Cross-border e-Commerce: five common challenges and solutions
Your digital business was growing steadily, but through the pandemic it grew beyond all expectations. Your brand is now perfectly-positioned in your own country, but it’s time to move into new regions and markets to make the most of your seamless digital capabilities and strategy.
In 2020, over two billion people purchased goods or services online according to Statista, with online sales passing $4.2 trillion worldwide. In the first year of the pandemic, global retail e-Commerce sales grew by more than 25 per cent.
But a statistic that often goes unnoticed is that cross-border e-Commerce – defined as selling goods online to other parties in another country - is expected to account for 22 per cent of e-Commerce shipments of physical products this year. In 2016, the cross-border e-Commerce market share was just 15 per cent.
More brands are expanding into wider markets - and this shows you are certainly not alone in your international vision. However, ensuring your digital business is cross-border ready is not without its challenges.
Here, SQLI looks at some of the main obstacles and how you can overcome them.
1. Understanding your market
Setting up a digital store in another country isn’t as simple as paying a translator to change all the text from your current site – a thorough working-knowledge of the new market is needed.
Firstly, there may be restrictions around your product. Different countries have different regulations regarding alcohol, food and electronics and so could even be prohibited.
Furthermore, the way you conduct business could upset local customs, laws or ways of life, making it difficult to move forward from the outset.
The quicker you can get feet on the ground or talk to experts in this region, the better. A knowledgeable partner - or working closely with an international digital company - that has a base in this country, or has helped other brands in this region, could be essential.
SQLI has more than 2,100 employees in 13 countries across Europe and the Middle East, with experience of supporting hundreds of brands in many more regions.
Having a thorough working knowledge of so many countries mean there’s often someone on hand who has the answers to questions around how customs, payment solutions or logistics vary from region to region and can be an important cog in your business plans from the very first meeting.
2. Language barriers
Languages can be a difficult hurdle to overcome, both in talking to local people to help with logistics and getting your message across on your various digital channels.
Multilingual customer support in the short and long-term can be crucial in helping the business adapt and flourish.
In research by Common Sense Advisory published in 2020 and taking answers from people across 29 countries, it found that 40 per cent of digital customers wouldn’t buy a product in another language, with 65 per cent preferring content in their own language. This illustrates the importance of getting your online communication right, quickly.
Retailers should partner with a digital agency that can help tailor their online presence from region to region and help remove language barriers. A physical presence in these countries can also help iron out any regulatory or logistical problems that can occur.
Does the partner have offices in this region? Have they developed platforms for similar brands in this language or country?
While SQLI has experience in working with brands all over the globe, for long-term peace of mind, it also has a huge-range of international support with two nearshore service centres in France, two offshore service centres in Morocco and one in Mauritius. This gives customers access to unrivalled service and aftercare in French and English, 24/7.
3. Logistical last-mile issues
While transporting and delivering your products across Europe might be relatively straight forward, you may come up against a different set of obstacles crossing borders in the Middle East, for instance.
Conflicting regulations, differing delivery firms and even the standard of roads from region to region can play a part. In some countries, customers do not even write out precise addresses – causing all sorts of delays with delivery teams.
Do your homework. Could you set-up your cross-border business in a specialised hub that can service different areas of the business in one go?
For instance, at CommerCity in Dubai – an SQLI partner – digital retailers can set-up in an office next to Dubai International Airport, immediately cutting down on delivery times, with warehouses easily accessible from the airport and less time needed distributing goods on a regional level. Times and costs for returns are also be cut.
A customs consulting service is available for new merchants to help them cut through the red tape. A good, working knowledge of the customs process will help companies facilitate a smooth transfer of goods, which can also save time and expense in the long-run.
On top of this, companies can benefit from licensing and business set-up packages and support; end-to-end logistics services; warehouse space; pre-integrated and pre-configured e-Commerce platforms; performance marketing and content support; help with regulations and e-Commerce strategy consulting.
Many similar e-Commerce hubs are now springing up all over the world – and can save a lot of time and money in the long-term through having experts on hand.
4. Cross-border transactions
Did you know some countries prefer Cash on Delivery (CoD)? Do you know your Alipay from your Apple Pay?
Preferred payment methods vary hugely from region to region, with Visa holding the primary market share for international credit cards in the Middle East and Africa and Discover - boasting 57 million cardholders worldwide – popular in Brazil.
Furthermore, e-Wallets are becoming more popular around the world, with Apple Pay the leader in the US and 48 per cent of Chinese shoppers using Alipay. Cash on Delivery is still popular in the Middle East, although credit cards such as Visa and MasterCard are catching up.
Understanding the different markets and adapting your payment solutions accordingly, is essential.
To work effectively in other markets, your business will have to accept payments in the method customers prefer and put in place robust payment procedures to implement this.
SQLI partners with many different payment solution providers that can provide international solutions, including Klarna and Tabby which allow customers to make a purchase from a website and pay back in monthly instalments or up to 30 days after delivery - and checking-in without using a debit card.
While merchants are continually looking to improve the customer experience, consumers are increasingly expecting to find different ways to pay for their goods online. Merchants must be prepared to leave behind the one-size-fits-all approach to payment, with research on each country, industry and consumer-type crucial in deciding which fit is right for your region and business.
5. Returning goods
Returning goods bought in one country can be problematic enough – without the issues that cross-border e-Commerce can highlight.
Factoring in duty, tax, and unreliable delivery firms can be a tall order and if not approached thoroughly, can mean you lose customers quickly.
Customers want free delivery and ease of return. Too many returns, however, can be bad for business.
Ensuring better personalised digital experiences can help cut down on this issue with customers more certain of what they are purchasing. AR tools allowing customers to see what products look like on digitally, before they buy – for instance, trainers, or make-up - could help cut this down further.
Partner with a delivery firm that has systems already in place for international returns and automate the print-return label process to save time and money.
Cross-border e-Commerce can be between a retailer or brand and a consumer (B2C), or between two businesses (B2B), or between two private persons (C2C).
But with each, it is vitally important that both your business – and digital platform – is ready for this expansion.
If you think you are, ensure you have studied the market, including local customs, cultures and payment methods. What would the delivery, logistics and return processes look like?
Get these wrong and it could quickly signal the end of your plans. Get it right and there has never been a better time to expand your digital business into other territories.