A short history of cross-border commerce and how to navigate it
The development of cross-border commerce has led to huge technological advancements in the business sector and created a new digital age of endless possibility. The individual can now purchase products and services from an ever-growing pool of companies, and brands and businesses can expand their visibility in new and untapped markets.
Cross-border commerce is the process of selling goods in international countries. Its sales aren’t limited to a potential retailer or consumer; cross-border commerce can, and does, take place between two businesses.
As development in technology makes other countries and their markets more accessible, the value of cross-border commerce continues to rise, proving popular with businesses in all kinds of sectors.
A Short History of Cross-Border Commerce
The landscape of business changed forever in1994 when Jeff Bezos founded Amazon in Seattle, Washington, USA. The innovation of this platform – a 24/7, international, cross-border shopping experience – facilitated technological advancement that continues to improve competition between sellers and increases consumer demand.
The launch of Amazon caused a historic boom in international trade. To follow suit, businesses had to consider ways to improve and advance in localization, logistics, and payment options. Ecommerce platforms such as Magento were launched, giving users access to unique features that would build relationships with their customers and boost their sales.
Cross-border commerce understood the need for accessibility; a consumer’s ability to purchase products easily and within minutes from mobile devices changed online sales by reaching an entirely new customer category. Smartphones unlocked the door of ecommerce in the Middle East and Africa, which are small but growing markets for foreign products.
The potential for cross-border commerce is limitless as consumers switch to online shopping. Due to the COVID-19 pandemic, the growth of ecommerce platforms has substantially risen; for example, Amazon’s international sales increased by 28.3%.
Here in the US, around 27% of interviewed consumers said they prefer to shop domestically and internationally. To illustrate the potential worth of cross-border commerce, we’ll consider China. Their cross-border commerce is worth at least $60 billion and will likely increase as the international consumer culture shifts to one of digitisation.
How to Navigate International Expansion
It’s good business sense to want to tap into the mine that is cross-border commerce, but, as with all business decisions, it’s unwise to jump right in without having a firm plan for expansion.
Do your research. You need to know the ins and outs of the country you’re hoping to grow your business in and with online information at your fingertips there’s no excuse to not fully understand the key dynamics of a country’s business market. You’ll need to understand tax laws, trade rules, regulations, payment methods and any cultural norms before you delve into trying to sell.
Don’t bite off more you can chew by choosing multiple countries in multiple locations with the hope of expanding as quickly as possible. As Steve Jobs stated: ‘Do not try to do everything. Do one thing well.’ Target one market and target it well.
Choosing the right platform to handle a cross-border commerce strategy is hugely important. This platform is going to be the backbone of your success and you want to ensure that it’s dependable, efficient and an expert in its field.
Conduct Research Before Embarking on Multi-Country Commerce
To successfully serve international markets, you need to be armed with market insights that can help you provide frictionless service. Know what you’re hoping to achieve and what strategies you plan to implement that best optimise your internal teams.
Consider what your brand needs to know, keeping the criteria as brief as possible. The more open-ended your research the less likely you can draw tight, solid conclusions to support your expansion plan.
Be open to help. The infrastructure of a new country’s business sector may seem completely alien to you and you shouldn’t blindly stab in the dark to develop cross-border commerce. Instead, invest in professional knowledge and expert platforms to guide your decisions.
Cross-border commerce means tailoring your product or service to a new local audience, and it is easier than you think to miss the mark due to multiple and inconclusive research findings. Remember, each country is unique and will require different methodology.
As with any aspect of a good business plan, strive for clarity, for well-informed research into the social and financial implications of your decisions and ensure that the platform you’re using can support and sustain your cross-border commerce journey.
