Cross-Border Commerce in Australia – A Game of Local Market Share!

Cross-border commerce has paramount benefits for every business scaling itself from small-sized companies to a bigger one in due course. In Australia, many small and medium businesses have sourced their success from global marketplaces, trying to fill in the gap between demand and supply better than local vendors. Such companies that thrive on cross-border commerce continue to increase leads, shares, profits, and revenues in global expansion. Generally, the small startups are innovative, agile and even have the potential to grow much larger than one can expect.

The Small and Medium Business (SMB) community in Australia dominates the private sector in terms of employment. They serve as an employment to millions of Australians and contribute much more than the large businesses to the Australian economy. For the past five years, there has been a drastic increase in the count of actively trading businesses running across Australia. This has primarily led to increased growth of small business communities. The consumer shift has driven the small businesses in the cross-border market.

Such businesses should be encouraged to focus on the values of the sales opportunities outside the Australian market. They should know the fact that billions of consumers await the best quality products from cross-border markets. This inspires them to take a step ahead into the cross-border business.

Impact of cross-border commerce in Australia

There is a constant rise in the demand for the Australian products and services amongst the overseas consumers. This high demand is due to the quality Australian brands offer to their worldwide buyers. Also, the Australian sellers have developed and maintained a strong relationship with their consumers. Such demands have the potential to increase the consumer market in the Australian business by billions.

The “Australian-made” certification had been introduced about 30 years ago. It provides a thrust to the domestic business for excelling in the market of production of goods and services.

Young Australians love to shop!

National Australia Bank conducted a survey that reveals the percentage of total cross-border purchases. The calculation involved a larger ratio of the generation Y as the. Eventually, to meet such high demands, delivery companies had to increase their benchmark of supplies of the international brands online.

The Global brands need to develop strategic solutions to fulfill their consumer’s every need. Whether it is entering the new channels, increasing the data warehouse capacity, or offering prompt delivery and tracking options, they have to cater to every demand. Improvements in the fulfillment mean the online retailers and brand can set up their inventory near to the Australian customers. This emphasizes on cost-effective and quick delivery.

Shipments are off the dial

There has been a staggering growth in the cross-border shipping services when it comes to Australian retailers. The e-tailers in Australia promise fast delivery of all the products from fashion apparel to cosmetics and vitamins. The best selling products with high quality and first-class delivery services have made the Australian business flourish in these markets.

Thus, in terms of shipments, quality products, high demand and strong market shares in the overseas market, Australian businesses have been quite a ruling name.

 

12 Common Mistakes Done while Selling in Cross-border Markets

The rate at which technology is excelling knows no bounds. It is creating innovative ways to connect with the world every day. While technology continues to change the channels in the market, the connection between merchants and consumers keep growing stronger. With the advancement in technologies, still there are some common mistakes, merchants make while engaging in international markets.

Let us walk through each of these mistakes to overcome any pitfalls.

  • Avoiding to calculate total landed costs

It is necessary that merchants and buyers maintain a transparent relation between them in the cross-border market. Merchants should inform their international buyers about duties and tariffs. You can also use the TCO (Total Cost of Ownership) calculator.

It is mandatory to maintain trust and dignity amongst your international buyers. It can be evaluated in the following ways:

  1. Provide product tracking details
  2. Provide on-site shipping information details
  3. Update on delays in international shipments

 

  • Creating Big Technology Investments

Merchants while investing in the international markets should keep minimum technology investments. This holds true for the integration of third-party channels as well as international checkout providers.

We recommend you to focus on small investments first rather than the big ones such as:

  • Market Insights
  • Personnel
  • Logistics

 

  • Ignoring online frauds

There is always a risk of fraud when entering the cross-border markets. But you can always take help of the solutions to prevent such frauds and meet your business requirements.

You can prevent fraud during international checkout on-site with two methods:

  1. Installing a fraud suite
  2. Leverage 3rd Party Logistics to secure against fraud

There are several solutions Subuno, Riskified and Signifyd like that reduce such online frauds and provide secured payments internationally.

