A new report from Juniper Research reveals that by next year, cross-border e-commerce will account for 38% of all e-commerce transactions made globally, and by 2023 the value of the sector will surpass 2.1 U.S. dollars. trillion. Considering it will be $1.9 trillion this year, forecast figures point to 13% year-on-year growth for the industry.
The new document, “Cross-border eCommerce: Emerging Opportunities, Future Challenges & Market Forecasts 2022-2026,” adds that the “marketplace model” is key to growing cross-border e-commerce transactions. An online marketplace is a site where multiple sellers and buyers buy through the same website, and buyers can make purchases without having to leave a given website or application. Dominant vendors such as Amazon are in a good position here, selling goods to customers on behalf of cross-border vendors and providing a quick and easy way to reach a large and diverse audience of buyers while enabling and ensuring that the accepting payments, and providing accurate and robust logistics systems and issues are transparent.
Research co-author Nick Maynard said: “The marketplace model in e-commerce eliminates complexity, which means cross-border merchants can provide localized service. As such, marketplaces are a great way to immediately access an existing user base, although it can be restrictive compared to a direct consumer relationship. »
the new report also concludes that cross-border commerce must continue to grow to keep pace with other shopping models such as ‘buy now, pay later’ and ‘click and collect’. This development can go through the signing of local distribution and payment partnerships. Juniper recommends that cross-border e-commerce providers offer localized e-commerce models if they want to avoid being left behind by others offering options that consumers find better suited to their unique and individual needs.
Interestingly, it is physical, rather than virtual, goods that dominate cross-border e-commerce and this reality will account for over 97% of cross-border e-commerce spending, with digital goods making up the tiny remainder of the 100 percent. Juniper says the maturity of cross-border export of physical goods as a business model is a major factor driving the imbalance. Additionally, as inflation rages across the planet and disposable incomes dwindle, the report adds that payment providers should support a wide range of local payment methods as consumers become more circumspect about what they buy and when.
In some countries, data privacy concerns cast a shadow over an otherwise sunny landscape
The report describes the development and diversification of e-commerce and the changes in consumer buying habits since the beginning of e-commerce. It also highlights the growing reliance on online shopping which, although already hugely popular in 2020, has been massively and permanently boosted by the global Covid-19 pandemic and concurrent lockdowns. Today and in the future, retailers must have a successful, developed and constantly evolving online presence if they intend or expect to stay in the market for long. Indeed, these days it’s the online tail that’s wagging the retail dog a lot.
Additionally, the ever-increasing use of mobile devices in e-commerce has increased dramatically, as 4G/LTE (and now, increasingly, 5G) becomes ubiquitous and payment apps like Apple Pay gain in sophistication and popularity. As the report shows, one of the main drivers of mobile commerce is the ever-increasing user acceptance and comfort and familiarity with digital wallets. Juniper Research estimates that by 2026, approximately 78% of all e-commerce transactions will take place on a mobile device.
Another factor is that customers are demanding to be able to pay securely online through a preferred and often local method of choice. Other factors encouraging e-commerce globally are improving internet access in emerging markets, increasing mobile phone penetration, and the availability of mobile payment technologies, services and applications. . Then there is the improved access to financial services for the unbanked and underbanked in emerging markets and the growing availability of alternative payment systems, methodologies and options.
While e-commerce is experiencing unprecedented success, a few small clouds are rising on the horizon. For example, effective cross-border trade involves dealing with different legislative and regulatory environments, as well as the rapid processing of cross-border payments. And there is a growing demand for multi-currency pricing and local payment options such as “buy now, pay later” which add further complexity to the payments landscape.
And last, but not least, there is the thorny and complex issue of consumer data and privacy. In Europe, the European Union’s overarching and comprehensive General Data Protection Regulation (GDPR) is adopted as a model by many other countries around the world. But others still languish in the dark ages of data privacy and will eventually have to change or face the financial consequences for not properly protecting their citizens’ data. In this regard, even the United States, notorious for its lack of data privacy protections and remedies, is finally moving toward reforming a system that, as it exists, is about as helpful than a chocolate teapot. No one knows how long this change will take in practice.