The internet has transformed the world into a global economy. eCommerce between countries has never been hotter. Buying and selling goods from all over the world can be as simple as clicking a few buttons. The world economy has been changed by globalization, which has formed a network through which goods move freely across borders. Every year, the sector expands by leaps and bounds, becoming a significant contributor to the global economy.
According to Statista, in 2020, over two billion people will have bought products or services online, with global e-commerce revenues exceeding 4.2 trillion dollars. The statistics also show that ecommerce revenues are projected to grow to 5.4 trillion US dollars in 2022. This estimated increase in the value of global eCommerce proves that the industry is here to stay.
Now, looking at the e-commerce industry through a ‘global lens’ , there are two types of sellers: those who sell within their country’s borders and those who don’t. Which one are you?
Now, let’s say that you are already doing pretty well on Amazon (or online in general) – should you go global? what do you have to do to expand your business globally? Should you consider a multi-channel approach? Which international marketplaces should you expand to next? Or what cross-border marketplace strategies you should adopt? If you’re thinking of exploring the possibilities of cross-border eCommerce, read on!
Global Selling Overview
Before we get into our research on selling cross border or on multiple marketplaces, let’s take a look at some facts about eCommerce global selling worldwide in 2021:
Cross-border represents 15% of the world’s eCommerce sales in 2016 and 22% in 2022 and is expected to grow at a compound annual growth rate of 27% by 2026.
Cross-border growth is 2x the rate of domestic eCommerce as shoppers can now access foreign eCommerce sites at any time, and we are now seeing 57% of shoppers make purchases from them. There are many reasons consumers would choose to purchase goods from another country. Some of the reasons are product ranging, flexible payment methods, cheaper prices, brand availability, and overall access to foreign or specific products.
Online marketplaces account for the largest share of online spending worldwide
Online marketplaces account for the majority of online purchases worldwide. According to a survey, digital marketplaces accounted for 47% of all online purchases. Retailer websites and apps came in second with a market share of 26%. Online marketplaces such as Amazon and eBay, accounted for almost half of the global online shopping orders. Amazon leads the global traffic ranking of online retail websites with over 5.2 billion unique visitors in June 2020.
The M-Commerce phenomenon: mobile phones are boosting eCommerce traffic
The use of mobile devices is one of the most visible trends in the world of ecommerce. According to Simicart, shopping from smartphones is expected to increase to more than 70% of all ecommerce transactions in 2021.
Source: The Drum
The COVID-19 pandemic continues to have a significant influence on eCommerce and consumption patterns
The coronavirus (COVID-19) pandemic continues to have a significant impact on global e-commerce and online consumer behaviour.
As millions of people stayed at home to prevent the spread of the virus in early 2020, digital channels have emerged as the most popular alternative to crowded stores and in-person shopping. In total, retail websites received nearly 22 billion visits in June 2020, an increase from 16.07 billion global visits in January 2020. The pandemic has amplified the consumer’s desire for convenience and immediacy.
What are the key takeaways?
The world of eCommerce is a constantly growing opportunity and in many ways is not restricted by borders for both seller and buyer. Technology such as apps, selling tools, smartphones, robotic warehouses, financial services, and 5G are contributing to an ever-increasing level of cross-border e-commerce activity.
Shopping habits have been shifting away from physical retail and toward e-commerce for some time, but COVID-19 causing endless lockdowns has pushed shoppers to shop online. As the coronavirus spread, shoppers and sellers have started to engage in transactions outside of their home country.
For sellers specifically, this global shopping/selling phenomenon shows multi-channel cross-border expansion has never been more relevant (or easy) and that there is a real opportunity to sell products to new markets, increase revenues and create a truly global brand.
At MerchantSpring we often see our users expand their global footprint across the Amazon marketplace network (or similar) after building a strong foundation in their immediate location.
Cross Border Selling Activity: Utilising Marketplaces to Expand Businesses Globally
As previously mentioned, marketplaces are in the driver’s seat when it comes to generating strong sales results, product range, advertising, and brand strategy. They are the base for any successful ecommerce brand. However, it’s multi-marketplace and cross-border selling that we see our users at MerchantSpring taking advantage of.
With the number of marketplaces continually rising in a lot of countries, the opportunity to explore new markets and reach new customers through global networks (Amazon is a great platform for this) is one of the most effective ways to sell your products internationally online.
Why is this so? Well, over the past few months we have had 100’s of conversations with sellers, marketplaces, and service providers, and put simply, we learned a lot.
At the core of all this is marketplace infrastructure, having spoken in great detail with global marketplaces like OnBuy, Rakuten, Cdiscount, Lazada, Shopee, Walmart, and more we learned that they are all putting together (or already have) a global technology infrastructure which includes tools such as unified selling accounts, cross-region listing and native fulfillment services to make cross border selling as simple as possible.
