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Cross-border E-commerce North America
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Schedule a DemoCross-border E-commerce North America market report transcript
Regional Market Outlook on Cross-border E-commerce
The US cross-border e-commerce revenue is projected to reach $ 80 billion in 2018, with clothing and apparel being the most popular products. With this expanding market , client can expect service availability throughout 2018.
- The US cross-border e-commerce market recorded a revenue of $69.6 billion for 2017, with ~14.8 percent of growth rate compared to 2016. This trend is expected to continue for the year 2018 and the market size is expected to reach $80 billion
- Increase in the number of cross-border consumers is the major driver; approx. 52.9 million US consumers are cross-border buyers in 2017 and by 2020, this is expected to reach 68.6 million
- The US consumers prefer buying from China due to the price
Growth Drivers
With an expected increase in cross-border buyers (from 52.9 million in 2017 to 68.6 million in 2020), driven by m-commerce, product choice and cheaper price, client can expect an increase in cross-border shipments in 2018.
Mobile Commerce
- Presently in the US, mobile devices account for 19 percent of all US retail e-commerce sales. This is expected to increase by 27 percent by 2018
- Nearly half of the US consumers have made cross-border purchase in 2016, with a mobile penetration rate of 103.1 percent
- Due to the growth in mobile commerce, online purchases have become much more easier, thereby saving time
Price
- A country's cross -border merchandise correlates with its average price of goods
- The Price Level Index (PLI) expresses the price level of a given country relative to another. With higher PLI, there is higher opportunity for domestic shoppers to do cross-border shopping
- Currently, the PLI for US is 113 and US consumers mostly shop from UK, China and Canada, whose price level indices are 108, 59 and 107 respectively
Product choice
- Consumers shop from other borders because of the large availability of product choices, which is not available in their country
- Large domestic markets such as Germany, the US and UK, inhibit the need for shopping abroad
Market Challenges and Constraints
A major challenge the client could face in cross-border e-commerce shipments is logistics related issues such as shipping costs, long delivery time, import regulations, and return logistics. client should consider engaging with a supplier who will be able to offer a solution to overcome these challenges.
Shipping and Delivery Challenges
- International shipments include various costs such as border tolls, brokerage fees, duties, inspection fees, storage fees, tariffs and taxes
- As each country has its own set of regulations, it further introduces challenges in cross-border logistics
- With ease of convenience of e-commerce, consumers expect shorter delivery times, real time tracking, security on delivery, etc.
- Difficulty in dealing with reverse logistics, last mile delivery is also one of the major logistics issues with cross-border trade
Payment Issue
- The payment options preferred by the consumers vary based on the countries
- For example, in Japan, a local payment method named “Konbini” accounts for a sixth of e-commerce payments; on the other hand, Spain uses Visa, MasterCard, and American Express, while consumers in Asia prefer OD options
- Hence, accepting the payment options as per each country's requirement is a challenge
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