3 Strategies to Overcome the Challenges of Cross Border E-Commerce Logistics – LogiSYM November/December 2019
E-commerce is booming across the world. Today’s consumers are savvier at comparing goods and services online and making informed purchase decisions. They now look beyond their country for the best deal.
As one of the fastest growing sectors (growing an astounding 5-7 times the rate of global gross domestic product) in the retail industry, retailers should sit up and pay attention. Successfully extending your offerings beyond your local markets can boost sales by 10-15%.
Here is where a robust cross border e-commerce logistics infrastructure comes into play. To tap on this deepening gold mine, merchants need to think and go global – can you sell and deliver your merchandise across the world?
Why is cross-border e-commerce flourishing?
Sharing his thoughts in a 2019 interview, David Abney, CEO of United Parcel Service (UPS) highlighted the expanding tech-savvy, and younger middle class and their growing appetite for e-commerce in emerging markets like China and India as key growth factors for cross border e-commerce.
Statistics are mind-blowing. In China alone, cross-border e-commerce sales are set to hit $140 billion by 2021; no mean feat when the country already claims 40% of the entire world’s e-commerce sales. This lofty figure is forecast to exceed 60% in a few years. Likewise, in high-income countries like Singapore, 55% of all e-commerce transactions are cross border. Residents can afford to spend and expect fast shipping times with its considerable logistics infrastructure.
Savvy retailers have plenty of opportunities to grow their business in 2019. However, leaving the comfort of your local markets to venture into the untested waters of cross-border e-commerce can be challenging. What do you even look out for?
To help you out, we share 3 distinct issues in cross border e-commerce logistics for retailers who are preparing to go global.
1. Cross-border e-commerce logistics require effective logistics processes
Cross border delivery journeys are naturally more complex than domestic deliveries. Journeys tend to involve multiple delivery handoffs between postal and commercial logistics partners for each leg of the journey. As such, delivery times are uncertain due to potential delays at customs.
Therefore, your logistics processes need to be optimized for both customer transparency and detailed logistics reporting:
First, ensure your customers are kept in the loop with proactive updates on the delivery’s journey.
Cross-border deliveries have more variables involved to bring a parcel from supplier to the customer’s doorstep. From supply importing delays to potential delays at each border’s customs; how you manage this process defines your shipping times which will have knock-on effects on customer satisfaction rates and retention rates.
Remember, customers value transparency in the logistics process and you need to set the right expectations when communicating expected delivery times in your post-purchase experience.
Second, ensure your logistics back-end supports detailed logistics reporting across multiple carriers.
These additional complexities extend to your back-end reporting. Each carrier involved multiplies the complexity of how you are going to evaluate carrier performance and can become an issue if not managed properly.
If each carrier has their own logic of displaying and reporting on tracking events, you need to ensure each carrier’s respective tracking events map to the same stage of the delivery journey with a common, standardized event mapping approach.
Once the products leave your door, you need to rely on external logistics partners to deliver on the promises you made to your customers. Why not do the due diligence to ensure they will be able to match your service standards?
Bonus tip: evaluate the standard of customer service provided by your logistics carriers
Did you know questions about order delivery status make up 30% of all incoming service inquiries? With cross-border transactions on the rise, expect to communicate a lot more with your carrier’s to investigate your customer’s orders. Get them to provide regular customer service reports and evaluate if their customer support is easy to work with. These simple checks can save you lots of headaches down the road.
2. Understand diverse shipping regulations and customs in different countries
In cross-border shipping, each market has many different rules and regulations that must be observed to avoid delays in the delivery process. Retailers also need to be mindful of the different legal and financial regulations of each market they plan to expand to.
Stay updated with local logistics regulations in each country and abide by local security laws. Also, consider exploring potential issues around data privacy and how your data is processed and stored.
Some logistical and legal considerations for aspiring cross-border shippers to bear in mind:
Have proper documentation regarding the order and its value, shipping details from your suppliers and all necessary information from your customers. These documents should then be provided to the driver and courier companies and are especially important for customs clearance
Stay updated with the latest security regulations for each country you are shipping through
Thoroughly examine local government and taxation needs to ensure customers are not surprised by additional government taxes when items arrive at their final destination. Otherwise, you risk creating an unhappy customer
Be mindful of each country’s legal limitations of what goods can be sold to whom
3. Adapt and localize your content to account for the local market
When entering a new market, retailers need to be sensitive to cultural nuances and language differences when building marketing campaigns and product descriptions. With 87% of consumers not fluent in English refusing to purchase at English-only sites, a critical first step is to translate your e-commerce site and associated after-checkout tracking pages into the local languages.
While the translation of content is an excellent first step, the localization process doesn’t stop there. Full localization means adapting your solution and content to fit the target audience’s user habits and preferences. You choose different words when they have the potential to offend, change colors and products featured to fit local preferences and festivals.
Amazon does this particularly well.
In their localized site for India, Amazon focuses on mobile phones; a critical piece of technology in many Indian homes. The homepage also features third-party ads on the right and product recommendations in Hindi; a feature unique to India’s page.
In comparison, Amazon’s Japan homepage features prominent promotions and advertising for White Day, a festival celebrated in Japan on 14th March, a festival where men return gifts to women who gifted them chocolates on Valentine’s Day.
Vary your website and branding with accepted cultural norms and design practices across the different markets to ensure familiarity and better user experience for your new customers.
Cross-border e-commerce is a land teeming with opportunities:
Indeed, more customers across the world are using the Internet to discover and purchase goods not available in their domestic market and numbers continue to rise. With countries like China, Southeast Asia, Mexico, and even Australia steadily becoming rich opportunities for cross border e-commerce, consider expanding into different markets as a growth strategy in 2019.
However, with every venture into unknown lands comes risks and things for retailers to keep in mind.
Use these three comprehensive strategies to overcome the challenges that come with facilitating cross border e-commerce logistics for your business to thrive.