 

  • Copy & Pasting

Repetitive content and media cause a mess across the localized and international markets. This is a common mistake international merchants often make. Thus, it is better to avoid any copy and pasting media and content on your site.

It is necessary to focus on the potential language when localizing the content. You need verifying the media as poor on-model product photography can create a bad image in the market. Also, it can affect the SEO rankings for the particular region.

 

  • Dimensional and Physical Shipping Assumptions

Most of the merchants and eCommerce businesses fail to assume the dimension and physical shipments. If you fail to consider these, it can be a costly assumption.

  • Dimensional Pricing – Shipping costs based on the size of a box
  • Physical Pricing – Shipping costs based on the weight of the box

Thus, it is beneficial to include these pricings in the overall product cost to predict accurate marginal costs.

  • Disregarding Localized Merchandising

When selling products globally, merchants must consider some factors so that they can merchandise their digital stores.

Consumer Demand & Trends and Climate are the factors that affect the local merchandising.

 

  • Not Failing in Translation

It is critically significant to focus on how your website gets translated into different languages. It plays a crucial role in the localized and domestic markets. International sellers and merchants can consider using the translation providers like Smartling and VerbalizeIt.

These translation providers transform the way the content is created and consumed by the local and domestic markets.

 

  • Government and Political Constraints

You must be aware of the government laws in accordance with the countries and political constraints. It is mandatory to follow the government norms and data alliance while taking a plunge in the international markets.

For instance, in Russia, it is mandatory all the customer data must be kept on server in-country.

 

  • Disregarding Promotional Calendars

A mistake international merchants fail to notice. You have to prioritize the region of expansion and plan the marketing campaigns accordingly. Mark your calendars for the promotional events to be carried out.

In the Middle East during Eid, you can observe many sales events during shopping, entertainment, and traveling. Likewise, every region or country follows certain events and you have to keep that in prior notice to stand stronger in the international markets.

 

  • Don’t Go Overboard

Merchants often go overboard while engaging in the cross-border market. You have to consider the right aspects when selling the products.

It is better to focus on a single market and its essentials first before plunging into various other markets. This will help you learn from the mistakes so that you can implement the solutions while expansions.

 

  • Managing Efforts from a Distance

It is sometimes impossible to manage efforts from distances. While globalizing in the market, markets like India, China, and UAE, it is difficult to manage the resources. But markets like Western Europe and North America are more manageable. It is always recommended that you leverage the local resources in this case.

 

  • Marketplaces are not for the premium products

The fact about the cross-border markets is that the international shoppers shop more from the local brands and markets.

Today, the premium brands are opening flagship stores on the various social commerce platforms and local markets.

Avoiding such pitfalls always helps but if you successfully aim to ace the global markets, launch an international site. This in all ways localizes the site, content, and products. Not necessarily, all the brands go by this rule and even if they do so, they still make commit these mistakes.

The Omnichannel Strategy Fuelling Cross-border Commerce

Consumers are the real king in the world of cross-border commerce. They possess the power of choice. They have the freedom to choose whether to shop online directly from a retail website or from the online marketplace. They have the right to choose their preference over the multiple online channels. As per latest research, the phenomenon of “Online Local. In-store Global” is one of the driving elements of cross-border commerce. Many shoppers while traveling abroad often discover the brands and visit their offline stores. Later, they continue to purchase products from the brand store online.

Let us understand why it is essential to implement the omnichannel strategy for cross-border commerce.

Getting the payment options right

The payment options for online shopping vary from country to country. There is no widely accepted payment option used by a majority of the cross-border shoppers. It is very crucial to choose the payment options. This increases the chances of increasing significant number of online consumers. There are important factors the online shoppers and merchants should consider while selecting the payment options. Some factors are

  • Value of purchase
  • Service fee
  • The total cost of purchase
  • Purchase protection plan

As per a survey, credit cards were the most preferred mode of payment. Second to the list were the E-wallets that allow the consumers to store and access multiple payment options at one go.

