Cross Border Ecommerce Building Blocks – Nick Duan (Leading Cross Border Expert -China)

  • Internet penetration/Online shopping rate/ Mobile devices adoption
These two factors combined are the critical points that decide how much cross border e-commerce will grow in a targeted market. Normally a high Internet penetration signifies more people surfing online would be willing to purchase products online. The more people using mobile devices like smartphones, the easier it gets for them to shop online.
  • Economy/GDP per capita 
Economical condition/consuming power of this country indicates the frequency of consumers purchasing on the Internet as well as  the average ticket of product purchased per transaction.
  • Government regulation(Customs Clearance)
Governmental policies towards customs clearance play an important role in deciding if cross border e-commerce will burgeon in a short period of time. Within these policies, what the threshold of declared value of products will be charged tax&duty and how much will be charged will drastically decide if the product purchased from abroad will be more competitive in price. How fast will a parcel come through customs will also be critical to the growth of cross border ecommerce.
  • Logistics
The development of Logistics is closely related to the policies of  the government rolled out upon customs. If the government is more friendly to cross-border business and would be willing to invest money on infrastructure to improve the logistics networks, it will spur the development of cross-border because logistics is one of the most critical points on deciding if more consumers will be willing to buy products from abroad due to the either high shipping cost(express parcels) or long lead time(registered mail parcels)
  • Payment (credit card penetration and cross-border payment solution)
Speaking of payment concerning cross border, we are actually talking about to kinds of payment: consumer using a credit card or other payment gateways to check out , and platforms using cross-border payment solution to pay sellers back. The development of cross-border in emerging countries has long been plagued by lacking enough payment gateways for consumers that keep a lot of potential consumers from buying products online. Certain developing countries have a stringent financial regulation that makes  the payout to sellers with foreign currency hard and intermittent.
  • IT infrastructure
If you take a look at how Amazon, Ebay and Wish has achieved along the way (especially Wish, claims to be the No.1 mobile e-commerce platform with only hundreds of staffs working on development), one most important thing they have in common is how capable and highly performed of their team are to help bolster the process of huge amount of orders every day without having glitches on and off.
  • Language
Language is also something we have to pay attention to when it comes to markets that are not spoken with English.
  • Return/Cancellations
Return and Cancellations have been a big issue for both platforms and sellers. How to define when consumers and return or cancel an order and how to handle a dispute between sellers and consumers is still an issue that no platform could handle really well. Due to the high shipping cost and tax & duty charged for inverse logistics, cross-border sellers would choose to ditch returned products. That’s why overseas warehouse could be a huge benefit to helping them process returns: If the returned products are in good condition, they might resell it as refurbished or second-hand products.
  • Stock Management
This is something sellers have to pay special attention, especially for sellers who sell on multiple platforms at the same time.
  • Localisation
If you sell in countries like the US and UK, registering a localized company will be beneficial to you in terms of setting up your local warehouse, getting the tax refund, handling returns, getting more exposure with local fulfillment.

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