What are the hurdles to international e-commerce?
A new study finds global e-commerce will top $3 trillion for the first time in 2019 as more than half of online shoppers have purchased goods outside their country. Yet half of the leading U.S. online retailers don’t currently ship outside North America.
The 2019 survey of retailers by Internet Retailer for global payments company BlueSnap and fraud prevention firm Kount found fraud and payment processing were the two primary concerns preventing U.S. retailers from capitalizing on the opportunity.
Sixty percent of respondents cited “currency and payment processing” as one of their “primary obstacles” to international e-commerce. The study noted that retailers are concerned about the complication of accepting payment methods that are not common in North America. Consumers in Germany, for example, frequently pay for online orders upon delivery, while Chinese consumers often pay for web purchases with Alipay and many Brazilians favor Boleto Bancário.
Sixty percent as well pointed to “fraud prevention.” A third think that international expansion is too risky because of fraud.
Other notable barriers landing on the “primary obstacles” to international e-commerce list include custom duties, 52 percent; local regulation and laws, 50 percent; fulfillment, 43 percent; language, 36 percent; and customer service, 27 percent.
Encouragingly, the path to profitability was less of a worry, 21 percent; and generating demand was chosen by only 18 percent.
Indeed, demand from international consumers didn’t seem to be a concern:
- In 2018, U.S.-based retailers in Internet Retailer’s rankings of North America’s Top 1000 retailers by web sales sold $147.3 billion to consumers in other countries.
- Sixty-seven percent of U.S. retailers surveyed somewhat or strongly agreed with the statement that selling online across borders “is a critical source of our ecommerce growth in the future.”
- Fifty-two percent concurred with the statement that international ecommerce “is suitable for us because we have many international customers and followers of our brand and products.”
Yet another challenge for most retailers was found to be the fact that Amazon already accounts for 44 percent of those international sales in 2018, largely because of its first-mover advantage.
- Survey Reveals U.S. Retailers Are Missing Out on Global eCommerce Opportunities – Kount
- Global eCommerce Expansion Report – Internet Retailer
DISCUSSION QUESTIONS: Do you see more benefits or risks for U.S. retailers seeking to capitalize on international e-commerce? What are the obvious and less obvious hurdles?