Direct sales vs online marketplaces

Nearly, half of the consumers trust shopping through online marketplaces. They do most of their online shopping through marketplaces – be it local or cross-border. In top countries like Japan, China, Germany, and India, the shoppers make their most of the purchases with the cross-border marketplaces. As per reports, 75% of the global shoppers purchase their favorite brands and products from the retailer’s direct site.

While in some countries like Australia and Canada, the trend is direct-to-retail sales. Thus, the online retailers need to consider a broader approach to increasing their online market presence. For this, they have to accept multiple channels to reach a large number of global shoppers and increase their sales.

Huge Interest in cross-border commerce

The research suggests that cross-border commerce prevails to be the first choice among the consumers globally. Consumers often make about 95% of their domestic purchases online. However, more than 66% of the consumers have also contributed to the cross-border purchases. Countries that have the highest number of cross-border shoppers are Australia, Hong Kong, and Singapore. While there are still some countries like Japan and U.S. which are evolving and making their online presence stronger in the cross-border commerce.

Shipping and returns

Online shipping and returns are a major concern for both merchants and the consumers. There are certain elements that merchants always face challenges. They are

  • Shipping the right products
  • Order tracking and delivery
  • Transparent return policy
  • Proper custom duty and taxes

This issue becomes a more challenging task during the holiday season as most of the consumers opt for online and cross-border shopping. As per reports, India, Singapore, Hong Kong and China are among those countries with a large number of consumers opting for cross-border purchases. During holiday seasons, the consumer rush is more and thus the merchants and retailers experience a lot of challenges. There are constant efforts to bring improvements in giving the consumers a seamless shopping experience.

In order to grow the online presence in the cross-border market and strategize the omnichannel approach, consider the following steps:

  1. Integrate your findings
  2. Segment your audience
  3. Know your customers
  4. Prioritize the online channels and the devices
  5. Focus on customer support
  6. Measure your efforts.
  7. Create a premium customer experience

Conclusion:

Every cross-border marketer should engage the audience in a value-driven way to empower the cross-channel integrations. Thus, to provide a seamless and better customer experience, it is necessary to give your customers the first priority. Additionally, it is essential to analyze the sales in the marketplace and choose the right payment options. This increases your brand awareness and loyalty in the omnichannel cross-border market.

Top Considerations While Accessing New Global Markets

It is easier than before to leverage global markets today. Social media scales geographic borders, highlighting brands in international markets more easily than ever. Although gaining visibility is comparatively easy, SMBs need to establish a strong foundation in place for long-term scalability in global ventures.

 Merchandise Products for New Markets

Neglecting merchandising process is a huge mistake for those entering new markets. With local elements in creative visualization, customer service and order processing, merchandising needs to be accorded huge importance too. Investing in people and collaboration tools can help entrepreneurs strike good relationships with the new markets.

When merchandising, the top considerations should be:

  • Climate – Be sure to account for the climate of the target market
  • Competition – Look at how the competition has positioned itself with the products they are selling through different channels
  • Consumer Trends – A product that is popular domestically doesn’t always succeed internationally. Do thorough consumer testing and surveys in the region before launching the product there. Most businesses target regions where they have witnessed sales before they launch the product, specifically in that region.
  • Religious Affiliations– Religion in some markets play a huge role in using some products. The products should not be in way marketed to offend religious sentiments

A Sound Cross-Border Commerce Strategy for Success

Some factors need to be respected and aligned with, for consistent success in cross-border commerce for accessing certain geographies for business. Some of those factors include:

  • Hire International Support

Hire high-value team members, in-house or freelance. Outsource the support work to them for competent international support services. Likewise you might need language support in some countries, especially if the local language is something else than English.

Support your lean business when it goes global, maintaining brand standards elsewhere too. Hire competent freelancers only for your business tasks.

  • Double Check Product Restrictions in each Country

While most products are inherently safe to sell across borders, double-check to see if there are any product restrictions in any country.

Some verticals like apparel, beauty and cosmetics, consumer electronics and health goods have particular restrictions by country.

