eCommerce has opened a lot of doors for shoppers to purchase goods from all over the country. Now, retailers and delivery companies are creating as many new opportunities for shoppers to buy goods from across the globe. A few weeks ago I purchased a new phone. Along with the purchase came the option to buy a faux leather case, valued at $50, from the same shop in Vancouver. Knowing that I could get the same or similar one online, I decided not to purchase it at that location. Instead, I went online and found a similar one for $13 with approximately $6 added for shipping. It arrived on my doorstep about three and half weeks later -- so late, because it was shipped from China. FedEx Corp., United Parcel Service Inc. and other global delivery companies are relying on cross-border shoppers such as myself, who believe geography is no object when it comes to finding what they want.
In 2014, UPS bought i-parcel LLC and FedEx bought Bongo International. Both acquisitions are designed to allow foreign shoppers to easily buy goods on a retailer’s site, automatically updating options to reflect the country from which a consumer is shopping. [1] The sites adjust the currencies and shipping methods depending on where a shopper is located, and calculate shipping costs, taxes, and duties. According to Wall Street Journal, FedEx Said in April it would buy Europe-based TNT Express for nearly $5 billion to expand in Europe, while UPS is doubling investment in Europe to nearly $2 billion over the next five years.
In the past few years, cross-border eCommerce has taken off as access to the Internet and the growth of mCommerce spread and shipping options get cheaper and more efficient. Companies like Amazon.com Inc. and Alibaba Group Holding Ltd. have blazed the trails by letting smaller retailers sell their goods internationally through their online marketplaces.
While cross-border purchasing is still a small fraction of total global eCommerce spending, it is the area that is growing the fastest, at a rate of more than 25% annually, according to The Wall Street Journal. By 2019, about 130 million people are expected to buy online from a country other than their own, spending an estimated $307 billion -- nearly triple the amount spent in 2013, according to a Nielsen Company research study commissioned by PayPal. Today, around a quarter of all eCommerce purchases are made with a foreign retailer, according to a survey of nearly 20,000 global shoppers by comScore and UPS. “All of a sudden, eCommerce puts the consumer into the driver’s seat,” says Thomas Kipp, CEO of DHL eCommerce, a unit of Deutsche Post AG. “The consumer has the choice of when he buys, where he buys, and how he wants to pay.” The operations have become so seamless, shoppers often don’t know they are ordering from a foreign retailer. When they do, “the number one driver is that they can’t find that item in their country,” says Carl Asmus, FedEx’s Vice President of International Marketing.
FedEx, UPS, and DHL are scrambling to restructure their service offerings to make cross-border shopping as seamless as possible. As a retailer, “I can try to build all that expertise myself, or I partner with some other organization that makes it easier for me to do that,” said Steve Brill, UPS Vice President of Global B2C Strategy. However, global shipments don’t always go exactly as planned, which is why some analysts aren’t as optimistic that international eCommerce will grow as quickly as delivery companies hope.
Where do you forecast the international eCommerce market going?
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