What is Cross-border Ecommerce?

General-FAQ| 2 min read
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 1. What is cross-border ecommerce?

As the name suggests, cross-border ecommerce is the process of selling products or services to an international audience, using an online or ecommerce store or platform.

While cross-border ecommerce is specific to online sales, there is also another process called cross-border commerce, which refers to selling overseas to an international audience via any sales channel, online or offline.


2. Who is cross-border ecommerce for? (The three Xs)

Cross-border ecommerce can be used by any seller looking to:

  • Expand their business

  • Explore new markets and buying trends

  • Export what they offer and reach a bigger audience


3. How has cross-border ecommerce grown over the years?

Over the years, as ecommerce has become more popular, cross-border ecommerce has also seen a prominent growth:

  • According to a survey by Statista, cross-border ecommerce was responsible for 15% of global ecommerce shipments in 2016, and it’s been expected to reach 22% in 2022. 

  • A report by All The Research says that in 2019, the global cross-border ecommerce market was estimated to be worth USD 578.57 billion, and is expected to reach USD 2,248.57 billion by 2026, with an increased CAGR of 17.4%.

  • Another report by Zion Research states that cross-border B2C ecommerce in specific will reach USD 4,856.1 billion by 2027, from USD 562.1 billion in 2018.


4. Why should you consider cross-border ecommerce?

  • The biggest benefit to using cross-border ecommerce is that you can expand your business internationally, to receive exposure from global markets and audiences. This will also help you grow your brand’s popularity.

  • With a bigger audience, the number of customers and potential customers your business has will begin to grow, which can cause a hike in demand and customer orders. This will improve your revenue. 

  • In some cases, products that are lower in demand within a domestic markethave been found to be more popular across borders. For this reason, cross-border ecommerce can improve your chances of selling slow-moving or dead stock.


5. What are the challenges of cross-border ecommerce?

  • Payment fraud

The most common mode of payment used during cross-border ecommerce transactions is credit cards. In order to curb credit card fraud, most online sellers enable AVSs or address verification systems, which authorize credit cards used by buyers. While this does reduce the chances of payment frauds, it however doesn’t accept customers from countries where AVS does not operate.

  • Shipping complications

While shipping within the country, most taxes and laws are the same, so the entire process is relatively straightforward. However, when shipping across borders, it becomes more challenging, as new taxes, laws, and import and export rules are added to the picture. A few instances of these setbacks include:

➤ Sometimes, the total cost of shipping a product to an international buyer is much too high to make the transaction profitable for the business.

➤ Other times, certain products may be illegal in other countries, which prohibits the transaction from happening.

  • Language and currency differences

In order for an ecommerce seller to support international users, their website should be able to support international languages as well as currencies. However, since they can’t support all languages and currencies, they will have to stick to a limited number. This poses a challenge for customers from countries whose language and currency aren’t supported, as they won’t be able to make purchases.

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