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How to explore opportunity in cross-border E-commerce during this pandemic period
Nearly 75 % of the businesses in the U.S have experienced supply chain disruption in recent times due to COVID-19, according to the survey by The Institute for Supply Management conducted on 628 U.S. manufacturers and service providers between February 22 and March 5, many of the businesses are suffering from recent events, while some are expanding like never before. In recent years Cross-border e-Commerce has taken the world by storm, it is growing at 17% compared to domestic eCommerce across the globe, and is expected to reach $1 trillion by 2021. Despite slowdowns in May, U.S cross-border online sales grew 42%, with June showing the same positive growth trend.
By engaging in cross-border e-commerce, organisations can directly sell to global consumers and become self-sustaining in the long term since customers are now much more comfortable at making purchases online from different countries. The best way to utilise the cross-border opportunity is to prepare for it. But, before planning, we first need to understand the challenges of cross-border sales in the global context.
The below image shows the challenges faced by supply chain operators. This data is based on a survey conducted on 195 respondents, which shows that nearly 46% of the respondents are facing challenges related to delivery, while 24% are facing challenges related to returns and nearly 22% are facing challenges relating to working with partners across borders.
In today’s global marketplace, the effects of a disaster can be felt throughout the supply chain long after an event takes place. While some are finding the best way to manage a supply chain disruption, others are utilising it to the fullest. Now let us have an understanding on how brands can explore the opportunity in cross-border E-commerce during this pandemic period.
- Strategic Clarity: Brands have to take a strategic approach in order to take advantage of cross border sales during the pandemic. Brands first need to find the most attractive consumer market and understand the current demands in the cross-border platform. After having an understanding of the existing demand, brands need to find the availability of products similar to that of the brands, after doing the competitive analysis brands should have a source, differential than that of their competitor. After analysing the above-said factors, brands have to understand their funding capabilities and also the changing customer demand to sell in other countries. Thus, possessing strategic clarity demands examining and choosing the most leading cross-border markets, and ultimately preparing how to accomplish the plan, and including building internal sources. Otherwise, you’ll end up scrambling at the last second to throw something together which will result in disappointing sales.
- Choosing the right technology solutions: Brands need to identify the top e-commerce channels in every country that they want to sell in. Choosing the right technological solution can help the brands in tackling all possible challenges that brands face when going global. Brands need to find a solution which can help them in maintaining order management, inventory management, and customer service so that they can fulfil the customers demand with speed and efficiency.Selecting the right solutions provider can make the entire cross-border sales a breeze.
- Warehousing And Fulfilment: Today’s customers want one day or even same-day delivery of their products, and warehousing solutions is a critical aspect for brands in achieving this goal. After entering the global market, brands have to ensure whether or not they are successfully able to fulfil their customer demand on time. To ensure that, many of the fulfilment solutions provide fulfilment options from one central hub to serve all global demand with a fully localised approach. Finding the perfect business model depends on several factors and brands should select a fulfilment approach which can details listing, provide cataloguing, identify the SLAs for operations, order fulfilment, managing out of stock and understanding payment terms. These globally accepted workflows are essential not only to reduce cost, but also adhere to marketplace and government regulations.
- Shipping Choices: One of the crucial aspects of cross-border sales is shipping. Shipping may be the most unglamorous part of cross-border sales, but at the same time it is the most essential part of e-commerce. According to the International Maritime Organization, “We live in a global society which is supported by a global economy—and that economy simply could not function if it were not for ships and the shipping industry. Shipping is truly the lynchpin of the global economy: without shipping, intercontinental trade, the bulk transport of raw materials and the import/export of affordable food and manufactured goods would simply not be possible.”
- As per a survey conducted by Deloitte, nearly 68% of shoppers who opted for free shipping wanted the product to be delivered to them in 3-7 days, and nearly 67% of shoppers who opted for fast shipping wanted the delivery in less than 2 days. This survey explains to us the importance of how shoppers are ready to wait if they have been given an option of free shipping .Offering the right shipping choices has been proven to be an essential aspect in getting more customers
- Returns Management: A well-managed return management can increase customer loyalty and grow sales revenues. Study suggests that nearly 86 per cent of customers expect to be allowed to return online orders, which makes it difficult for the brands to handle return and refund. Having a well planned returns management system will increase brand’s visibility and reach.