Cross-border business, borderless commerce, and international online shopping are just a few examples of global ecommerce. What it isn’t, though, is more important than what it is.
global ecommerce is a must. It is not just one strategy among several. Globalization is global.
Unfortunately, there are a lot of unanswered questions. What should I invest in? Which nations provide the most favorable product-market fit? How can you entice consumers from outside your area? Which, among translation, currencies, payment methods, or something else, is most crucial?
This guide will provide you with an inside look at global ecommerce and pointers on how to enter the market.
What is global ecommerce?
First things first: global ecommerce is the sale of products or services beyond geopolitical borders from the place of origin of a company, which is often referred to as the location of its formation or incorporation. Online sales and marketing are used to market and sell products and services in non-native markets.
According to recently updated forecasts, global ecommerce sales would only expand by 9.7% in 2022 compared to the most recent recorded period. The same graph also predicts that growth will only slightly slow down during the next several years.
Such large sums of data are difficult for us to comprehend. They are both energizing and intimidating. You’re not the only one if your company is wondering where to start as it looks down that $5.7 trillion barrel.
The advantages of international ecommerce are:
- Lower barriers to entry
- Shorter B2B sales cycles
- Easier-to-find product-market fit
- Easier expansion into foreign markets
- Quicker building of international presence
According to a recent article in the Harvard Business Review, “business executives are scurrying to adapt to a world that few could have envisaged a year ago.” The myth of a world without borders has been disproved. The United States and the United Kingdom, two long-standing foundations of free markets, are shaky, and China is establishing itself as the most steadfast advocate of globalization.
Below, we’ll unpack this remark in greater detail. The main premise is straightforward for the time being: the impact of global ecommerce is too great to ignore.
How big is the global ecommerce market?
In 2022, it is anticipated that the global ecommerce market will reach $5.7 trillion. It is anticipated that this number will increase over the next few years, demonstrating how valuable borderless ecommerce is turning out to be for online merchants.
Only 17.8% of sales two years earlier came from online purchasing. The ecommerce market share is expected to expand by 2 percentage points to 20.8% in 2023 from its current level. Growth is expected to continue, with a projected point of 23% by 2025—an increase of 5.2 percentage points in only five years.
Global ecommerce sales growth
Retail market share will continue to rise as global retail sales growth keeps rising. By 2023, eMarketer and Statista’s study projects that online retail sales will total $6.51 trillion, with ecommerce websites accounting for 22.3% of all retail sales.
Every national market examined by eMarketer experienced double-digit ecommerce growth even though retail has been struggling since 2020. The pattern keeps going:
- Ecommerce sales in Latin America (which includes Peru, Brazil, Argentina, Chile, Colombia, and Mexico) reached $104 billion in 2022, a 22.4% increase from $85 billion in 2021.
- With a projected 25.5% growth in sales by 2022, the Indian ecommerce market is one of the top 5 fastest-growing nations in the world.
- Within the next several years, the UK is expected to constantly grow by $85.7 billion (+42.88%).
With 46.3% of all retail ecommerce sales globally and slightly over $2.8 trillion in total online sales in 2022, China will continue to dominate the global ecommerce market. Additionally, 842.1 million of them, or 39.4% of the global world’s digital purchasers, are in this total.
In 2022, the US ecommerce market is anticipated to grow to more than $904.9 billion, slightly more than China’s. With 4.8% of the retail ecommerce sales share, the United Kingdom is the third-largest ecommerce market after China and the US. Japan (3%) and South Korea (2.5% each) are the nations that come after the UK.
Since 2018, the top five ecommerce markets have remained the same. These markets are expected to remain in the top five through 2025, according to eMarketer trends.
“While a lot of attention in ecommerce revolves around the United States and Canada, there is a lot to learn from other significant foreign companies that are witnessing an even more rapid growth rate in ecommerce,” says Casey Armstrong, CMO of an ecommerce fulfillment company called ShipBob.
The need for ecommerce in these nations, he continues, “allows merchants to change where they sell.” At ShipBob, this is the reason we’ve established fulfillment facilities in Australia as well as the UK and Canada.
Set up your international ecommerce strategy
It might be overwhelming to set up an international, omnichannel ecommerce strategy, but there are a few crucial areas that, if you focus on them first, will aid in your success.
The areas to focus on are:
- Pricing. For international ecommerce sellers, currency translation and how to manage promotions are two problems when it comes to pricing. Regarding the first, it’s important to learn how consumers in the nation you’re targeting view pricing. While it’s usual practice in the West for pricing to end in nine, round numbers are preferred in countries like China. According to McKinsey & Company, organizations should consider more variables when determining price sensitivity for promotions (especially in foreign markets). Additionally, combining pricing and promotions economically and efficiently may boost sales and profiles by three to five percentage points overall.
