How Is the Cross-border eCommerce Landscape Evolving?

POSTED BY Nick Maynard

The Role of Mobile Devices in Growing eCommerce in Developing Regions

Online marketplaces offer a way for shoppers to browse a wide range of items on a single site at competitive prices. They have been a major driver in the growth of cross-border eCommerce in recent years.

Marketplaces charge monthly costs as well as a commission on sales, which varies according to product category and/or volume of sales. In developing markets, online marketplaces are often mobile based, as mobile penetration is increasing rapidly and shoppers in these markets are less likely to own or use a desktop or laptop computer. In these markets, online marketplaces are seeing strong success and rapid growth as a result of broad product availability and competitive pricing.

What Regulatory Challenges Do eCommerce Merchants Need to Navigate? 

Expanding digital sales channels to new countries and regions can create challenges for brands and merchants wishing to implement an effective cross-border eCommerce strategy in terms of effectively navigating the different regulatory requirements and laws in place in different countries. These can introduce uncertainty around issues such as taxes and tariffs, legal frameworks and limitations of sale. Some of the regulations around payments alone include:
  • Data privacy – regulations with regard to the handling of customers’ personal data.
  • Payment regulations – for example, PSD2 (the updated EU Payment Services Directive) and SCA (Strong Customer Authentication), which apply to online payments processed in the EEA (European Economic Area).
  • PCI DSS (Payment Card Industry Data Security Standard) is a set of security standards that stipulate that all companies that accept, process, store or transmit credit card information maintain a secure environment.
  • Card brand adoption deadlines.
  • EMV Secure Remote Commerce Specifications.
  • Being able to offer multi-currency pricing and local payment options.
The Growing Importance of Buy Now Pay Later

With the growth of eCommerce and mobile penetration across the globe, digital BNPL offers are gaining ground versus other methods of payment, such as cash and credit cards. Better accessibility and frictionless customer experience are the two key drivers of BNPL growth, therefore, it is forecast to cannibalise more of the digital payments market share, as Internet usage and mobile penetration increase. It will thus play an important role in improving the cross-border shopping experience.

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► Cross-border eCommerce Market Research

Our latest research found:
  • The value of cross-border eCommerce will exceed $2.1 trillion in 2023, from $1.9 trillion in 2022.
  • This growth of over 13% in a single year reflects the increasing success of marketplaces which offer goods across borders, as well as the rising viability of cross-border sales as an eCommerce model.
  • As eCommerce models diversify, including models such as buy now pay later and click and collect, cross-border options must also keep pace, by agreeing local distribution and payment partnerships.
  • The marketplace model, where large vendors sell goods to users on behalf of cross-border vendors, represents an easy way to access a large audience, while ensuring that accepting payments and other logistical issues are seamlessly handled.
  • Physical goods will account for over 97% of cross-border eCommerce spend in 2023, with digital goods making up the remainder.
  • It identified the maturity of cross‑border export of physical goods as a business model as a major factor in this difference, as well as increasingly cost‑conscious end users.