Though, cross-border e-commerce growth will be dampened slightly in 2023 by the economic outlook and a come-down from pandemic spending, the long-term prospects are strong, with a high probability that the total value of trade crosses $1 trillion in 2023, a new report has predicted.
The report titled: ‘The State of Global Cross-border e-commerce report (2023-2024)’ by Avalara, was conducted between December 16th 2022 and January 26th 2023 through Reuters Events, Supply Chain database of supply chain professionals, alongside selected distribution partners focused on the supply chain space.
The survey drew in 732 total respondents based in North America, Europe, Asia-Pacific, Middle East and North Africa. From this initial total, 465 respondents finished the survey to end through respective survey pathways.
Findings of the survey revealed that, 64 per cent of manufacturers, retailers, and Logistics Service Providers (LSPs) currently conduct cross-border e-commerce or plan to within the next year and 28 per cent of sales from companies engaged in international e-commerce are cross-border transactions.
It is highly likely that the total value of global cross-border e-commerce will surpass $1 trillion in 2023, the report averred, even as it disclosed that 77 per cent anticipate growth in cross-border e-commerce over 2023 and 2024, with 27 per cent expecting a very high growth scenario.
However, the report disclosed that the pace of growth should moderate from extremely high growth rates experienced in the period 2020-to-2022, which were spurred on by pandemic purchase patterns.
Meanwhile, it highlighted that cross-border transactions continue to challenge most organisations, while revealing that compliance and cost are the two main concerns. “Failure to attach the correct documentation is a frequent occurrence and leads to delays. This has a high impact as consumers prioritise cost, speed and convenience when making purchases,” the report further explained.
Nonetheless, it recommended the need for manufacturers and retailers to embrace technology and prioritise partnerships.
Senior director of growth, Cross Border, Avalara, Evan Wright, while speaking on the findings of the report, averred that, international e-commerce has become an impossible-to-ignore force in global spending patterns, adding that, an already sky-high growth rate reached meteoric levels during the pandemic and there remains plenty of momentum today as sales are likely to top the $1 trillion mark in 2023.
While this massive opening of new markets has been a welcome revenue injection for many companies,
fulfilling those demands has been, and remains, far from painless, Wright lamented, even as he stated that, “the step-up from sales to domestic customers is considerable and this can create issues for sellers, shippers and buyers alike. Many are thrust into an unfamiliar world of compliance and customs duties, which can lead to higher costs and delays.
He urged industry players to adopt the recommendation of the report which lays out solutions to these pressure points.
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