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Module: Introduction to E-Commerce

Topic: Cross Border E-Commerce

Speaker 1 – Khim Tan, Director, MIR Maju
Speaker 2 – Windy Choong, Seller Executive, eRomman Marketplace

Cross border ecommerce is a phenomenon that has quietly gained huge momentum. Cross-border ecommerce can refer to online trade between a business (retailer or brand) and a consumer (B2C), between two businesses, often brands or wholesalers (B2B), or between two private persons (C2C), e.g. via marketplace platforms.

There are 3 main risks that influences cross border ecommerce:

1) Fraud is arguably the biggest challenge faced by merchants who allow customer to purchase from them outside the borders of their country. Thus picking a good payment service that is aware of local customer behavior is critical.
2) Logistics and reverse logistics is also just as important and can negatively impact the perception of your business by local customers. Consistent and predictable logistics is a requirement for a business that is wanting to capitalise on cross border ecommerce.
3) Regulations – local government and taxation needs thorough examination and could potentially negatively impact your business.
How big is the size of the opportunity?

By 2020, over 2 billion e-shoppers, or 60 percent of target global population1, would be transacting 13.5 percent of their overall retail consumptions online, equivalent to a market value of US$3.4 trillion (Global B2C GMV, growing at CAGR of 13.5 percent from 2014 to 2020) according to Accenture.

As mentioned earlier cross border payments is difficult and should be managed to ensure that customers are not surprised by additional government levies when items arrive at their final destination. Understanding local taxation and ensuring that the customer pays accordingly is crucial otherwise the purchase will be returned and create an aggravated customer that will harm your business and brand.

In summary – cross border ecommerce is here to stay and needs to be considered accordingly as a growth strategy for an ecommerce business. It needs investment (payment processing, staff and logistics) and should be done in a staged manner for maximum impact. Where are the opportunities for cross border ecommerce?

1Cross Border E-Commerce - Siri 122m