What COVID-19 Means for Cross-Border Commerce

Shoppers wearing face masks in a store in Bogota
Credit: Luisa Gonzalez - Reuters /

Foreign transactions are booming, but breaking into new markets requires a smart approach

By Fred de Gombert, CEO and co-founder of Akeneo

The global coronavirus pandemic all but halted international travel, with passenger traffic down 67% last year as lockdowns, travel restrictions, and fear of contagion left billions of people hunkering down at home. But in the world of eCommerce, cross-border activity remained alive and well. In fact, cross-border transactions grew by almost a quarter last year, and continued to account for about 11% of the booming global eCommerce sector.

As we look ahead to the post-COVID world, we should celebrate the resilience and global reach of digital buyers and sellers. But we also need to understand the reasons that eCommerce has remained a vibrant engine of global economic growth — and the challenges that both consumers and sellers continue to face during these turbulent times.

Business is booming

The first thing to acknowledge is that the pandemic has sparked an extraordinary global surge in eCommerce activity of all kinds — and especially an increase in cross-border buying and selling. Chinese consumers were about two-thirds more likely to buy from cross-border eCommerce brands during the first months of 2020, for instance. Globally, 55% of online shoppers have made a cross-border purchase online over the past 12 months.

Taking advantage of the surge in international buying and selling might not seem difficult for online sellers. As brands have moved more of their sales efforts online, it has become markedly easier for them to rapidly expand into international markets in ways that would have been difficult to manage using physical sales locations. In fact, 45% of CFOs say they’re currently expanding their global operations, and another 9% plan to expand in the next year.

But while getting started in cross-border selling has never been easier, many brands still have a pretty superficial understanding of the challenges involved. To stand out in an increasingly crowded global marketplace, sellers need to move beyond bare-minimum tools, and start building a sophisticated cross-border infrastructure that’s attuned to the nuances and complexities of selling on the global stage.

Translation vs. localization

Customs and shipping are the first key challenges that companies face when they start selling internationally, and figuring out how to handle these logistical complexities effectively is a vital first step toward establishing yourself as a global brand. But far too many sellers assume that simply because they know how to ship their products to foreign buyers, they’ve mastered the art of cross-border selling.

In fact, customs and shipping are just the first steps in a much longer journey. Once you’ve got the basic tools in place to allow you to ship products to customers, you need to start thinking about how to support those customers and give them a stellar buying experience, regardless of where in the world they are.

Achieving that means grappling with nuances such as the difference between translation and localization. Many online sellers customize the selling experience for international markets simply by translating content into different languages. But serving global buyers effectively means more than just putting a few “Comprar ya” and “Acheter cet article” buttons on your website. Instead of simply translating content, you need to localize the entire experience — and that means factoring in the countless intangibles that make up a person’s culturally mediated experience of the purchasing journey.

What does that mean in practice? Well, it might mean recognizing that people from a given market might not be used to buying online from sellers in other countries. Offering a bit of extra transparency into your own processes, and into the steps you’re taking to ensure a streamlined purchasing and fulfillment experience, could go a long way toward helping such buyers feel comfortable placing an order.

In other cases, localization can mean adapting your marketing materials and product information to align with the cultural norms of the location where the buyer is located. The images and copy used to sell swimsuits or underwear in one location might be completely inappropriate for buyers in another, more conservative location. Other localities might have specific legal or regulatory requirements: if you sell food products to British customers, for instance, you’ll need to ensure you’re complying with “Natasha’s Law,” a recently introduced new allergen disclosure statute.

Finally, different locations have different market leaders. Sales materials and product information designed to win over customers in one locale may not compare favorably with competing products in another region, so you’ll need to ensure your product information is customized to beat the competition in the region where it’s being viewed.

Adapting to less mature markets

Identifying and understanding this complex and shifting landscape isn’t easy for established cross-border brands, and it’s even harder for local sellers as they seek to break into regional or global cross-border markets. And of course, such challenges come in addition to, not instead of, the usual headaches faced by cross-border sellers, including the need to tailor the customer experience with content that’s localized to reflect the correct currency, shipping details, language, and so forth.

In some more developed markets, such as the United States or China, consumers are already confident about making purchases online. In many other parts of the world, though, the COVID-19 crisis has dramatically accelerated online buying in ways that still feel novel and a bit unsettling for buyers. For brands selling into less mature geographies, providing clear localized product information is a necessary step toward reassuring customers and convincing them to make an online purchase.

In fact, accurate product information is increasingly important even in mature eCommerce markets. The flip side of the surge in eCommerce sales, in both B2C and B2B settings, is that consumers are getting smarter and more demanding about the way they make purchases online. That’s doubly true for cross-border purchases, since even the consumers will often be dealing with less-familiar brands and may feel they’ll have less recourse if things go wrong.

Find the right toolkit

The good news is that coping with these new challenges requires the same approach that’s required for any cross-border eCommerce strategy. When you’re selling on the global stage, you need to build digital infrastructure that’s capable of delivering a consistent experience no matter where in the world it’s accessed from, and that can serve up tailored information on an as-needed basis.

You also need to ensure that your digital infrastructure is futureproof, and flexible enough to support even unanticipated business needs. When you sell cross-border, you’ll encounter plenty of new challenges and plenty of new opportunities — and you need tools in place that can let you adapt to either without rebuilding from scratch.

The bottom line: whether you’re an established brand or a new player, there’s never been a better time to grow your cross-border eCommerce operations. But the stakes are high, and customers are only getting more demanding — so make sure you’ve got the right toolkit, and focus on delivering a customer experience that reflects the excellence you want consumers to associate with your brand.

Fred de Gombert is the CEO and co-founder of Akeneo, a global leader in Product Experience Management (PXM) solutions that help brands deliver a compelling customer experience across sales channels. Prior to founding Akeneo, Fred was the eCommerce director at Smile, the largest open source system integrator in Europe.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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