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Cross Border eCommerce: all you need to know

Cross-Border eCommerce: what you need to know

Online shopping has been sweeping the world in recent years. Now, the industry of eCommerce is bigger than ever. In fact, eCommerce has penetrated through international borders.

Many businesses are keen to expand into new regions now that global eCommerce is the new norm. COVID-19’s blend of technological advancements, digitalization, social distancing, and evolving buying habits paved the way for the industry to flourish. There’s no denying that Cross-Border eCommerce systems are now widespread.

But what more should you know about Cross-Border eCommerce? In this article, you will learn the following:

And without further ado, let’s get started!

What is Cross-Border eCommerce?

Cross-border eCommerce means buying from stores and brands outside one’s own nation. Due to ease, buyers may not realize they are buying from a distant country from their living room. 

Unrestricted access to your favorite stores worldwide is excellent for consumers. But for sellers, it means formulating marketing strategies to reach and engage with potential customers around the globe. However, climbing figures in the Cross-Border eCommerce industry will surely be worth the struggle.

In fact, according to Statista, international eCommerce sales are expected to reach 22% of overall online purchases by 2022. This is based on the continuous data trend that started at only 15% in 2016.

Cross-Border eCommerce is expected to increase at a 27% CAGR from 2021 to 2027, reaching $4.8 billion in 2026. It’s still the case, notwithstanding a modest drop in global retail expenditure.

It is excellent news as the eCommerce business grows. But Cross-Border eCommerce business strategies can push them ahead in revenue. We will discuss them later in the article.

Regulations for Cross-Border eCommerce

1. EU eCommerce cross border regulations

EU’s new customs regulations for Cross-Border eCommerce are still in place a year and a half later. Import duties are a significant part of customs laws.

Administrative burdens will raise prices for consumers. Businesses must be cautious or risk losing clients and paying too much VAT.

Regardless of where you live in the European Union, you may now purchase online safely and quickly.

The European Union has focused on the following regulations to maximize eCommerce’s benefits:

  • Payment Services Directive and existing laws on cross-border package transportation service
  • Regulation changes to avoid unjustifiable geo-blocking
  • Consumer protection laws have been updated
  • Online sales of goods and services are now subject to new VAT guidelines

2. China eCommerce Cross Border Regulations

Some of China‘s most significant new eCommerce regulations include:

  • A new regulatory framework will regulate Cross-Border eCommerce in China. It will consist of taxation inspections and quarantine, customs clearance, and payment methods.
  • The threshold for tax-free cross-border purchases has been raised. Transaction in a single transaction costs 5,000 RMB, while the annual cap is 26,000 RMB. Import duties will not be applied to purchases made within these limitations. It’s also worth nothing that import VAT and consumption tax will be collected at a reduced rate of 70%.
  • It is illegal to sell goods in China using Daigou (that is a purchase outside China for someone living in China).
  • Consumer rights will be better protected on domestic websites.
  • eCommerce platforms must protect intellectual property and respond if a violation is reported. Failure to reply will result in substantial fines for companies. To protect intellectual property, the State Administration will need a company license.
  • Non-traditional purchase channels must comply, including social media, WeChat, and others.
  • The new regulations won’t only affect platform owners and operators. It also includes domestic commerce and micro-businesses.

Engage a respected Shanghai eCommerce agency to guarantee cross-border compliance. 

How to prepare your store to Cross-Border eCommerce?

Cross-border e-commerce market research

1. Research on the Needs of the Local Community

To compete in international eCommerce, companies must understand customer buying behaviors. Customers have a wide range of values and buying patterns on the internet.

Their cross-border clientele must know what sells and what doesn’t. They should also stay up to date about consumers’ expectations.

For instance, if you want to leverage cross-border diamond platforms, explore local requirements first. Evidently, when you meet customers’ needs, they will be more interested to explore the collections.

There is no assurance that a buyer will buy your diamond jewelry collection, even if it is unique. Cross-Border eCommerce companies prepare for local competition by researching local demand.

2. Observe the regional regulations in each country

As part of a complete eCommerce strategy, you must follow local legislation. Certain things can’t be sent inside the boundaries of certain nations. It is unlawful in Australia to import plants, plant material, or soil. On the other hand, smoked salmon cannot be exported from Egypt.

Cultural and language barriers may also impede your business abroad. People in Asia, for example, like to communicate with companies through social media.

Second, keep an eye out for shipping-related taxation. In certain countries, customs may hold items until the customer pays VAT. Others support legislation requiring firms to collect tax at the point of sale.

Make sales taxes clear to consumers while considering payments and currencies.

