Cross-Border E-Commerce to Grow Rapidly in Next Five Years

The expanding global cross-border e-commerce sector has fuelled the growth of the air cargo industry, as it’s extremely convenient to transport goods by air, due to fast travel times. New figures indicate that cross-border e-commerce will grow rapidly over the next five years, benefitting air cargo carriers.

Opportunities are present

E-commerce opportunities

This information was collated by DHL Express, a German logistics firm, in its latest reportThe 21st Century Spice Trade: A Guide to the cross-border E-Commerce Opportunity. It was based on a poll of 1,800 professionals in the retail and manufacturing industries, across six countries, as well as research and in-depth interviews of experts carried out by a leading worldwide management consultancy.

According to Global Trade Mag, a logistics industry portal, the report’s remit was extensive. It sought to examine the world’s highest growth potential markets and products, as well as the motivations and preferences which inspire consumers to execute global online purchases and the factors which govern the success of digital retailers who hope to expand their operations across borders. The study especially focused on the opportunities available premium products and service offerings worldwide.

High growth potential

DHL Express found that higher basket values comprise a larger proportion of cross-border transaction orders than anything else, by a strong margin. It noted that the aggregate expansion rates afforded by international e-commerce, simply cannot be found in the majority of other retail markets.

The report concluded that between 2015 and 2020, cross-border e-retail volumes are forecast to rise from US$300bn to US$900bn. This signals a 25% annual rate of growth, meaning that this sector is predicted to grow at twice the rate of domestic e-commerce sectors within this period. DHL Express further noted that simply by expanding their offerings to global consumers, digital retailers have already managed to spur their sales upwards by around 10% to 15% over the last year alone.

Changing landscape

The report shed light on the advancing nature of global e-commerce. It noted that both supply and demand are growing more sophisticated, with each passing year. The study discovered that this may be fuelling demand for premium services. For example firms who offered consumers a faster shipping option in their digital stores, grew 1.6 times faster than their peers on average during this time frame.

The report offered additional key insight, into why cross-border e-commerce is set to keep growing, in the period to 2020. Primarily those retailers who provide their products online can cut out the middlemen, appealing directly to consumers and these firms are expected to expand 30% faster than other companies operating in the cross-border retail sector in the next few years. Other contributing factors included the rising availability of attractive online deals and increasing consumer product availability, which are incentivising customers to become more discerning and shop online.

When polling consumers, DHL found that the cross-border e-commerce industry faces a number of key challenges. These primarily relate to logistics, price, trust and consumer experience. Concurrently, there are various measures digital retailers can adopt to identify and cultivate demand from overseas. DHL Express suggested that many retailers can now open up new markets, by adapting their offerings to the digital marketplace, as we’re increasingly operating in a trade eco-system characterised by facilitators and off-the-shelf solutions, such as website check-out localisation programmes.

Forming partnerships

The cross-border e-commerce sector is set to grow exponentially to 2020, due to strengthening consumer trust, allowing more businesses to sell products online. However, many firms still find it difficult to transport their goods easily across borders, so it is key that they partner with global logistics experts going forward. Logistics operators have the infrastructure in place to deliver fast, reliable, flexible delivery, as well as both localised and centralised warehousing and fulfilment. This gives e-commerce traders the ability to provide the first rate service consumers are increasingly demanding.

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