owners— be it online sellers or traditional store owners.
There is a recent shift in the way consumers make purchases. The smooth online shopping experience has encouraged them to explore options beyond their domestic markets. This led to the success of cross border e commerce— thanks to the underlying technology that enabled it.
There has been a recent surge in the popularity of Indian herbs in the US market. We found the online fitness community promoting Ashwagandha or Shilajit to aid their fitness goal. Numerous Indian sellers took advantage of this scope and sold Indian herbs on Amazon.
They’ve ended up potentially making 4X their usual profit from their local market. As the competition rises it pushes sellers to approach customers with affordable price points, innovative varieties, and convenient payment options.
Looking back US exhibited a modest pace in e-commerce growth in recent years and the predicted growth rate from 2021 to 2025 is at 5%.
Platforms these days have access to technology to facilitate frictionless, cross-border shopping. When coupled with unbound cultural influences from social media it can knock down geographical barriers. This has led to desirability taking charge. Now more buyers seek affordable foreign brands packed with unique features.
Hence, massive growth opportunity awaits regional businesses that can apply strategic growth and ride the wave to enter the international market, especially the US where the multi-cultural environment calls for a range of utility and keepsake items.
No wonder why cross border e-commerce markets will exhibit a 2X leap by the time we reach the end of this decade.
| Product categories | Items in specific | Trends |
|---|---|---|
| Clothing and Footwear | Casuals and activewear | Sustainability is on the rise |
| Health and Wellness | Fitness trackers, fitness gear | Post-pandemic the focus of the population has pivoted to health and fitness |
| Cosmetics and Beauty Products | Skincare products, herbal bath and body care items | People are more conscious of ethical beauty standards. The beauty industry acquires a volume of US$45.52bn in 2024 |
| Electronics | Smartphones, laptops, smart kitchen gadgets | As the living cost increases, US citizens are more drawn towards affordable gadgets and accessories |
| Home and garden | Furnitures of sustainable materials such as cane, jute decor items | The post pandemic shift to at-home works setup influence buyers into spending home decor making grow at a 4.11% CAGR |
Let’s look at some of the ways in which cross border e commerce transactions can be beneficial for your business.
Here, it is important to focus on and tap into two major aspects.
Expanding your market overseas creates a diversified revenue stream for your business. What you could gain from one market is now multiplied by the population you cater to.
Easy math!
In addition to that, markets like the U.S., can be regarded as having a high consumer purchasing power, which means, targeting these markets can offer you considerably high profit potential.
Practicing seasonal sales balancing: when you don’t let geographical boundaries limit the distribution of your offerings, you can make the most out of seasonal sales balancing. It is a way to appeal to different target markets at different times of the year to make steady sales amidst variational demands.
For example, during the holiday season when people in the US are opting for clothing to stay cozy in, Australians are trying on new summer styles to flaunt. You can introduce the remaining summer clothes inventory to this part of the population. While they stay in style you stay in profit!
An international footprint can give your brand an appearance of having superior status. Increasing market reach often helps businesses recreate their identity and re-establish their position in the local market.
For example, Shein recognized the demand for modest fashion in the Middle East as it is culturally preferred. They quickly launched a specific catalog dedicated to modest fashion including longer hemlines and full sleeves to appeal to the population. This is how they made their brand awareness stronger.
Emerging market demands for a specific niche are often patrons of ethnic craftsmanship. This is due to the rising interest in authentic, culturally-rooted products. They are more likely to welcome foreign traditions through cross border e commerce platforms.
As a result, an ethnic brand with its unique craftsmanship can thrive by tapping into the desires of the online buyers of high purchasing power regions.
Selling in multiple markets can expose a business to currency fluctuation risks. But when you sell at a market having a currency valuation higher than that of the manufacturing region, your cross border e commerce business yields better profit. This especially holds true for emerging economies like India where manufacturing cost is relatively low.
With cross border e commerce, businesses from India can calculate profits on currency exchange rates. Some companies strategically focus on capitalizing on favorable currency while investing in particular markets to get returns from currency fluctuations.