  • Ensure the Technology is Scalable

Make sure that you have an e-store powered by technology that is scalable and not at all cost-prohibitive. One should select a platform that features out-of-the-box attributes required for standard processes in cross-border commerce without having to incur additional monthly costs.

The technology should be able to incorporate basic functionalities that can process discounts, coupons, emails for abandoned carts, analytics, customer groups, shipping, and payment etc. Going global without having the support of a strong technology platform is the onset of a huge disaster. You may be able to sell products, but rising costs, inefficiency in efforts and even result in lower margins would hinder you consistently.

  • Divide Processes and Hire Resources

For SMBs, going global is a big step and as they grow, the workload grows too. SMBs are usually lean and managed by a handful of stakeholders.

One needs to take ownership of the business but one should also understand it is not a one-person job. Do not restrict bringing on help for scaling processes and one can use assistance where the internal team lacks in terms of skills and resources.

While exploring cross-border opportunities, the right manpower and resources in the local areas are extremely important in getting the business major visibility

 

The Cross-Border Commerce Boom – What will Matter in 2018!

Now we can buy anything from nearly anywhere in the world just by clicking a button on our smartphones. Yes, cross-border commerce is actually booming, and one can expect the juggernaut to continue in 2018 and beyond until the foreseeable future.

Smartphones have made shopping easier. One can expect more shoppers coming out of their self-imposed abstinence from online shopping owing to minimal security concerns nowadays. A Forrester study revealed that cross-border commerce is expected to double by 2021 with staggering revenue of $424 billion expected by that time. Cross-border sales shall include 15% of online purchases too. China’s cross-border market is expected to grow to a whopping 40% in 2021 and the country can easily fuel growth in the domain.

The McKinsey report revealed that most wealthy people in China, buy foreign clothes and gadgets that are mostly not available in China. Baby formula is quite popular here.

Why? Because cross-border shopping helps them in deriving better prices, and good protection from counterfeit goods too. Now that is a major point!

The Leader in Cross-border Commerce and the Future Prospects

The US is touted as the world leader of cross-border commerce trade – including imports and exports. The country has a trusted cross-border market worldwide and known for its product quality too. A DHL survey revealed that 75% of respondents who make foreign purchases selected the US as their ideal destination for online shopping. Now that says a lot about the US as a major cross-border commerce.

How does it augur for other countries though? Pitney Bowes recently disclosed its Global Online Shopping Survey that reported 66% of shoppers who shopped the web locally have made purchases from other countries in their recent past. Singapore, Australia, and Hong Kong are top countries with most number of cross-border shoppers. On the other hand, Japan has grown its cross-border confidence tremendously in the recent years.

Smoothening the path of commerce locally!

Although the predictions are fantastic and rightly so, cross-border e-commerce is far from easy, for retailers owing to huge competition and diverse trade laws in every country. A 2016 survey by Paypal revealed 30% of consumers from different countries buying from the US, abandoned their cross-border purchase midway since they were unaware of the taxes or customs fees involved in the purchase. Here is what every cross-border commerce provider should know:

  • The exact kind of taxes and fees incurred through cross-border sales
  • Right communication to local customers in the country about the products.
  • No customers should get lost along the way, so multiple processes should work in harmony – the ordering process on site and payment methods along with calculation of taxes and alignment of government regulations
  • Communication of returns should be in clear words including the fulfillment clauses and delivery mode.
  • The return process should look seamless. For the seller, problems arise from the fact that each of the parties involved has a different level of understanding, motivation, and sense of urgency when it comes to getting the goods from one country to another.

Getting fulfillment right is the key to successful cross-border commerce and retailers know it. According to the Chinese Cross-Border Sellers survey by The Payoneer, 71% said fulfillment is highly important and logistics play a major role in this respect.

If 2018 is the year you plan to initiate cross-border commerce, ensure that the products are available locally with a good distribution in place in an international market. Also, ensure that your logistics partner is clear about the bigger picture. While consumers are driving the demand for cross-border e-commerce, get the right add-ons for your e-stores and the right domain experts to everything runs smoothly at the local level.