For many e-commerce businesses—either corporate or individual—securing a reliable cross-border supplier has become a key factor for business success.
But what does “cross-border” mean? In the online world, cross-border e-commerce simply means selling products across borders using e-commerce technologies. It can also mean an online trade between businesses (business-to-business or B2B) or between businesses and customers (business-to-consumer or B2C).
For B2C, the selling of consumer items ranging from earrings and necklaces to all kinds of gadgets to even DIYs (do-it-yourself) materials and power tools have steadily grown even before the COVID-19 pandemic.
In this article, we look at what cross-border e-commerce is all about and ways to secure cross-border suppliers for your e-commerce business.
Cross-border e-commerce and global trade
Fo B2B transactions, cross-border e-commerce means leveraging e-commerce websites to sell trade items to consumers worldwide. Many micro, small and medium-sized enterprises and small, individual businesses have taken advantage of the relatively easy way to import products and sell these products to the local market.
Cross-border e-commerce also works well for B2C, and even customer-to-customer (C2C) transactions.
Thus, cross-border e-commerce balances out global trade for entrepreneurs of all sizes while saving costs for small businesses in terms of taxes and transport options ( via air or by shipping by sea)
Quick notes: Just how big cross-border e-commerce is worldwide? An industry report said that in 2019, the global cross-border e-commerce market was estimated to be worth more than $570 billion, and is expected to reach $2.2 trillion by 2026, or an annual increase of 17.4%. Another report said 22% of all tangible product shipments come from cross-border e-commerce back in 2016.
Cross-border e-commerce also means companies can potentially expand internationally and reach an even wider audience. With a bigger audience, sales and revenues can also potentially increase significantly.
As an e-commerce company, having a cross-border partner means you can sell even off-season items. While this might be true on countries where seasons radically change, having a cross-border partner means you can provide items that may not be in demand in your own market, but are wanted in other markets. Having international reach also increases your brand visibility, meaning you have the potential to create a global following of enthusiastic online shoppers.
How can you secure your cross-border suppliers?
Before taking the plunge, aspiring e-commerce companies should learn to play their cards right if they want to succeed in cross-border e-commerce.
Here are a few suggestions for finding the right cross-border supplier:
Do your research. For newcomers, it is important to do a bit of research on suppliers with a solid track record when it comes to safety standards and reliability.
If possible check if the potential cross-border supplier has a track record showing efficiency in safely transporting goods. Crossing the border from another country is crucial in ensuring quality and safety standards. Check also if the potential supplier practices industry-accepted cross-border protocols and processes. Keep in mind that having a reliable cross-border supplier is key in building the reputation of your business and earning your consumers’ confidence
Security and anti-fraud. If it is possible, it also pays that you ask your potential cross-border suppliers how they address payment fraud and online security breaches, and what security protocols they have in place. While this information is confidential and not readily disclosed, check for partner testimonials.
Language and currencies. You should also be able to check if a potential cross-border supplier can support multiple languages and different currencies. Your potential cross-border partner should be able to support major international languages as well as currencies. In most cases, the use of English in promoting online trading products should be the norm. But online traders selling their items in a specific country may use the local language to attract a more diverse consumer market.
Almost three-fourths or 72.1% of consumers look up to websites in their own language, while 72.4% of consumers said they would buy products with information based on their own language, research from the Common Sense Advisory showed.
Distribution channels. You can also check the distribution channels that a potential cross-border partner has. Check if the company has a fleet of vehicles, which in many cases, are essential when it comes to timely deliveries.
Payment schemes. The proliferation of online banking payment options like G-Cash and Maya (formerly Pay Maya) have provided flexibility and convenience for consumers. As an e-commerce company, you can check if your cross-border partner can accommodate these popular payment schemes to make transactions even smoother.
E-commerce, especially new ones, should be able to adapt to accepting a wide range of payment methods from several countries from using WeChat Pay to Alipay. There will still be consumers who will remain comfortable in using their credit and debit cards for payments to major transactions. But you as an e-commerce company should stay open to options like direct bank transfers.
Know the regulations. Again, this boils down to basic research. Know the government regulations in the country where your potential cross-border partner is based. Better yet, make sure that communication lines between you and potential cross-border partners are always open. As a budding entrepreneur, you should always be aware of the taxes you need to pay depending on countries’ tax considerations.
Cross-border e-commerce is here to stay
Cross-border e-commerce is here to stay and this is good news for consumers. Why? Cross-border suppliers allow e-commerce companies to minimize costs, which in turn, means consumers get to save as much as 49% on cheaper trading items by buying from retailers abroad online, according to a recent study on US-based consumers.
Cross-border e-commerce also provides an opportunity for consumers to purchase their favorite brands online as these items are not available in their home country for various reasons.
In fact, 43% of consumers around the world resort to cross-border e-commerce to buy items from popular brands that are unavailable in their respective hometowns, the same survey added.
In many countries in Asia, including the Philippines, the likes of Lazada and Shopee have blazed the trail for online shopping. In China, online selling is projected to surpass $1 trillion for 2022.