3. Take a Look at Your Overseas Rivals

Cross-border eCommerce businesses must study international competition. They need it to establish a market strategy and understand their opponent’s marketing mind. To optimize market entry, companies must examine cross-border pricing, marketing tactics, and keywords.

4. Recognize Potential Markets

Instead of selling everything, examine which product will perform best. Consider the target country’s commercial norms, culture, and business climate.

Find the potential markets before exporting if you believe your diamond company would perform well in a specific nation.

The market’s latest trend is going to help your cross-border business grow. You might find markets where you can sell your collection of diamond stud earrings and wedding jewelry the most. All you have to do is keep patience and research as much as possible.

5. Select a Reliable Payment Service Provider

As consumers value security, choosing a reliable payment source is crucial for eCommerce. The simplicity of usage and the level of protection are two critical factors to keep in mind.

Buyers will feel more secure if they are dealing with a reliable payment processor. Also, if your firm grows, consider providing a variety of payments and currencies option.

6. Your Website Should Be Easy to Use and Understand for Visitors

A company’s language affects how customers perceive it. By learning the local language, they can better know and sell to clients. Logistics experts believe customers don’t enjoy foreign-language services.

Translating a website into a local language may increase client confidence. The flexibility to switch languages has helped digital marketplaces expand globally. Online tools and platforms let eCommerce business incorporates target market languages.

7. Accept Local Currency Payments

Consumers panic when they see a foreign currency in their shopping cart since currency conversion is so quick.

Currency rates may cause customers to abandon shopping carts. Set up local currency payments if your payment provider allows it.

8. You Should Also Consider the Smaller Country for Business

Smaller countries for cross-border e-commerce

Smaller nations may benefit from Cross-Border eCommerce. Why? It’s common for them to have fewer shopping selections than their counterparts. The United States is a popular destination for their purchases. You may see a society’s spending habits when looking at demand in the nation you are targeting. Expanding your sales to smaller countries may be beneficial. You will be able to explore the art and culture as well.

9. Invest in International Business

If you don’t have a solid business strategy, your product will not sell. What your consumers want and how much they are ready to pay is critical. For your company’s worldwide development, do a few things:

10. Set Up Return Options in Your Area

A small percentage of cross-border purchases were returned by consumers (9%), according to “Cross-border shopper survey“, 2020 by the IPC.

International eCommerce enterprises sometimes don’t provide local return options due to cost. Customer returns to a regional logistics facility are an option for cross-border customers. Businesses may entice customers by giving local return options.

The best eCommerce platforms to sell abroad

Excellent eCommerce solutions may help your business development abroad. We have put up a list of those we believe would be a good fit for you.

1. Shopify

With over a million members and $63 billion in sales, Shopify is a popular eCommerce platform. It’s a software-as-a-service and one of the easiest CMS to use, with a significant degree of personalization.

2. Magento

Setting up a self-hosted eCommerce business might be difficult without technical knowledge. If you have a skilled developer, you may fully customize the platform.

Since it’s free to use, Magento has gathered over $100 billion in sales on its platform alone. Magento includes product catalogs and bundles, native product groups, and cross-selling and upselling features.

3. BigCommerce

BigCommerce boasts more than 100,000 businesses and more than $17 billion in sales. That’s why it is one of the world’s most popular eCommerce platforms. Among Bigcommerce’s most appealing features is its capacity to handle massive stock levels.

4. Eshopworld

Global sales need a seamless transition between online and physical sales. Even though they will be browsing and buying online, they will want fast, secure delivery.

Eshopworld appears like an excellent solution for today’s eCommerce growth. Your website may link to a secure customer care platform, giving you a global but local presence.

Some other eCommerce platforms are:

  • Big Cartel
  • Salesforce Commerce Cloud
  • Squarespace
  • VTEX
  • Volusion
  • Wix
  • Woocommerce

You can deepen the reasons and advantages to choose from a variety of eCommerce platforms in this article.

The best marketplaces to sell abroad

An online marketplace, at its heart, is an eCommerce site that carries a wide variety of items from a variety of vendors. There are several well-known markets, including:

  • Amazon
  • Walmart
  • Mercado Libre
  • eBay
  • Wish
  • Etsy
  • Alibaba
  • Google Express

Since there are more than 150 online markets from which to lure customers, you may generate billions of dollars.

Final Words

There’s no denying that international eCommerce is on the rise. When establishing an eCommerce firm abroad, some regulations and limitations must be addressed. You have to take note of each country or continent’s regulations about buying imported items abroad. 

You must also prepare and do thorough research about your target market to reach them. It could be through digital marketing, the use of eCommerce platforms, or online marketplaces. This way, anyone new to the field will have a fighting chance in a very saturated market.