Why Cross Border eCommerce is the Future of eCommerce?

Worth around $60 billion, according to Bloomberg, China cross border eCommerce involves transactions between businesses and consumers across international borders. It has become easier to buy and sell innumerable products between China and other countries due to the mushrooming growth of eCommerce websites and online marketplace platforms. The development of secure payment portals and social media networks has also helped.

With further technological advances, the cross border eCommerce is only going to expand in the coming years. It is possible that the currently free-flowing trade may face some impediments if the Chinese government passes legislation imposing restrictions on it. However, the restrictions will be more to regulate the China cross border eCommerce trade to make it easier for the government to monitor it and collect taxes. Other than that, it is not likely to prevent people from doing business across borders in other countries.

Benefits of cross border eCommerce

Cross border eCommerce has become far too important for the continuing health of national economies for any government to try to end it. It is undoubtedly the future of eCommerce. Let’s understand the reasons for this, from the perspectives of the sellers as well as of the buyers.

From the seller’s perspective:

•  Rather than remaining restricted to and dependent on domestic markets, where there may or may not be sufficient enough demand for your products, you can now tap various lucrative markets overseas.
•  You may not get the prices you want in local markets, but it may be possible to command higher prices and enjoy increased revenues by selling your products abroad.
•  It is possible that your business is not thriving domestically due to local regulations and local competition. With eCommerce, however, you can bypass these and avail of international opportunities.

From the buyer’s perspective:

•  By visiting eCommerce websites, you will have access to a whole lot more variety of products than you would by shopping locally.
•  You could buy products that are not readily available in your country. You could even purchase unique items that you might not be able to find elsewhere.
•  Even if some products are available locally, they might be too expensive. You could buy them at much lower rates online.

Risks of cross border eCommerce

Given the many advantages of the China cross border eCommerce trade, it is tempting to throw your hat in the ring and get started. However, before you embark on any endeavor, you should also be aware of the risks involved. Here are a few things to be wary about:

Payment frauds: The risk of getting defrauded is always there in cross border eCommerce transactions. Quite a few businesses involved in trading with other enterprises or selling to retail customers have encountered difficulties in recovering due payments. Some have also faced credit card fraud. It may help to research a business well before trading with them and also to use safe and reliable payment service.

Cost of returns: Product returns are an inevitable part of eCommerce. Buyers may decide to return products for various valid and invalid reasons. If you have a domestic business, this isn’t much of a big deal. However, the shipping expenses can be high for international returns, and if you get too many of them, it will negatively impact your business revenues.

Logistic failures: To prevent customers from developing a negative outlook about your eCommerce business, you need to make sure there are few or no logistics failures. Make sure you have a reliable transport infrastructure, plan for contingencies, make use of different warehouses if possible, and do trial runs to iron out commonly occurring issues.

Other challenges that sellers and buyers can face include overcoming language issues, finding affordable shipping options, integrating payment methods, conducting marketing campaigns, and complying with international legal regulations.

Overcoming cross border eCommerce challenges

Cross border eCommerce is here to stay. To overcome the many challenges, however, you can do the following before trading in China and abroad:

•  Learn about local customs, cultural aspects, business practices, and consumer preferences.
•  Partner with a reliable regional business and have them handle the local level business inventory and marketing campaigns.
•  Comply with local business rules and regulations.

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