TRD Issue 47 - Insight: How to Achieving Success in Cross-Border E-commerce

Hello subscribers,

Imagine you're searching for a high-quality, eco-friendly yoga mat – a surprisingly scarce product in your local stores. You've browsed through numerous shops, but they either don't have what you're looking for, or the quality just doesn't meet your standards. Just as you're about to settle for a less-than-ideal option, you decide to take your search global.

A quick online search leads you to a store in Australia known for its sustainable and premium fitness products. With a few simple clicks, you place your order. In less than a week, a package arrives at your doorstep from halfway across the world, containing the perfect yoga mat you've been seeking.

This convenience and global reach are the hallmarks of cross-border e-commerce. It's not just about shopping; it's a testament to how e-commerce has bridged the gap between consumers and international markets, making what once seemed impossible possible.

In this issue, we will dig deeper into cross-border e-commerce, including the advantages and challenges and the importance of localization. Happy reading!

The Retail Direct

About 91APP

Founded in 2013, 91APP is the premier OMO (online-merge-offline) SaaS company, providing one-stop omnichannel retail solutions in Taiwan, Hong Kong, and Malaysia. It offers advanced Commerce Solutions and Marketing Solutions that enable retail brands to penetrate the D2C (Direct-to-Consumer) e-commerce market and drive their operational benefits to their full potential. In 2021, 91APP became the first SaaS company to be listed in Taiwan and has been named one of Taiwan's "NEXT BIG" companies by Startup Island TAIWAN.

For more information about 91APP (TWO: 6741), visit www.91app.com.

Introduction

The pandemic has brought about significant changes in how businesses operate, and embracing digital channels has become more important than ever before. 

According to a study by Statista, cross-border e-commerce is projected to account for 22% of all e-commerce shipments, which amounts to over $3.5 trillion in the year 2022. This represents a significant shift in the industry, indicating that cross-border e-commerce is no longer an option but a necessary strategy for businesses to stand out in the global market. Companies can gain a competitive edge by opting for this approach. After all, if they don't, their competitors surely will.

In the past, only big multinational corporations could engage in cross-border e-commerce. However, things have changed, and now it's open to all kinds of online businesses, whether you're a startup or an established player. This shift is due to technological advancements, changing consumer habits, and the growing ease of global logistics.

Expanding your business beyond borders is smart in today's digital age. It's not just about reaching new customers but also about staying ahead of the competition. The potential of cross-border e-commerce is too great to ignore, and it's a strategic advantage that can help your business grow and engage with customers in new and exciting ways. As domestic markets become more saturated, international expansion is a promising frontier for business growth, innovation, and customer engagement.

The Advantages of Cross-Border E-commerce

1. Expanding Market Reach

Cross-border e-commerce allows businesses to access new and diverse markets, expanding their customer base globally. By catering to varying consumer demographics, companies can test product viability across cultures, explore new market segments, and build a more adaptable brand.

2. Boosting Sales and Profits

Cross-border e-commerce allows businesses to expand sales and profit margins by reaching new markets with high demand and less competition. Over 80% of e-commerce retailers worldwide find cross-border selling profitable, as it opens doors to fresh customer bases and lets businesses optimize pricing strategies based on market dynamics.

3. Enhancing Brand Visibility and Competitive Edge

Going global boosts brand exposure, trust, and long-term success. Entering new markets gives brands a first-mover advantage to establish themselves as leaders and set the industry standard. This is vital as brand recognition and loyalty drive business success in the fast-paced digital world.

4. Clear Unique Selling Proposition (USP)

To succeed as a new player in your target market, differentiate yourself from the competition by defining your product's unique features and benefits. A USP is crucial to help your customers distinguish your offering and make informed decisions before investing their time, money, and trust.

5. A Scalable and Internationalized Website

Optimizing your website’s speed and ensuring it can handle a higher traffic volume is vital to improving your cross-border business. Additionally, consider supporting multiple languages, currencies, and local payment options to boost conversions. These small details can make a big difference in retaining customers and improving your website's search engine optimization.

