Cross-border e-commerce defies protectionist fears as shoppers buy more and from further afield
Although worries abound regarding protectionism, the data from a new report says that cross-border e-commerce is rising in importance and becoming more globalised
Cross-border e-commerce is becoming more diversified and globalised finds a new report, even as many worry that increasing protectionism threatens trade growth.
The new state of global cross-border e-commerce report 2023-24 report, which is free to download here, found that the share of revenues derived from international e-commerce and the rates of growth are highest in emerging markets outside North America and Europe, and that consumers are increasingly purchasing from a wider array of countries.
According to the global industry survey conducted for the report, while 72% in North America and 73% in Europe anticipate growth in the next 24 months, 100% feel the same in Latin America and the Caribbean, 83% in the Middle East and North Africa, and 80% in Asia-Pacific.
Furthermore, 35% in Asia-Pacific and 47% in the Middle East and North Africa expect that growth to be ‘significant’, compared to just over 22% in North America and Europe.
E-commerce more deeply embedded in emerging economies
This expansion comes on top of an already higher level of revenues being generated in these emerging economies from international sales. For example, a third of sales from Latin American and Caribbean companies are generated through cross-border e-commerce, compared to a quarter for their North America counterparts.
“We've always seen stronger growth in emerging markets and now is no different than what we've seen before,” explains Patrick Frith, Senior Prospect Marketing Manager, Global Solutions for report partners and tax software provider Avalara. Currently, he sees “a lot of activity going on with Chinese marketplaces and retailers as they step up and rebound.”
The research also notes that consumers are increasingly purchasing from a more diverse array of locations, citing International Post Corporation (IPC) research that found that the share of consumers buying outside the top five main exporting markets has risen consistently from 23% in 2016 to 31% in 2022.
Optimism in the face of protectionism
However, the report notes that 37% of respondents said that they are worried about deteriorating US-China relations and 33% fear a rising trend of protectionism.
Nonetheless, the data in the report underscores that these issues are second to the overall direction for global e-commerce, as e-commerce trade is, in fact liberalising overall, helping to promote growth in the sector.
World Trade Organisation (WTO) figures show that the number of Regional Trade Agreements has more than trebled since 2000, to 355 as of the end of 2022. Furthermore, these agreements increasingly have provisions explicitly dealing with e-commerce, often introducing moratoriums on customs duties for e-commerce goods, and typically cut aligned duties and costs.
“We’re seeing more preferential rates put in place versus punitive,” says Frith, “which is obviously good for merchants, good for business and good for the buyer. It's conducive to, and encourages, trade between countries and means that the shopper is not paying as much as they may have done in the past.”
That global direction and broad-based growth is why more than twice as many respondents expect the environment for cross-border e-commerce to improve than to deteriorate, with 46% expressing optimism against 20% expecting deteriorating conditions.
Download the completely free research for more insights by clicking here!