- Payments. You will, fortunately, need a credit/debit card processor, such as Stripe, and mobile wallet options, like Apple Pay and Google Pay, in addition to a buy now, pay later (BNPL) option, when considering what payment methods are reasonably straightforward for international ecommerce. Although Shopify Payments includes all the options you want, you can still set up digital payments manually.
- Customer service. No matter where in the world you are operating, providing excellent customer service is important. According to a GRIN study, 46.75% of the consumers who were polled felt that their ecommerce experience would be incomplete without important customer support. Phone, email, and live chat are frequently used forms of contact for CS in most countries.
- Shipping and logistics. It’s important to think about how your customers will react to your products since they will probably cost a lot of money. So consider reducing as much friction as possible to ensure effective international shipping. This involves researching different pricing options with carriers, providing shipping time estimates, researching pertinent taxes, and simply forbidding the sale of specific products in certain countries.
Get a head start with Shopify Marketplace
We introduced Shopify Markets in 2021, and this year we introduced Shopify Markets Pro, an enhancement to this functionality. By streamlining complicated areas like compliance, customs, shipping, and conversions, this new service aids companies in managing their international sales. Using this capability, retailers in North America typically reach 14 additional new markets.
6 top global ecommerce trends to watch
1. Global inflation pressures
Over and above poverty and social inequality (31%), unemployment and jobs (26%), and coronavirus (12%), inflation has emerged as a leading concern for 40% of respondents around the globe.
Global brands are not immune from the burden of inflation, even if consumers are still spending money. As a result, you must take into account the effects of inflation in various countries if you want to use cross-border ecommerce.
In a recent interview with Glossy, Olaplex CEO JuE Wong reveals that despite net sales growth of 38.6% in Q2 2022, the company is still vulnerable to macroeconomic factors, geopolitical events, and global inflation. JuE Wong claims that even though the business is cash-rich, it will invest in technology (such as ecommerce solutions) and technical skills to support growth.
In light of this concern, it is worth researching the inflation rates in the countries you want to target and, maybe, modifying your pricing strategy based on the information you discover.
2. More consumers will shop on their smartphones
Global ecommerce patterns have been significantly impacted by the COVID-19 epidemic. Shoppers raced online to make purchases as brick-and-mortar establishments closed overnight. According to experts, the pandemic hastened the transition to online shopping by up to five years.
M-commerce, or mobile commerce, refers to online shopping done on a mobile device such as a tablet or smartphone. Over the next few years, m-commerce will continue to grow. People may now shop on their phones more easily because of technological advancements including branded shopping apps, 5G wifi, and social shopping.
Shopify merchants used mobile shopping to make 71% of online sales made using mobile devices against BFCM in 2021.
Because smartphones and tablets are being used more and more often worldwide, online retail is still growing. Smartphone retail ecommerce sales are expected to increase from 4.1% in 2019 to 6% in 2022, accounting for a larger share of total retail sales. An increasing number of merchants and shoppers are using mobile shopping apps, with one in five US shoppers reporting doing so often.
Sales of social commerce, another aspect of mobile shopping, are anticipated to treble by 2025. Compared to China, where almost half of the customers now shop on social media and are expected to generate more than $351 billion in sales in 2021, just 30% of US consumers report making purchases on social media platforms.
With 49% of businesses spending on social commerce content in 2022, the rivalry is increasing. You may anticipate increased marketing efforts through SMS and Facebook Messenger, branded shopping apps, and social commerce content on TikTok and Instagram.
3. A new mix of marketing channels
Recently, there have been exciting developments in several sectors of advertising, including the availability of new marketing platforms.
With the introduction of Facebook and Instagram shopping tools and, more recently, TikTok shopping, social commerce has been at the forefront of attention for the last five years.
But as the strategy has exploded in China, live shopping has begun to gain popularity as a natural extension of social commerce. In 2021, the live commerce market in China was valued at $2.27 billion, and in 2023, it is expected to reach $4.92 billion.
As a marketing medium, live commerce is just now beginning to take off in other countries. For instance, in the US, 20% of online shoppers claimed to have engaged in live commerce, while another 34% indicated they hadn’t but had heard of it.
Connected TV advertising, or the ads you see on platforms like Hulu, Roku, and YouTube, is another upcoming new marketing channel. Customers’ opinions of these ads are similar to those of linear or cable TV, but when comparing the two, they felt that the ads on streaming services were superior.
Hoka, a manufacturer of athletic footwear, recently launched a global advertising campaign that made use of linked TV platforms. Hoka claimed that this campaign increased social media followers and website traffic by 68%.
