Cross-border e-commerce has come a long way since the days of one-month delivery times, obscure currency conversions and untrustworthy international sites. Now, thanks to the emergence of global marketplaces, the reach of social media, the improvement in worldwide logistics and the ease of digital payments, cross-border e-commerce has become the norm.
According to Airwallex 2024 report, 54% of consumers intend to make more cross-border purchases over the next 12 months. To take advantage of this global trend, here’s what brands need to know.
When making overseas purchases, consumers use a range of channels with preference for large international marketplaces such as Amazon, AliExpress and eBay (89%) over direct sales from a merchant’s website (81%). 63% of consumers also purchase from smaller marketplaces that may be country or product specific, although this is less common among UK buyers (50%) than Chinese buyers (84%).
With the emergence of social commerce, it’s also no surprise to see social media platforms grow as a global shopping destination with consumers appreciating on-site purchases, interactive ‘live shopping’ and influencer recommendations. 59% of consumers make cross-border purchases on social media platforms with Facebook (28%), TikTok (22%), Instagram (20%) and Youtube (15%) the most popular.
Today's online shoppers can benefit from greater product availability and cheaper prices when buying abroad without sacrificing delivery times or shopping experience. But despite the favourable conditions, consumers are unlikely to make a cross-border purchase unless brands offer three core elements.
Just as UK buyers prefer to pay in Pounds, Japanese customers prefer to purchase in Yen. Pricing in local currencies not only helps customers gauge value, but avoids the notion of FX fees - so much so that displaying products in local currency impacts purchasing decisions for 93% of buyers.
Meanwhile, debit and credit cards might be the most popular payment options in the world, especially in the UK (33%) and US (27%), but the rise of digital wallets like Apple Pay and the emergence of Buy Now Pay Later options like Klarna varies across the world. In China, for example, 48% prefer to pay via AliPay, while iDeal is the preferred method for 40% of Dutch consumers and German buyers use PayPal for almost a third of online purchases. 77% of consumers would abandon their cart if they can’t pay with preferred payment methods.
Delivery & returns is crucially important for all e-commerce purchases, but especially if buying from a site halfway around the world. In particular, the cost (41%) and speed (24%) of shipping are the most important features when evaluating international deliveries with consumers more likely to pay for faster delivery and transparent tracking when buying internationally than domestically.
In addition, almost half of consumers cite cumbersome refund processes and costly returns as a concern. A poor refund and returns policy can also negatively impact customer loyalty with 37% of buyers unlikely to make a repeat purchase if the process is below par.
Your brand is less likely to have name recognition in international markets than in your home market and consumers are more wary of scams or financial security when making cross-border purchases. For example, only 42% of UK consumers trust international merchants.
To build trust with intentional buyers, brands need to focus on social media and customer reviews. The Airwallex report found that international influencer endorsements will increase brand trust for 75% of consumers and that authentic customer reviews play a key role in 75% of international purchase decisions.
Be it embedding international payment options or leveraging worldwide logistics, selling globally from your own site involves a lot of effort. But global marketplaces are already set-up with multi-currency accounts, global logistics and a trusted brand name.
With the global cross-border e-commerce market set to reach $7.9 trillion by 2030, brands are best suited to take advantage of sales opportunities by selling on global marketplaces. To find out which global marketplaces are right for you - check out our blogs on choosing global marketplaces and determining global marketplace success.