As a specific example, Cdiscount in France has Cdiscount Fulfillment which allows sellers to use their warehouses (much like FBA), Lazada in South East Asia provides sellers with access to their Global Selling Platform, which allows sellers to easily sell across all Lazada regions through one account (similar to the Amazon Global Selling Program). Arguably this is something Amazon already does, but the fact we are now seeing these sorts of tools and features provided natively to sellers on other marketplaces makes it easier than ever to expand to other channels and geographies.
This map shows the top marketplaces all across the world and interestingly 54 out of 100 of those marketplaces didn’t exist just a few years ago.
According to Statista, Europe appears to be the epicentre of cross-border sales, which perhaps can be attributed to the Eurozone. Selling in Europe provides you with access to a lot of different countries, allowing you to bring products to less saturated markets, meet international demand, and increase your brand awareness.
It is worth noting that Europe also has a lot of marketplaces available for customers and sellers, reporting 63 different marketplace sites.
According to Webretailer, in Europe, Amazon remains the leading online marketplace with 1.1 billion visits per month; whereas, eBay comes second –with only 35% of Amazon’s European traffic. Following the top two marketplaces, European traffic rapidly drops off, with Allegro and Zalando receiving 202 and 111 million visits, respectively.
How many sellers on those marketplaces are local and how many are based overseas?
If we take a look at the figure above, we can see marketplaces in Europe have been penetrated by third-party foreign sellers. Based on population, it’s easy to see how it can be appealing, simply selling in Germany, France, Spain, Italy, and The Netherlands theoretically grants you an audience of nearly 271 million people.
All of these people – your future buyers – could be reached simply by expanding to and selling on European marketplaces.
If we take a look at the other side of the globe, we see even higher proportions of foreign sellers with Australia having the highest proportion of foreign sellers compared to local sellers.
On face value, it is easy to assume that similarities between English-speaking markets may make it seem like an easy expansion opportunity. But sellers must be aware of the complexities such as currencies, payment/settlement requirements, tax, and duties to name a few.
So where else do Amazon Sellers Sell?
A recent 2021 report on the state of the Amazon seller finds that many sellers operate in multiple global marketplaces simultaneously with:
- More than half (54%) of Amazon sellers sell on several platforms
- 32% of marketplace sellers in the United States also trade in Canada, and 16% in Mexico
- About half of U.K.-based Amazon sellers also operate in neighbouring German and French marketplaces
- 39% of Amazon sellers are considering selling on Walmart in 2021.
This proves that not only is multi-channel selling possible, it’s happening right now. As a seller, you can list your products on all of Amazon’s marketplaces in the US, Asia-Pacific, Middle East, and Europe with the Amazon Global Selling program.
Amazon currently has 20 marketplaces— 20 opportunities to grow your businesses. No matter where you are located, once you’ve signed up for Amazon Global Selling and FBA, you can have Amazon handle all shipping, returns, and refunds, as well as product warehousing in Amazon’s warehouses for picking, packing, and delivery.
Amazon is a flexible (but no longer unique) platform for online sellers when it comes to selling in multiple regions. Platforms like Lazada, Cdiscount, and even Walmart have the same or even better infrastructure that can help you get selling from anywhere.
So, here comes our shameless plug, if you are selling (or intending to sell) on multiple channels globally and are worried about the visibility of everything going on. Don’t worry, MerchantSpring Marketplace Manager lets you see 100+ marketplaces in one easy-to-use global dashboard.
What about other marketplaces?
In terms of Amazon sellers, the expansion opportunity is not always domestic and not always restricted to Amazon. Sellers don’t always pick marketplaces within their home country and we refer to this business model as multichannel marketplace selling whereby a merchant sells their products through several different channels.
As third-party sellers become more competent selling on Amazon’s marketplace, many want to or need to expand to other platforms, such as Walmart (39% of Amazon sellers are thinking about it) and many more.
Intelligence platform Feedvisor asked US Amazon marketplace sellers what would be their business goals for the year. Although expanding an existing product line was the most popular response, more than a third (35%) said they wanted to diversify to other platforms, which was a substantially higher percentage than those who wanted to launch their own eCommerce website (12%). Again proving that multichannel selling is on the roadmap for many eCommerce sellers.
There are plenty of marketplaces to choose from and making a decision will require some testing before you begin multichannel selling. It’s important to plan; you don’t want to add to your workload by selecting a marketplace that isn’t a good fit for your items.
Once you decide which marketplaces you want to expand your business to, you can utilise our Marketplace Management Tool to simplify the process of tracking profit, sales, ad spend and more without having to log in to several different platforms. Our platform covers over 100 marketplaces around the world.
The Numbers Speak for Themselves
Cross-border selling is changing how you run your business. (like Merchant Spring) are fighting to make it easier and easier for you to sell to everyone, everywhere from anywhere.
Client Success Manager,