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Cross-border trade opportunities are opening doors for Asian retailers

Brands and retailers across Asia are ramping up their cross-border trade strategies, with good reason. 

Around the world, e-commerce is on the rise. Sales on Amazon’s international marketplaces, such as Amazon UK and Amazon Germany, are up 38 per cent year-on-year. Online spending in the US is expected to climb 18 per cent this year, and consumers in both North and South America are increasingly turning to global channels to meet their shopping needs.

As consumers become comfortable with international purchases, there’s another influence that’s driving retailers to get products in front of overseas buyers:

Cross-border trade is no longer the complex undertaking it once was. From the availability of worldwide marketplace distribution centres to currency conversions and language translation services, numerous options have emerged in recent years that make it easier than ever to conduct e-commerce across continents.

Here are two of the most compelling reasons to prioritise international sales, along with several recommended strategies for cross-border trade success. 

It allows retailers to get products in front of more purchase-ready consumers 

Global consumers are relying on e-commerce more than ever to fulfil their shopping needs — and they’re turning to a wide range of platforms and markets. Retailers that cast their nets wide ensure products are discoverable on the channels where people are most likely to buy.

For example: In the US, where most e-commerce has historically happened on Amazon, coronavirus-related closures have pushed people to spend more time on additional channels such as eBay, Walmart and Target. Many are purchasing items they used to buy in-store, from sellers they hadn’t been exposed to in the past — including international retailers.

Those cross-border transactions are proving to be highly profitable. As more products are being sold directly to consumers online, instead of through traditional store distribution systems, Americans are placing orders as much as five times larger than the typical in-store purchase. 

Online buying is rising in other markets as well. An estimated 57 per cent of Europeans are using digital channels now more than ever, and popular Latin American marketplace MercadoLibre registered 1.7 million new customers in just one month — many of them from Brazil, where online shopping rose 27 per cent as a result of pandemic-related buying.

In each of these areas, it’s convenience and pricing (not location) that has the biggest influence on buying decisions.

It’s a strong strategy for future-proofing business

While retailers that sell domestically or in a handful of key markets can grow and expand, there are limits to how far they’ll go. If a company runs into excess inventory or logistics issues, those limitations become even more pronounced.

For this reason, more retailers are relying on cross-border trade as a way to future-proof business. An apparel retailer in South Korea, for example, might turn excess winter clothing inventory into in-season sales in Australia and New Zealand. If products don’t sell on certain channels and in certain regions, having a diversified portfolio of global marketplaces increases the likelihood they’ll perform well in others.

Concerns around trade tensions may also cause some companies to consider new markets, many are finding this diversification to be a key component from an operational standpoint as well. Channels such as AliExpress and Globalsources.com allow companies to pursue consumers across Europe and elsewhere, ensuring a steady source of revenue should tensions increase.

How to effectively engage in cross-border trade

Worldwide, 150 million more people will be first-time e-commerce buyers this year. Online sales are expected to see more than 20-per-cent growth in nine countries ranging from Spain to Russia.

In other words… For retailers that haven’t yet made cross-border trade a top priority, the time to start is now

Based on ChannelAdvisor’s work with thousands of brands and retailers around the world, several steps can help ensure cross-border trade strategies are effective.

First, the most successful companies are those that ease into the process by taking advantage of global marketplaces designed to help handle complexities such as product content translations and international taxes. Examples include Amazon Global Selling, eBay Global Shipping, Fruugo and Wish.

As the process of selling internationally becomes comfortable, there are hundreds of additional channels to consider. The key is to identify which ones make the most sense for a company’s specific product catalogue. Businesses that sell in the home and lifestyle categories may find marketplaces such as Wayfair and MyDeal appealing, while fashion retailers are likely to be successful by targeting platforms like Zalando, Otto and La Redoute.

Most importantly, being able to manage an expanding array of global e-commerce channels in one central platform will help ensure product content is up-to-date and inventory stays synced across platforms. 

It may sound like a big undertaking at the outset, but investing in global e-commerce is worth the effort. Brands and retailers with strong cross-border trade strategies have been known to reach consumers on dozens of different channels — and increase sales as much as 1000 per cent.

  • Simon Clarkson is MD APAC at ChannelAdvisor.

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