Consumers are increasingly look to make purchases online and, more often than ever before, these are now cross border. So, international E-commerce offers significant opportunities to businesses from all over the world to expand and engage with more customers – but there are also challenges involved.
Challenges of international E-commerce...
- Logistics. A strong logistics network is going to be essential to ensure that any physical product gets from your business to the consumer on time and in good condition. Cost is a crucial factor but not the only one – finding a logistics provider with a reliable service and extensive global reach is another key challenge.
- Returns. A bad returns experience can damage the relationship that your brand has with a customer forever – many simply won’t return again. However, cross border returns involve increased complexity, from the cost through to reverse progress of items through customs.
- Local laws and regulations. For items that are travelling to and from countries within the EU there are minimal duties and customs regulations to consider. However, as soon as you begin selling outside of these locations then you will have multiple sets of local laws, restrictions and regulations to bear in mind.
- Payment processing. It’s essential to have a robust payment processing infrastructure in place – and one that can handle the different payment preferences of customers all over the world.
- Operational readiness. The global E-commerce market is huge and success can sometimes be as challenging as failure.
Ways to solve the problems
- Find a global logistics provider. Global logistics and fulfillment services will simplify the issue of ensuring that your goods end up in the hands of the consumer in great condition and at the right price. Find a provider with existing mature networks offering a wide range of different service choices and features such as tracking that enable you to put the power of monitoring parcel progress into the hands of the consumers.
- Work within a well-established returns infrastructure. International E-commerce returns are not a new concept and there are already logistics providers offering a comprehensive returns service that takes into account the detail of customer need, such as the requirement for a local returns address.
- Find a parcel clearance solution. You could opt for a postal clearance solution, which simplifies your involvement in customs requirements for individual items, or a commercial clearance solution, which is designed to help an organisation cope with large volumes of parcels.
- Invest in flexible payment processing. Start by looking into the customer preferences for your target locations – for example, almost 100% of e-commerce payments in Spain are made by credit card but in Germany this figure is just 30%. Invoicing is historically the most popular online payment type in Germany but PayPal, credit cards and direct debits are increasingly used. You may need to adapt the payment options you offer to take account of local preferences.
- Prepare your operations for growth. It’s important to take the time to research every market that you’re considering entering to identify local consumer preferences and gaps in the product market. Make sure your IT infrastructure will be able to cope when accessed from different locations and in higher volumes. And develop customer service solutions that take into account different time zones and languages.
There are plenty of challenges facing an E-commerce business looking to enter the global market. However, the range of rewards available for success make these well worth the risk.
Sources: Pitney Bowes/Wirecard/Statista
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