Global Uncertainty Weighs on Cross-Border E-Commerce: Report

An uncertain geopolitical and global economic environment made e-commerce merchants a bit less daring in 2016 when looking outside their own borders, according to the results of new research from and Payvision. Each year since the survey began in 2013, a growing number of online merchants signaled their willingness to sell internationally and the belief that such activity was profitable. In 2016, however, uncertainty in Europe around the U.K.’s decision to leave the EU and an economic slowdown in China—the world’s largest and fastest-growing e-commerce market—resulted in flat growth in those categories. Given his unpredictability and protectionist campaign rhetoric, the election of Donald Trump as president of the United States in November will have only exacerbated merchants’ concerns about cross-border e-commerce.

The result, according to the annual Key Business Drivers and Opportunities in Cross-Border Ecommerce, is that merchants are concerned and did not expand their cross-border activities at the rate they had in previous years. Instead of targeting emerging markets, merchants concentrated more this year on consumers in countries with which they shared language and culture, which they considered less risky to sell to. Consumers, on the other hand, continue to look for the best products and the best price, no matter where in the world that takes them, according to Gijs op de Weegh, COO of Payvision.

“The omnichannel consumer mindset is quite the opposite of merchants’,” op de Weegh said. “Consider Alibaba’s Singles’ Day, the largest revenue-driving e-commerce day in the world. This year, it generated nearly $18 billion in sales in China, and almost a third of this was driven by foreign purchases. With a maturing set of millennial consumers, with more and more disposable income, the modern shopper is no longer domestic or cross-border, neither mobile nor in-store, they are everywhere.”

One thing that has not changed from previous years is the importance of mobile to cross-border e-commerce. For the fourth year in a row, respondents identified the growth of m-commerce as the “biggest game-changer” in cross-border e-commerce. This year, however, security gained ground. While nearly 25 percent of those polled identified mobile as the biggest game-changer, nearly 20 percent tabbed data breaches and increased fraud—the smallest gap in the history of the survey.