Cross border e commerce marketplaces are exposed to a variety of customers hence you can get access to their user data. This enables easy monitoring of consumer preference intricacies across markets.
Although Amazon restricts complete disclosure of data, you’ll still get access to some via Amazon Seller Central or Amazon Ads Console. For better control over data insights try Seller App’s Custom Reports to skyrocket your growth.
This leaves them with insights that can bring growth to the business by fueling marketing strategies, innovating products, optimizing pricing strategies, and identifying new market trends to help them expand in similar markets with ease and competency.
At times the requirement of a product diminishes in a local market while it rises internationally. The profit earned from one market can efficiently offset challenges in another. Either way, it’s a golden opportunity for recycling stocks and extending the product life cycle making sure the surplus inventory is being sold out completely preventing waste.
Mamaearth, an Indian D2C brand has been successfully extending the product lifecycle by extending its outreach. While its performance in the higher potential market declined, they have retained its position among emerging economies where consumers look for affordability and natural personal care products. This opened up scopes for Mamaearth to recycle the leftover inventory and use up the entirety of the stock.
| Regional Expansion | Cross border e commerce | |
|---|---|---|
| Market Reach | Creates a well-connected presence limited within a specific region or country. Orders are fulfilled from local distribution centers, or physical stores of the same brand. | Goes beyond geographical borders. Orders are received directly from customers and fulfilled from specific distribution centers. |
| Regulatory Requirements | Regional businesses when expanding have to abide by employment laws, facility regulations, and corporate taxes. | Businesses must comply with international trade regulations, and pay off customs duties, taxes, etc. Product standards and customs charges vary for each country and product category. |
| Logistics | Reduced delivery time and shipping costs leading to affordable shipping options and limited delivery charges. | Includes international shipping fees (often high). Delivery time is often lengthier than usual with comparatively higher delivery charges. |
| Warehouse | Storage setup by local warehouses and distribution centers situated close to the target market. | Storage setup typically by warehouses or third-party logistics (3PL) providers. |
| Returns | Local logistics with easy return handling. | Managing item returns can be quite challenging due to the complex process, the distances, and the plethora of expenses involved. |
| Product and Service vision | Products and services are designed around local tastes, with a few locally popular payment methods, and regional language support. | Specific focus on multi-currency support, language translations, and region-specific shipping options on seller’s platforms. Standardized products, without much regional influence. |
| Risk Associated | Substantial monetary investment in infrastructure and licenses is required. Lesser chances of landing non-compliance fines/ tickets or added charges due to minor operational lags. | cross border e commerce solutions may or may not have traditional storefronts. While this can let them escape certain local legal obligations, cross-border business requires meticulous execution to avoid paying non-compliance fees. |
| Scalability | More targeted. Comparatively less agile and requires an extensive budget to explore high-potential markets. | Breeds potential for fast expansion with the ability to test multiple markets at the same time. Speed of adaptability and performance determines its scalability. |
To facilitate an easy transition into a global business entity, we suggest a few tips for cross border e commerce selling so they can reap maximum benefits.
International marketplaces: The easiest way to put your foot in the door is to be a third-party seller on Amazon. You can leverage the reach and web traffic influx that the platform comes with.
A major upside to platforms like Amazon is that they come with fulfillment options that streamline storage, shipping, and returns on your behalf. Otherwise, you may experience a challenge navigating through these complexities all by yourself in a new geographical setup. So, penetrating a global market becomes completely free of hassle while teaming up with international e-commerce marketplaces.
So not only do you get clean access to the 180 million users but you also get to lend their Amazon FBA fulfillment option for streamlined access— from the Amazon warehouse to the customer’s doorstep. But what about making yourself stand out from the plethora of sellers who are already competing for the attention of your target audience?
Here’s where you pass the baton to us. We, SellerApp will optimize your presence in the Amazon marketplace, automate your ad placement to bring you quick recognition, and optimize your sales to reach your target revenue. Book a free consultation now!
Third-party e-commerce platforms: Third-party platforms like Shopify come as a complete website solution featuring multicurrency transactions, content localization, shipping integrations, and automated currency conversions.
