Sky is hardly the limit for cross-border ecommerce, it will grow by leaps and bounds

Sky is hardly the limit for cross-border ecommerce, it will grow by leaps and boundsCross-border ecommerce that comes with immense growth potential is the new buzzword that is ticking the world. While it could be said that globalization was the early cousin of expansion of businesses and markets through trade and commerce, ecommerce has a pretty straight forward goal.

Business growth through international expansion is said to be the only goal that has been set for the growth of ecommerce across international commerce in other words.

According to economists, cross-border ecommerce now accounts to over 25% of global commerce sales. Emerging markets have shown great potential and appetite favoring the growth of ecommerce.

When it comes to projecting the growth data, the global B2C cross-border ecommerce is said to expand to the size of $1 trillion by as early as 2020. The sector did about $234 bn in 2014.

Cross-border online shopping is making great gains in emerging markets. China-based Alibaba group’s has been a pioneer in this regard since it curates and hosts merchants from across the world.


China is pitted to become the largest cross-border B2C market by 2020, if not earlier. A report put together by Accenture AliResearch, China stands right on the forefront of this new sector that is already showing strong signs of booming in the years to come.

The reasons for this are many. Chinese population, which is predominantly middleclass, is about the size of entire population of USA. The numbers will soon reach a good 630 million by 2020. This segment has been developing immense appetite for good-quality foreign products. By the end of this decade, the report predicts, over 200 million Chinese consumers will be shopping across borders pretty much to the same extent as they buy from local stores.

Web will become the major medium of shopping for over 900 million consumers by 2020 from across nations. And the potential for further growth looks huge with the global cross-border B2C market clocking a compound annual growth of 27.4% from 2014 to 2020.

As far as the next largest market such as India is concerned, the numbers predict a massive growth in this country too. Online shoppers in India are expected to spend Rs 54,000 crore in order to buy products from other countries. By the end of 2016, the number will increase by 75%, say the experts.

The average cross-border spend is estimated at $3.8 million, making it a notch higher than domestic online shopping spends. Out of 10 million online shoppers in India, nearly 40% shop across borders. Global retailers with online presence will reap large benefits out of this emerging market space.

However, the path is not all that rosy when it comes to carving out a smooth track for cross border ecommerce. Challenges and issues that have to be streamlined have already begun to show with experts and policy makers working on ways of addressing them.

Regulatory issues across nations, tax structures, payment methods and processing mechanisms, logistics that largely create a local dependency to execute the orders efficiently, consumer related issues and laws to address them both at the point of origin and delivery – all constitute to the big picture that needs t be addressed.

Multi-fanged approach that is needed to work in tandem to create a smooth road for cross border ecommerce to succeed has to be worked on to the last detail in order to put both businesses and consumers on profit mode.

Regulatory issues, promises to consumers over delivery and post-delivery services will play a major role in this sector. Apart from selling products, developing local partners to do the follow up activities, will also mean the businesses will have to pay great attention to the last detail. Local courts and policies against consumer grievances – all this would have a great impact on the growth and potential of this market.

Legal hurdles would be many in case of selling products. For instance, there have been cases of pharma companies and online trader platforms having faced the music in domestic markets for selling drugs online, which is against law in countries such as India.

Payment methods and processing of the orders with minimal hassle and in complete confidence as well as safety, is something the businesses will have to pay attention to. Will this work as a single gateway, or will this bypass the local governments since the platform has its origins internationally, would be a debatable aspect. Because, preferred payment methods vary across the world and things would work differently from one country to another.

As of now, credit cards are a truly universal method of payment. Hence, it would be rather interesting to see if the wings developed by businesses, will help them change the way world views money, and pays for products.

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