Navigating Challenges in Cross-Border E-commerce

1. Tax and Exchange Rate Complexities

Cross-border e-commerce presents numerous challenges, such as complex tax regulations, fluctuating exchange rates, and compliance issues. These challenges impact pricing and profitability and can jeopardize customer trust if not appropriately managed. Therefore, staying informed and up-to-date on changing laws and regulations is crucial to ensure compliance and avoid legal issues. 

2. Cross-Border Payments

With different payment methods and banking systems across countries, businesses must implement robust security measures, like address verification systems, to safeguard against fraud. This protects the company's interests and builds customer confidence in the brand.

3. International Shipping

Shipping products internationally can be challenging due to varying import and export rules across countries. You may need to partner with a logistics service to ship to your target countries. Consistent and predictable logistics are essential for successful cross-border e-commerce. Working with a local carrier can be beneficial for speedy deliveries. 

When it comes to shipping, choosing the right method can make a big difference in cost and pricing. Sometimes, shipping costs for a particular item may be too high, prompting you to explore selling other products internationally instead.

4. Addressing Hidden Costs for Consumers

Businesses must also be mindful of hidden costs affecting customers' purchase experience. These can include additional charges due to currency conversion, shipping, and handling, which, if not communicated clearly, can lead to customer dissatisfaction. Transparency in pricing and fees is critical to building trust with international customers.

5. Customer Service

As your business lacks a physical presence in the country, it's vital to establish trust by delivering top-notch customer service. Consider implementing effective customer service processes by hiring dedicated teams to handle support requests in your customers' languages or outsourcing to specialist agencies.

Localization Can Help with Cross-Border E-commerce

E-commerce localization should be high on your priority list when selling cross-border. It involves tailoring your online shopping experience - from your website and app to your customer service and marketing strategies - to the specific cultural preferences of your target market. Doing so can improve customer engagement, increase sales, and build a loyal customer base in different parts of the world.

E-commerce localization includes:

• Content localization
• UI localization
• UX localization — such as adapting payment methods, shipping options, and more
• Customer service localization — offering support in local languages
• Marketing localization

Your e-commerce technology provider typically handles the localization of UI and UX and offers localization tools that allow your team to manage content in different languages, including product and category names, product descriptions, and custom links. This ensures that your website is accessible and appealing to customers from around the globe, helping to expand your business and increase revenue.

Leveraging AI for Localization

One way to streamline the localization process is by using AI-powered tools like ChatGPT. AI can help translate product and category names and product descriptions and even write marketing content, making it easier for businesses to reach a wider audience.

Furthermore, AI can also assist in identifying the cultural nuances that may impact the effectiveness of marketing messages, ensuring that they resonate with the target audience. Utilizing AI for e-commerce localization can help businesses save time, reduce costs, and improve their global expansion efforts.

Provide Locally Relevant Information

To cater to the needs and preferences of shoppers in various countries, offering them product information relevant to their location is crucial. This information should cover product specifications, availability, reviews, and more.

In addition, it would be highly beneficial to create localized marketing materials, such as product review videos in different languages or tailored to the cultural nuances of other countries. Also, local holidays are an excellent time for promotions, and you can consider using locally recognizable landmarks or people in images to boost engagement.

Conclusion: Embracing the Future of Cross-Border E-commerce

If you plan to expand your e-commerce business globally, always research and plan accordingly before launching your online store overseas. 

One of the first things to consider is whether there is overseas demand for your products. You should also analyze how you will ship your products internationally, including any restrictions or regulations you must comply with. 

Finally, excellent customer service is essential for building trust with international customers. With proper preparation, cross-border e-commerce can be a lucrative opportunity for your business.

In conclusion, cross-border e-commerce is not just a passing trend but a fundamental shift in how businesses operate and compete in the digital age. By embracing this shift, companies can unlock new markets, engage with a broader audience, and set new standards in the global e-commerce landscape. The future is cross-border, and the time to act is now.