Is cross-border shopping here to stay?
Cross-border shopping has been gaining popularity ever since the increase of a young, modern generation that isn’t reluctant to use technology to shop online. Forrester claims in a report that cross-border shopping is expected to gain value further and reach about $627 billion in the next two years. With the pandemic, and more and more people stationed at their desks, the value may possibly rise enough to become 20% of the e-commerce marketplace.
Ideal for Weaker Economies
One of the significant advantages of cross-border shopping is that it can succeed even when economies face difficult times. Countries are currently suffering a substantial financial crisis, and cross-border shopping can help online businesses boost their sales. It may aid the economy since there would be an increased demand for specific items from the border country. Likewise, consumers would be able to get goods and services at a lower price, and in turn, they would be saving money for purchases that they make in their own country.
Ease of Payment
Cross-border shopping usually requires buyers to pay online. Platforms generally have PayPal as a payment method, allowing consumers to pay for the goods they’re ordering in their currency. This way, the buyer feels a lot more comfortable and at ease with the entire procedure. Websites and businesses that want to dive into the global marketplace need to ensure that the consumers have multiple payment options to make payments. Different countries have their own payment methods, and businesses must try to accommodate most of them for the consumer’s ease.
In the current age of globalization, shopping has transcended borders. With the help of international marketplaces, shoppers can get their hands on items at a lower price. Cross-border marketplaces by deepening the pool of available customers can reduce the uncertainty manufacturers face when predicting demand. Customers also have a wider choice than a conventional marketplace. Technology has played an imperative role in introducing consumers to cross- border shopping. With the help of technology, remittances have made it easier for consumers to indulge in cross-border shopping. Multiple digital remittance services allow users to send and receive money quickly.
A Golden Opportunity
As a lot of vendors have already realized, the size of this marketplace is enormous, and it holds immense potential. With the help of international shopping platforms, vendors can list their products and instantly reach a massive audience and expand their consumer base. It can, in turn, lead to growth in related areas such as logistics and digital payments.
Likewise, consumers have the opportunity to buy items from another country. The scope is enormous if you consider that every vendor comes from a different part of the world. Vendors would also be able to reach out to customers who belong to remote countries with whom there is not much trade otherwise.
According to PayPal's Cross-Border Consumer Research, consumers belonging to small but financially well-off countries are highly likely to have purchased an item from an international vendor.
It’s pretty apparent that consumers in these countries are wealthy, and they may not be able to source the same products in their domestic marketplaces. Approximately half of the consumers stated that the items’ cost was the prime factor motivating them to make the purchase. This suggests that even though they may have the same products in their domestic market, they may not be available at a suitable price. Amazon global store, Wish, Etsy, and Aliexpress are some of the sought-after marketplaces.
Barriers That Hinder The Growth Of Cross-Border Shopping
While it is clear that the future of cross-border shopping is bright, there is a lot that is holding it back from gaining more popularity. The lack of awareness is one reason why vendors are unable to make the most of the opportunity. The mechanisms present in the market are all unfamiliar to them. Additionally, there is a lot of paperwork involved, which further slows down the process. This is a reason why despite being a fast-growing retail channel, its growth is being slowed by barriers. Some of the barriers include long transit times and unreliable delivery windows, complicated and tedious return procedures, lack of tracking information, high taxes, and customs, etc.
The Future Of Cross-Border Shopping
Despite these barriers, it is estimated that cross-border shopping will keep growing, and the annual global revenue will increase more than two-folds by 2024. Therefore, as barriers slowly begin to pave the way, vendors would be able to provide services matched with specific markets regardless of their location. The differences between domestic and cross-border marketplaces would slowly blur, and it wouldn’t make a difference if consumers buy domestic or foreign goods and services. Prominent companies such as Amazon are already working on making this as easy as possible and there are payment gateways which make the payment process faster and more secure. N2Xpress is one such platform which can be used by sellers and buyers for cross-border payments.
The growth of cross-border shopping is accelerating, and soon enough, vendors would be able to expand their businesses in the international markets without any hassle. With some research and help in the right direction, vendors can learn more about consumer preferences and business customs to customize their services according to the international audience.