The Biggest Opportunity in Commerce: Cross Border

Selling online in multiple geographies is the holy grail of retail but is the most complex commerce territory to conquer with the battle to be won the ability to accept in-country payment methods. Today, cross border commerce is relatively small – at 8 percent of online commerce – so there’s lot of room for growth. Market Platform Dynamics CEO Karen Webster and BlueSnap’s CEO Ralph Dangelmaier went around the world to explore the opportunities and challenges of doing business in some of the biggest markets for growth.

FIRST STOP: CHINA

With its massive economy and emerging middle class, China is pegged to become a global leader in online sales. However, there are some idiosyncrasies that merchants selling into that market need to address. For one, said Dangelmaier, if merchants are not offering Alipay in Chinese languages and currencies, it will be very challenging for shoppers in the country to shop and merchants’ sales will be hampered.

SECOND STOP: INDIA

Trekking on to next country, Webster pointed out that many believe India is about a decade behind China in terms of its ability to drive a massive volume of online sales. Dangelmaier agreed, calling the country “tricky” for cross border commerce, since it is hard to get a credit card in India. Thus, if merchants do not offer the ability to pay for things direct from their bank account, “they will miss half the population that buys online today,” said Dangelmaier.

THIRD STOP: RUSSIA

Consumers in Russia love cash in spite of the relative sophistication of the consumer base. Cash wins because they don’t trust the government enough to feel comfortable leaving an electronic or paper trail when they use those cards.  In response to Webster’s question about how the market can be served, Dangelmair said, “The biggest thing that’s really taken off in Russia is the adoption of ewallets. If merchants do not provide these, he said, it will be difficult to do business in Russia.”

FINAL STOP: BRAZIL

Yet another dynamic market, Brazil poses language challenges and contains a number of people that are online but are not yet shopping online, noted Webster. The challenge is to get them comfortable with online shopping, in part by using a familiar payment method. Yet for many reasons, Dangelmaier also called Brazil “tricky.”

“Brazil also has taxes that get served up on merchants and shoppers, which increase pricing for buying things online,” he said. And if merchants aren’t offering what is called “local acquiring” following recent laws in Brazil, there will be many card declines for Brazil shoppers.

How to Win Cross Border

BlueSnap suggests that anyone wishing to compete in the cross border commerce opportunity follow three simple principles: “local, local, local.” That’s Bluesnap’s focus, making it easy for shoppers to receive the same services online as they have been in-store for years – the ability to pay in their language, currency, and local payment method.

“Why, when shoppers go to ecommerce, should they be set backwards?” said Dangelmaier. “BlueSnap’s solution is to try to provide these services ‘out of the box,’ with no development for merchants, focusing on the local aspects of each country.”

For more on the specifics of cross border commerce in China, Brazil, India and Russia and one approach to bridging the country-specific barriers, listen to the full podcast here.

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