4. A struggling global supply chain
Morris Cohen, Wharton Professor of Operations, Information, and Decisions, described the COVID-19 pandemic’s effects on supply chains as “a massive disruption, comparable to having an earthquake or tsunami.” For many years, these were the main components of supply chain management:
- Low-cost supply
- Minimal inventory
When COVID-19 disrupted supply chains all around the world, businesses were forced to concentrate on increasing supply chain resilience or come up with strategies to prevent supply chains from stopping and swiftly resume them when they do.
Supply chain disruptions are becoming more frequent and severe, and the consequences of the coronavirus were not an exception. In Europe, where sales fell 19% from the same period in 2021, Levi’s had its largest year-over-year loss in 2022. According to McKinsey, there are now severe interruptions in manufacturing output every 3.7 years on average.
Systems won’t “normalize” until at least 2023, according to experts. Even once they do, the pandemic has shown weaknesses in the world’s logistical network due to global political unrest, natural calamities, and regulatory changes.
Some industry professionals think that supply chain problems are the new norm. The course of global manufacturing will be impacted by other crises that are now in motion. There is no reason to believe that this system won’t be vulnerable to more issues in the future.Rebecca Heilweil, Supply Chain Reporter
5. Growing sales in China and APAC
Retail ecommerce sales are anticipated to surpass global totals in the Asia-Pacific region by 2023. This is a result of many factors, including: (1) rapid urbanization and technological growth; (2) more than 85% of the world’s growing middle-class lives in APAC; and (3) a number of government- and privately-led projects in China.
In 2022, China’s ecommerce sales were expected to reach $2.8 trillion, more than double the size of the US market.
Manufacturing in APAC and China has seen a revival on the B2B front. The B2B mismatch is therefore considerably more obvious.
There are many difficult obstacles to overcome while entering China, and to a lesser extent, APAC as a whole:
- Sites hosted on foreign servers suffer excruciatingly sluggish page loads due to China, which lowers onsite conversion rates and search engine rankings.
- Even though Chinese businesses may penetrate western markets, advertising and social content through Facebook, Instagram, YouTube, and Google are not available in China.
- Chinese consumers use ecommerce.
Shopify and JD.com, major Chinese online retailers, joined forces to take advantage of this global ecommerce boom. Now, US online shoppers using Shopify may offer their products on Chinese ecommerce, which has over 550 million users.
JD.com will take care of processing fulfillment, and flying merchandise to China from its US facilities to finish delivery. The cooperation shortens the 12-month sales process for foreign brands in China to three to four weeks.
6. Creating content for consumers in their local language
PayPal conducted a poll, and 57% of respondents claimed they often shop abroad. Nearly two out of every five respondents stated they had recently made an international purchase.
In contrast, more than two-thirds of respondents to the Flow.io research who were English-speaking shoppers stated they would not purchase from a site that was not in English. Cross-border commerce was least prevalent in the Japanese and South Korean markets, where those figures increased to 41% and 36%, respectively.
Going fluent with the language of your website—beyond the capabilities of Google Translate—can make or break global sales. From the very beginning to the very end, it generates a positive client experience.
Most customers in the Flow.io research agreed that the following pages on the website should be in their local language:
- Product descriptions (67%)
- Product reviews (63%)
- Checkout process (63%)
CSA Research revealed that 65% of customers prefer content in their own language, even if it is of low quality, based on a study of 8,709 global consumers in 29 different countries. An additional 40% will not make purchases from websites in other languages.
This last discovery merits more investigation. The process of localization may sometimes seem daunting like it’s an all-or-nothing proposition (either it’s country-specific, or why bother?). It isn’t.
Because of the respondents’ emphasis on navigation and “some” content, a site does not need to engage in comprehensive translation right away. Headlines, product names, and other highly examined elements of a site must be right. Full-scale translation employing a native copywriter and regional idioms makes sense only once you’ve acquired traction.
It’s time to go cross-border
Global ecommerce isn’t an option; it’s a necessity, according to all the aforementioned facts, research, and trends. It will determine the growth and maybe even the survival of your business. For this reason, we developed a step-by-step strategy for going global effectively.
It is not an indulgence. Multinational companies are not eligible. And it’s not the only growth strategy available. Global ecommerce is a requirement that you should use to your brand’s benefit.
Global Ecommerce FAQ
The Global and United States Ecommerce Market Report and Forecast estimates that the value of global ecommerce marketing will be $7 million in 2022 and $20 million by 2028, with a CAGR of 17.
1. Determine your target international markets and how they will support business growth.
2. Understand target market needs, for example, preferred payment methods.
3. Create a plan for market entry.
Ecommerce may support and streamline international trade, make understanding business transactions simpler, and aid companies in better understanding market needs.