Executive Briefings

Cross-Border Retail Volumes to Increase to $900Bn by 2020, Research Says

DHL Express has published research highlighting growth opportunity for retailers and manufacturers with an international online product offering. The report, "The 21st Century Spice Trade: A Guide to the Cross-Border E-Commerce Opportunity," looks at the markets and products that offer the highest growth potential, the motivations and preferences of customers making international online purchases and the success factors for online retailers that wish to expand overseas.

It focuses in particular on the opportunity for premium products and service offerings, with higher basket values accounting for a significantly higher proportion of orders in cross-border transactions.

The report says that cross-border e-commerce offers aggregate growth rates not available in most other retail markets: cross-border retail volumes are predicted to increase at an annual average rate of 25 percent between 2015 and 2020 (from $300bn to $900bn) — twice the pace of domestic e-commerce growth. Online retailers are also boosting sales by 10 percent to 15 percent on average simply by extending their offering to international customers. An additional boost comes from including a premium service offering: retailers and manufacturers that incorporated a faster shipping option into their online stores grew 1.6 times faster on average than other players.

"Shipping cross-border is much, much easier than many retailers believe, and we see every day the positive impact that selling to international markets can have on our customers' business growth," said Ken Allen, CEO, DHL Express. "We also see that virtually every product category has the potential to upgrade to premium, both by developing higher quality luxury editions and by offering superior levels of service quality to meet the demands of less price-sensitive customers. The opportunity to 'go global' and 'go premium' is there for many retailers in all markets. Our global door-to-door time definite network is perfectly positioned to support any retailer that is developing a premium service offering or simply looking for a way of reaching  new overseas markets directly without investing resources in warehousing or distribution."

The report is based primarily on research and interviews conducted by a global management consultancy, as well as more than 1,800 responses to a proprietary exporter survey of retailers and manufacturers in six countries.

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It focuses in particular on the opportunity for premium products and service offerings, with higher basket values accounting for a significantly higher proportion of orders in cross-border transactions.

The report says that cross-border e-commerce offers aggregate growth rates not available in most other retail markets: cross-border retail volumes are predicted to increase at an annual average rate of 25 percent between 2015 and 2020 (from $300bn to $900bn) — twice the pace of domestic e-commerce growth. Online retailers are also boosting sales by 10 percent to 15 percent on average simply by extending their offering to international customers. An additional boost comes from including a premium service offering: retailers and manufacturers that incorporated a faster shipping option into their online stores grew 1.6 times faster on average than other players.

"Shipping cross-border is much, much easier than many retailers believe, and we see every day the positive impact that selling to international markets can have on our customers' business growth," said Ken Allen, CEO, DHL Express. "We also see that virtually every product category has the potential to upgrade to premium, both by developing higher quality luxury editions and by offering superior levels of service quality to meet the demands of less price-sensitive customers. The opportunity to 'go global' and 'go premium' is there for many retailers in all markets. Our global door-to-door time definite network is perfectly positioned to support any retailer that is developing a premium service offering or simply looking for a way of reaching  new overseas markets directly without investing resources in warehousing or distribution."

The report is based primarily on research and interviews conducted by a global management consultancy, as well as more than 1,800 responses to a proprietary exporter survey of retailers and manufacturers in six countries.

Read Full Article