Cross-border shopping will make up 20% of ecommerce in 2022, with sales of $627 billion, estimates Forrester Research. There is a shift in the way people make purchases, and this year an increasing number of overseas consumers will rely on products from U.S. stores and marketplaces.
Consumers have become more willing to shop across borders to find different types of products, sometimes for less money than in their own country. Asia-Pacific, driven by China, will become the largest ecommerce cross-border region for both imports and exports, but U.S. companies will need to know how to support this trend.
I reached out to Forrester Analyst Michael O'Grady to ask what types of things marketers in the United States should think about when considering allowing consumers in other to purchase their products. For starters, he said, understand why consumers shop cross-border and emphasizes these elements in the marketing and advertising strategy.
"Consumers shop across borders to find cheaper goods, to find goods that are not available in their domestic market, or to shop at international retailers they can trust," he said.
Consumers tend to shop across borders when their domestic market has fewer online retailers or fewer product options online or where local pricing — even with added duties, taxes, and shipping costs — makes it more affordable to buy products from foreign sites.
Product authenticity also remains a significant driver in countries with a large market for knockoff or counterfeit goods.
Marketers also should take advantage of marketplaces like Amazon, for example, and understand the importance of free shipping and the ability to pay in local currency. O'Grady said two-thirds of global cross-border ecommerce comes through marketplaces.
In May, ShareASale CEO Brian Littleton talked about a deal to improve the payment process for affiliate marketers supporting cross-border sales, which would lower the customer service costs associated with payments across international borders due to poor mail delivery or complex banking setups.
O'Grady said China will drive cross-border imports and exports. Half of global cross-border ecommerce spend will come from APAC this year. China is also one of the top countries favored by cross-border shoppers worldwide.
Fewer consumers in the United States seem to purchase goods across borders. Only 14% bought clothing and accessories, 15% electronics, and 16% luxury goods in 2016, according to Forrester -- versus Europe at 56%, 54%, and 58% and 38%, 33%, and 32% in China, respectively.
Meeting the need of consumers, Amazon, for example, in 2016 introduced its Prime memberships program in China to provide ecommerce services, giving Chinese consumers the ability to buy more types of products and designer goods.
The "buy globally and sell globally" paradigm of cross-border commerce will see significant change over the next five years, driven by ecommerce growth in Asia and the emergence of new ecommerce markets in Africa and the Middle East.
Clothes and accessories is the largest category bought online cross-border, and luxury goods in particular are one of the most popular categories bought cross-border. International travel services like hotel and air reservations are also popular cross-border purchases.