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Cross-Border Ecommerce

Remaining emerging regions would all experience rapid growth with domestic and cross-border at almost same pace, enjoying the maturity of borderless global commerce.

OVERVIEW

With the rapid advancement in Digital and logistics connectivity over the past decade, B2C e-Commerce is pacing its way to be a mainstream channel for retail. By 2020, over 2 billion e-shoppers, or 60 percent of target global population1, would be transacting 13.5 percent of their overall retail consumptions online, equivalent to a market value of US$3.4 trillion (Global B2C GMV, growing at CAGR of 13.5 percent from 2014 to 2020). Until now, B2C online transactions have been mainly domestic (supply and demand from the same nation); however, cross-border e-Commerce is taking over as the key growth engine to B2C trade, with a CAGR of 29.3 percent from 2014 to 2020.

Asia Pacific is leading the pack, not only in overall GMV, but also in volume growth of cross-border e-Commerce, contributing 53.6 percent of the incremental trade volume over the period of 2014 to 2020 (Figure 1). Western Europe and North America are trailing at 18.9 percent and 14.4 percent respectively; near-shore B2C transactions among EU countries is the driver behind a relatively high cross-border component in Western Europe. Remaining emerging regions would all experience rapid growth with domestic and cross-border at almost same pace, enjoying the maturity of borderless global commerce.

OPPORTUNITES AND CHALLENGES

Values Beyond Bargains:
For most shoppers who make online purchases domestically, besides convenience and variety of selections, bargains over conventional offline channels is the most important value driver—no doubt, online merchants achieve that by cutting-through layers of intermediaries. On the other hand, with cross-border e-Commerce, B2C consumers are seeking values beyond bargains, and they vary across different countries.

A Disrupted Market Landscape: 
Cross-border e-Commerce brings all market participants on an even level playing field. No longer are global consumers only assessable by those having resources to deal with complications of global distribution or costly market expansion. SMEs, especially those born Digital, are the new (micro-) multinationals in the game of e-Commerce. When all gears in the cross-border engine is well lubed, it is indifferent to the shopper whether the online purchase is domestic or cross-border. Cross-border online merchants could compete as effective with domestic offline merchants as they were on-shore. OEM manufacturers would have opportunity to market directly to end consumers, eliminating all wastage existed today in multi-tier distribution and retailing (e.g., supply-chain inefficiencies).

Challenges to Tackle: 
Despite of early success in cross-border e-Commerce as seen in number of markets, there are still barriers to be addressed in order for merchants to capture fully the promise of borderless global commerce. A study done by Accenture on the European cross-border e-Commerce market has unveiled impact of barriers related to market-entry, law and regulations, logistics, and localization.

CALL FOR ACTION


  1. Merchant Enterprises
    • Destination market-entry
    • Global operating model

  2. Service Enterprises
    • Industry ecosystem and platform business         
    • Private-Public cooperation

  3. Governments
    • Offline/online infrastructure
    • B2C inbound e-Commerce regime
    • SMEs and startups environment