Cross-border e-commerce set to be bright spot in tough year for consumer spending
Even as consumers draw back on discretionary spending, expectations for cross-border e-commerce growth are high among supply chain professionals, with the global market likely to pass $1 trillion in value in 2023
The international e-commerce market is set to continue its recent run of strong form says the new state of global cross-border e-commerce report 2023-24 report, which is free to download here.
In an industry survey conducted for the report, more than three quarters of organisations said that they anticipate cross-border e-commerce growth over 2023 and 2024 and 27% expect that growth to be significant even in the face of weakening consumer spending.
The report notes that this massively outweighs the negative sentiment in the survey, where only 3% expect cross-border e-commerce to decline over the medium term.
Despite high price increases from inflation, we're still seeing astronomical cross-border growth
The expansion in international purchases will likely push the total value of the global cross border e-commerce market over $1 trillion in 2023 forecasts the report.
“Despite high price increases from inflation, we're still seeing astronomical cross-border growth,” said Patrick Frith, Senior Prospect Marketing Manager, Global Solutions for report partners and tax software provider Avalara.
“In the challenging economic environment that we find ourselves in, [companies] are looking overseas to shore up some of the shortage in domestic revenue or regional revenue. Essentially, it's a hedge to lower the risk of being too dependent on a single market,” commented Frith.
While growth is likely to moderate from pandemic highs, it remains a critical segment for companies to target over the next five years according to the research. The global sector is set to grow at a faster compound annual growth rate than domestic e-commerce in most countries, particularly when it comes to developing economies outside North America and Europe.
The importance of cross-border e-commerce is reinforced by the share of revenues that are now being generated from sales to foreign customers. The research found that cross-border e-commerce now accounts for 28% of sales for manufacturers, retailers and Logistics Service Providers (LSPs) in the industry survey conducted for the report.
Furthermore, 64% of manufacturers, retailers, and LSPs in the industry survey currently conduct cross-border e-commerce or plan to within the next year.
The report recommends that organisations prepare for further growth in the cross-border e-commerce market in 2023-24, albeit at a moderated pace compared to the frenetic level of growth over the last five years. The research indicates robustness amongst consumers and businesses to make cross-border purchases even in the face of high inflation and rising interest rates. It notes that consumer are growing more comfortable with buying abroad and doing so from a wider range of locations.
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