If you’re aspiring to widen your audience beyond the domestic market, third-party e-commerce platforms can automate your custom duty calculations on your checkout page. In hindsight, this brings clarity to customers about added charges resulting in an elevated customer experience.
Most importantly, this helps you create a centralized control unit for handling multiple markets across the globe.
Best suited for brands with high equity, localized websites let a cross border e commerce solution develop using its full control over its brand narrative. So get a subdomain of your main website to cater to each of the overseas markets in separate ways.
While it retains its original identity, it adapts to each of the local cultures to resonate with the market. In-depth localization, separate customer support, and localized organic marketing, preferably by a local marketing agency will result in a greater level of conversion and customer loyalty.
Multi-channel business presence allows you multiple touchpoints. Interact with customers via Instagram, Facebook marketplace, and TikTok Shop to increase your digital footprint. Specifically for social media, you can dedicate regional pages dedicated to a specific region.
For example, Crocs’s Instagram page operates internationally while Crocs_in specifically interacts with Indian customers. This lets customers bond with your brand as they find your products across platforms they interact with. The probability of a successful purchase thus increases.
International marketplaces such as Amazon and Shopify will give you complete insights into customer data to help you build a detailed marketing channel. This is crucial for sellers to discover an unknown market and associated scopes of improvements, maybe in new product development or brand messaging. As a part of the bigger picture, it will simplify your marketing efforts.
Local Alliances are crucial for establishing new networks across a foreign market. This consists of joint ventures, licensing agreements, local marketing or advertising agencies, and distribution partnerships. This is the quickest most convenient way to tap into the population’s sentiments and develop products or services that precisely understand their requirements.
When you decide to go global you let yourself be familiar with the idea of potential risks. Planning ahead and opting for specialized insurance options like international product liability insurance can shockproof your thriving business. This will become your shield against unforeseeable circumstances in case the shipment is slow or in case of damaged product delivery, missing products, etc. Here are some of the insurance types to opt for :
| Insurance Type | Coverage |
|---|---|
| Product Liability Insurance | - In case of damaged items - Unforeseen legal fines and settlements - Item recalls |
| General Liability Insurance | - Item damage from third party handling - Advertising damage - Legal defense charges |
| Cyber Liability Insurance | - in case of data breaches and cyberattacks - Regulatory fines - Reputation protection |
| Transit Insurance | - Missing item or damage during transportation - Issues raised during customs check |
| Professional Liability Insurance (E&O) | - Negligence claim - Misprinted or incorrectly documented product descriptions or pricing - Delivery fulfillment issues |
| Business Interruption Insurance | - Unexpected disputes in operations - Technical difficulties in storefront |
So you implement the best practices all across and get your results. But once you start gathering feedback you start refining and shaping your product catalog according to market needs. This loop of feedback if implemented correctly can gain you the public preference over your competitors even in a foreign market.
Let’s look at some of the common challenges sellers witness practicing cross border e commerce. We’ve come up with a solution for each probable roadblock.
The network of legal frameworks when considered for each of the emerging markets becomes a web. A web that is too easy to get entangled in. Complying with each of the existing tax regulations, and tracking each of these intra-border trade agreements can be an even bigger challenge when the laws are dynamic.
You may end up paying hefty fines if you don’t abide by the compliance terms. Other ways it can manifest is as delay in transit, which can potentially result in inferior customer experience.
Solution: Global payment platforms such as Tipalti or Rapyd are equipped with features to automate regulatory checks. The system performs the monitoring to provide suggestions on associated laws, helping cross border e-commerce platform owners to outsource the compliance responsibility.
To protect user privacy, different countries have different data protection laws. For example, in the United States, data protection and privacy are so crucial the related laws are neverending. The federal and state-level laws like the California Consumer Privacy Act (CCPA), Children’s Online Privacy Protection Act (COPPA), General Data Protection Regulation (GDPR), Fair Credit Reporting Act (FCRA), etc. guard the conditions.
Solution: Here modern technology comes to the rescue! There are plenty of recognized data privacy management tools in the market such as TrustArc, that automate compliance according to local regulations. In addition to that, include end-to-end encryptions like SSL and allow best-rated gateways like Stripe or PayPal, to the list.
