Cross-Border eCommerce Gains Momentum
The holidays are upon us, and as we all get ready for the virtual feasts, the pandemic has in one sense put up some borders between people and knocked others down. This is especially true in eCommerce, where friction points have crystalized around FX rates, accepted payment methods and, of course, fraud.
It should be noted that headwinds have been persistent. As noted in the latest set of earnings results from the card networks, cross-border spend was down double digits. But as some economies have reopened, and as news of vaccines have hit headlines, international eCommerce has been resilient, especially for those countries that (depending on how you look at it), have been able to get the virus under some semblance of control.
One of the most visible testaments to this resiliency comes via stats from Alibaba’s Singles Day, which showed earlier this month that the Chinese consumer has pivoted to embrace online sales on the international stage. As noted in this space, Alibaba said Singles Day sales (actually a bit more than a week) were more than $74 billion, leagues above the $38.4 billion from last year. U.S. brands such as Apple and Nike saw strong demand, according to reports, as did brands with a decidedly international presence such as Estee Lauder and Marriott International.
Separately, even before Singles Day and the holiday season came officially into view, as estimated by Global-E and cited in Digital Commerce 360, global eCommerce sales were up 21 percent as measured in the period between January to July.
Platforms On A Global Stage
In one example of the appeal of platforms in Europe, platform APEXX and online fashion retailer ASOS announced an agreement last month where APEXX will process payments for ASOS customers across several European markets.
And as reported here, Citi Global Head of Cross-Border Payments Amit Agarwal told PYMNTS that the growth in eCommerce has been proving to be a tailwind across far-flung subsets of transactions beyond purely retail transactions. Thus, B2B and B2C subsets of commerce are also seeing movements toward digitalization and increased cross-border activity. In terms of demographic shifts, he said, the rise of the middle class has boosted buying across online marketplaces.
“If consumer payments are almost becoming ambient or abstracted from the actual experience of buying or consuming a product or a service, that behavior increasingly is becoming present in the B2B payment domain as well,” Agarwal told PYMNTS.
The numbers bear out what seems an inexorable trend, with risks and rewards. This was detailed earlier this year in the PYMNTS Cross-Border Merchant Friction Index, done in partnership with FastSpring and surveying 266 eCommerce sites across 31 countries.
“Transacting with merchants abroad often requires a great deal of translation for both languages and currencies. It also requires that all payments comply with know your customer (KYC) and anti-money laundering (AML) requirements,” the index found. The sites that have proven to be the most successful demonstrate a holistic approach that includes consideration (and deployment) of preferred local payment options, a range of languages to serve consumers and robust refund policies are ingredients to a success cross-border commerce endeavor.