Report: 70% of Merchants See Profit from Cross-Border E-Commerce, Emerging Markets Key
Oct. 15, 2015
Seventy percent of global e-commerce experts agree that selling cross-border has proven to be profitable and a growing share of merchants are willing to focus on emerging markets to sell their goods, according to a new report from Payvision and CardNotPresent.com. In its third year, Key Business Drivers and Opportunities in Cross-Border E-Commerce , the largest B2B cross-border e-commerce survey in the world, found that fear of emerging markets—specifically China—is waning. The number of respondents who agreed that emerging markets are their primary focus when selling internationally grew from 31 percent in 2014 to 40 percent this year.
“Each year, more and merchants are focusing on cross-border trade,” said Rolf Visser, vice president of global marketing for Payvision. “Not only that, but Western merchants are more excited about doing business in China and other emerging markets, and are less intimidated by the cultural and localization complexities.”
Given that interest in China is increasing, the survey, for the first time, asked how the Free Trade Zone has affected e-commerce sales. Relatively few merchants have taken advantage of the FTZ so far, but nearly a quarter of respondents said it has considerably boosted their online sales into China while only 7 percent disagreed.
Another clear driver affecting cross-border e-commerce is the continued rise of mobile and omnichannel commerce. The report found the number of respondents who report seeing “explosive growth” in mobile commerce used in cross-border environments grew from 57 percent in 2014 to 79 percent this year. Mobile also beat out data breaches as the “biggest game changer” in cross-border e-commerce.
“The demand for mobile commerce and omnichannel retail has also grown remarkably since we first began sharing our research on this topic in 2013,” said Visser. “These trends correlate, because China has been offering end-to-end, omnichannel, in-app WeChat e-commerce for some time. Now, European and American merchants want to replicate these integrated customer experiences from marketplaces to stock handling, fulfilment and logistics. China is keen to collaborate with the West too, so it is having a profound effect on cross-border e-commerce overall.”
The research also spotted several other trends when comparing 2015 data to previous years. Sharing a language with the market they want to sell into is becoming less important to merchants. And surprisingly, while security breaches still hog the headlines, 57 percent of respondents agree that encryption, tokenization and other measures have made network intrusions less likely than they were two years ago.
“The ultimate promise of e-commerce is business without borders,” said Steven Casco, CEO of CardNotPresent.com. “In practice, while the upside is enormous, cross-border e-commerce can be daunting, but merchants are beginning to look past the difficulties to the opportunity provided by emerging markets. The results of this report show the culture, currency and technology differences that used to cause fear and hesitation are beginning to give way to recognition that merchants can unlock the value of untapped consumer bases.”