Cross-Border Ecommerce

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Introduction :

Ray: Hi Tammy and Hi everyone! Today, we’re going to talk about Cross-Border Ecommerce, but the basic one, a little information for everyone who wants to start their Ecommerce business.

Tammy : Yes Ray, that’s a nice topic, since a lot of people now are thinking of doing something online, this is a good introduction to Ecommerce.

Ray: Let’s start? 

Tammy : Sure, first, let’s explain to our listeners what Cross-Border Ecommerce is, but before you answer that, There are two kinds of online sellers in this world: those who sell within their nation’s or continent’s geographical boundaries, and those who don’t. If you’re thinking of exploring cross border ecommerce, then our topic for today might help you. So what is cross-border ecommerce, Ray?

What is Cross-Border Ecommerce?

Ray : Well, Cross-Borders Ecommerce is something that happens between different countries or involving people or businesses from different countries, when it comes to cross-borders ecommerce, the term generally refers to international trade. It entails the sales to purchase goods via online marketplaces across national borders. Buyers and sellers are not located in the same country and are often not ruled by the same jurisdictions, use different currencies, and speak different languages.

Tammy : So, Cross-Border Ecommerce refers to online trade between a business and a consumer, between two businesses, often brands or wholesalers or between two private persons. Cross border ecommerce is here to stay and needs to be considered accordingly as a growth strategy for an ecommerce business. To be successful, it also requires investment. 

Ray : They say that cross-border ecommerce is the future of ecommerce.

Tammy : Maybe because it gained huge momentum as customers purchase products from outside the borders. The last 2 years of ecommerce has seen distributed ecommerce.

Ray : Like buy buttons on certain social media like in Pinterest and Twitter where you can buy directly to the seller, and I think in some other countries that have their own social media marketplace.

Tammy : Yes! Conversational ecommerce is seen as a potential use case for customer service which involves the usage of technology to help with communication.

Ray : It is very important to have conversational ecommerce, so that potential buyers can reach you easily.

Tammy : And that is why I think cross border ecommerce has potential to be the future of ecommerce. And like any other ecommerce business, there’s pros and cons, what would be the advantage and disadvantage of Cross-Border Ecommerce?

What are the advantages and disadvantages of Cross-Border Ecommerce

Ray: Let’s say what are the Benefits and Risk of Cross-Border Ecommerce? Let me tell you first the benefits, of course for both sellers and buyers will have benefits for this. Seller both retails and brands can expand their business outside their often-saturated home market and tap into new markets. Selling abroad also offers the opportunity to seize the potential of different product ranges compared to the domestic market. 

Tammy : I see, so meaning it is also advantageous when it comes to international expansion and revenue. 

Ray : Yes, Tammy. As for buyers, they can also take advantage of a more competitive market, domestic players will improve their business strategies to remain competitive and buyers benefit from that.

Tammy : and based on my experience, sometimes buying from foreign website has a better price, and the availability of the products that are not available in the home market might be found in the foreign websites. 

Ray : For different countries has a different percentage of opportunities for Cross-Borders Ecommerce, take for example the SouthEast Asia –  it is the largest market of Internet users in the world. It thus makes complete sense that both Amazon and Alibaba have increased their interest in this area.

Tammy : Also in different parts of the UK – like France, The fastest growing e-commerce segment in France is cross-border purchases. Nearly half of all French consumers regularly buy from cross-border merchants and 19% of all online sales in 2016 were made on non-domestic websites.

Ray : I would also like to emphasize that cross border payments are not easy and should be managed to ensure that customers are not surprised by additional government levies when items arrive at their final destination.

Tammy : Yes, Understanding local taxation and ensuring that the customer pays accordingly is crucial otherwise the purchase will be returned and create an aggravated customer that will harm your business and brand, so if there is additional tax they have to indicate it also there. 

Ray : That’s right, Tammy, Each country has their own regulations when it comes to customs and how to clear them, and you can very quickly find yourself with a plenty of unhappy buyers if you don’t know customs regulations.

Tammy : Like here in the Philippines, customs will charge you from your international purchase if you exceed 10,000 pesos. So there’s maximum non chargeable tax. So they should be clear and indicate it on their site.

Ray : Also, there are risks that cross-border ecommerce sellers should watch out for. Like Fraud tactics. Cybercriminals are always testing new tactics. Current, common online fraud tactics include chargeback fraud, friendly fraud, account takeover and synthetic identity fraud.

Tammy : I see, so should really put security with their client’s personal data.

Why does online sellers should expand internationally

Ray : Correct, Tammy.

Tammy : Okay, so to have a bigger market or audience, it is better to expand your business internationally? What, specifically, does your ecommerce store have to gain from expanding internationally?

Ray: Well, first is that Increased Visibility for Your Brand. Any expansion is going to give your brand and your products more visibility.

Tammy : So once your brand is visible to the market, it will make it even easier to continue expanding in the future, if you wish to, I personally think that they should target their country they wish to expand their business.

Ray : Yes, also once you have expanded your business, it is more sales for your company and less competition – going international means you will actually have less competition.

Tammy : This is because a quality product that sells well will deflate competition at the local level?

Ray : Yes, let’s keep in mind that there will always be customers who prefer to buy from local vendors, but more international markets mean a greater global market share – and that will help drive the competition away.

Tammy : Okay, But you have to be prepared once you expand your business, your supply and demand should be well planned and prepared before expanding your business internationally, so that you can deliver well to your customers.

Ray : That’s right, Tammy. A well planned and prepared business is the road to a successful business. 

Tammy : That’s right, well, I hope our listeners can get some insights and ideas to this topic. To our listeners, if you decided to open an ecommerce business, feel free to message us at info@uniproasia.com for consultation or visit our website at www.uniproasia.com.

Ray : Thank you so much Tammy.

Tammy : Thanks Ray, bye!

Ray : Bye!

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