Cross Border eCommerce: The Future of Online Sales

February 25, 2021

This pandemic that we are facing is transforming the way we consume and how we relate to the online environment. With the restrictions, the fear of contamination and potentially more free time at home, in the last year people have bought more on the Internet and discovered new websites. More than ever, digital has erased borders and given companies new business opportunities.

Why do we predict such a bright future for it?

According to a Google survey, in the post-covid era 33% of Spanish users who buy online did purchase products on websites they had never visited before; and across Europe 71% of users did purchase products coming from abroad.

It is a reality, e-commerce in Spain has increased in 2020 the equivalent of the last 5 years (until reaching 11% of total sales according to eMarketer). Cross Border e-commerce already accounts for 21% of the market; and following the trend, 26% of Spanish companies plan to invest in their export capacity to access a wider market!

What benefits and opportunities does it mean?

Traditionally, Cross Border e-commerce increases visibility, web traffic, brand awareness and sales volume. And now with the global health crisis and the pace of economic recovery in each market, it makes even more sense. Northern European countries or China - where 38% of our online purchases come from - have recovered more quickly from the pandemic than Spain or Portugal and the potential for e-shop income from these countries is therefore much higher.

What challenges does it create?

Digital internationalisation has become an essential growth strategy that is within the reach of every retailer who sells online; however, doing it successfully is complex and decision makers often experience it as an exciting but risky brainteaser. We all know that the more the digital experience is adapted to the profile of the local consumer, the more they feel "at home", the greater the conversion; but the issue goes much further.

First, mandatory measures and actions must be taken to comply and avoid additional costs; and each country has its own culture, its own fiscal and legal regulations, procedures, tools and languages. Thus, you have to understand local taxes and manage the multiple VAT positions; manage payment methods - taking into account that lately new alternatives are born every year - and manage transactions; secure refunds and returns; solve management problems that may otherwise expose the company to great risks and fees.

In addition, logistics and reverse logistics is a literally key challenge since it can very negatively affect the perception of the business. And fraud protection is another one.

How to implement Cross Border e-commerce to make the most of it?

To manage Cross Border e-commerce, companies can opt for insourcing or outsourcing. Although it may seem simpler at first, managing it directly requires financial resources and time to deal with a multitude of partners and legal and tax consultants. That is why there are also highly valid external solutions. Some agencies act as a commercial entity by bridging the brand and its end customer, managing transactions on both sides, putting all legal and tax services under one roof and simplifying the entire process. This is the case of Go Global Ecommerce, for example, a service provider that allows its clients to save time, money and effort while increasing their global turnover.

In summary, the evolution of the digital world is constant and the transformation of e-commerce a reality accelerated by the health crisis that we are experiencing. Rapid change and deep innovation are increasingly complex… and Cross Border e-commerce is here to stay. To break boundaries and succeed, it is better to be well prepared and backed up!

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