It’s been another record year for eCommerce in Europe and around the world. Online sales are continuing to rise everywhere, driven by significant levels of growth, demonstrating how the increase in online purchases was not only a need in response to the lockdowns imposed in 2020, but has now become a consumer habit. More and more companies are focusing on online sales and, in many cases, they are also opening up to foreign markets. Despite all the challenges faced by eCommerce companies over the past year and all the changes they have had to deal with, the future of the industry appears to be cross-border.
Why should a business invest in cross-border eCommerce today?
The statistics on eCommerce around the world and the prospects for growth
According to data from the Statista report E-commerce in the European Union released in October 2021, by 2025 eCommerce in Europe will be worth as much as 569 billion dollars, more than 504 billion euros.
A very interesting prospect for all those companies which are investing, or would like to invest, in online sales and in the development of their own eCommerce channels.
Obviously, not all European countries have reacted in the same way; for example, the most frequent eCommerce users are the Irish, but it’s been the British who have spent the most, with an average of €1,020 per person per year, almost twice as much as the Italians, at €674. It was the Poles who spent the least, at just €456.
There’s also some interesting data from the US, where an eCommerce volume growth of over 16% is expected by 2022, reaching a value of 1.06 trillion dollars.
Globally, it is expected to reach 4 trillion dollars by 2027 (3.54 trillion euros) for B2C online sales alone, while B2B sales will reach 19 trillion dollars (16.83 trillion euros) by 2026.
With such a scenario, it’s clear that the best eCommerce opportunities come from sales in other countries, and this is what companies are aiming for to increase their catchment area and, therefore, their profits.
People who buy online are becoming more demanding, aware and sustainable
The audience of online consumers has expanded considerably, to include users of all ages and types. We can see that today, people who buy online have become more aware and demanding. Before finishing their purchase, they check offers in the various online shops and read reviews of the product, as well as reviews of the portal selling it. Something which is also essential to them before they complete their purchase is having certain guarantees, like being able to return the product in exchange for the total amount spent; expedited, traceable and, ideally free shipping; and being able to get assistance from someone from the selling company if there is a problem with the order. Attention to the sustainability of the product or the seller is also increasing – for 8 out of 10 consumers it affects their choice of whether or not to buy a product, and 6 out of 10 want to change their consumption habits to reduce their CO2 footprint.
eCommerce sales opportunities in other countries for companies
Obviously, by increasing the number of destination countries, the number of potential customers increases. Although it’s obvious that each market has its own peculiar characteristics and its own consumption habits, some products can be equally attractive to users who are geographically very distant from one another. So the opportunity to sell online to other countries represents a great chance to see the company’s profits grow, and opening up to new markets can provide inputs to improve one’s offer. In fact, interacting more with customers can provide important information to help improve the products or services offered. Carrying out periodic customer surveys helps to identify the strengths and weaknesses of your business, so that you can improve. Furthermore, selling on international markets allows retailers to plan and balance sales across multiple markets, distributing the risks and, if one of the markets experiences difficulty, to move towards more profitable markets, reducing the risk of unsold stock. In addition, by opening up to other markets, we may find that the best eCommerce opportunities come from foreign countries.
Challenges and news in cross-border eCommerce management in 2022
Deciding to open online sales to markets beyond national borders is something that can increase profits but, if it is not done with the right preparation, it can represent a risk for the company. First, it’s imperative that you know the rules and taxes of each individual country. Since 2021, changes have also been introduced within the countries of the European Union, including a new VAT regulation, without forgetting that now Brexit has come into force, the UK should be considered a non-EU country. Of course, the sale of cross-border online products is also subject to these provisions, just like brick-and-mortar stores. Also, from 1st January, the World Customs Organisation (WCO) has introduced major changes in the way importers and exporters have to assign HS codes to many of their products. 370 new codes have been introduced and 100 have been removed. If you don’t align with the new Harmonised System, which affects over 200 countries around the world, you’re at risk of having your package held up at customs for a long time. The speed of delivery and compliance with the established delivery date is an essential condition to retain a customer and ensure that they order from us again. Around the world, every day, about 3,248 parcels are shipped per second, and if you don’t want to risk getting lost in this large network or run into bureaucratic hitches or delivery delays, it’s essential to be able to count on a trusted and tested logistics network, or better still on warehouses located throughout the area of interest.
Should you open up your eCommerce to other countries or not?
In light of the issues mentioned above, there is no doubt: focusing on cross-border eCommerce is a choice that will allow your company to grow and your profits to increase significantly. As is easy to guess, by increasing the number of sales countries, not only does the number of customers increase, but so does the amount of bureaucracy and the number of rules which we need to be aware of, and failure to comply with which can lead us to incur significant penalties. There are really a lot of challenges faced by e-commerce companies, and many which await them, but this, however, shouldn’t make us give up, since it’s enough to be supported by professionals who are able to guide our actions and advise us on the best choice.