One of the prominent non-technical aspects of entering a market is being careful about the language and culture. It greatly determines success in a certain market as businesses try to reach new audiences.
Oftentimes when the product is developed in a different background it hits the wrong chord within a foreign population. Or their branding fails to deliver the message they originally intended to give. It might even get lost in translation— resulting in a negative brand image.
Solution: Cross border e commerce platforms can invest some resources in conducting thorough market and user research to gauge their consumer behavior. Engaging a regional agency to outline branding strategy and marketing copies can be the easiest way to escape making mistakes while trying to resonate with a target emerging market.
The global logistics system can be affected by any brewing tension in the geopolitical arena which can risk the scheduled movement of deliverables. And unfortunately, these phenomena aren’t under your control!
Solution: To still be in charge and carry out the best service, try aggregated shipping solutions to stay worry-free about delivery across different countries. Never compromise on delivery providers with international specialization like DHL or FedEx.
Currency exchange rate fluctuations come as a part and parcel of Cross-border e commerce transactions.
Solution: Carefully setting profit margins can help manage losses. Sophisticated financial tools or hedging strategies can effectively calculate risks but small to mid-market businesses are not exposed to it.
Cross-border purchases can be tricky. Language barriers may often result in a communication gap, and a lack of quick responsiveness can lead to a loss of reputation. In bigger markets, there are plenty of competitors waiting to replace you.
For example, a seller from a distant Indian town may take time in delivering fluent communication to customers in the the US. When trying to solve urgent issues regarding the transit, missing items or defects a communication gap may frustrate the customers.
Solution: Sellers must adopt customer-centric approaches implementing localized chat support. But we understand that for growing businesses providing communication in different languages can be an issue. Hence, third party retail platforms like, Amazon and eBay are the easiest way to bridge this gap. The platform will come with a dedicated team for effortless communication between both parties.
Consumer rights differ across countries and can seem particularly difficult to manage when the business is spread across multiple countries. During seasons when order influx is high, returns can lead to significant loss.
Solution: A well-defined returns policy that complies with local consumer laws can simplify the process. Partnerships with local distributors (to manage returns) can efficiently cut down on shipping costs associated with returns leading to reduced incurred loss.
When aiming beyond borders, sellers almost always stay prepared to face the storm of unexpected charges. Fines, tariffs, taxes, and additional fees at any point in the fulfillment process are something that have the potential to shake up the entire pricing strategy often impacting profit margin calculations. We suggest to anticipate the budget better to steer clear of unpleasant surprises.
Solution: Global payment platforms such as Paypal, Wise, Airwallex, etc. are capable of offering the transparency we need in cross-border purchases. It handles dynamic currency conversion rates for sellers to view associated charges upfront and make informed decision.
We understand not all businesses hire a team consisting of automation and AI geniuses. Tools and technologies that are required to keep up with the complications need to be implemented along with existing systems. Keeping up with new technological requirements can be challenging.
Solution: Investing in APIs (Application Programming Interfaces) can streamline the use of various software systems. It’s the best time to stay efficient using automated payment processing and logistics management that not only solves the possibility of manual error but also mitigates the chances of businesses being responsible for overlooking management criteria.
Cross border e commerce has opened up the floodgates for businesses from emerging economies like India to explore untapped markets for a steadier revenue stream. Of course, there are several challenges to overcome. We believe you can escape these challenges if you take away the insightful tidbits we have compiled.
If your business breeds the potential to adapt to diverse markets and navigate the way to success through logistical challenges, cross border e commerce is the way to set yourself up for long-term growth in an interconnected market.
Additional Readings:
eCommerce Boom in SEA: Carving the Way to a Powerful Tomorrow
How fashion ecommerce retailers can reduce online returns
Boost Ecommerce Sales with ChatGPT Using 20+ Dynamic Prompts
Launch a Wildly Profitable Ecommerce Business: The Complete A-Z Guide
Boost Amazon Sales with SellerApp Insights!
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Very nice article, exactly what I needed.This article explained everything about cross-border e-commerce clearly.