“Made in USA” – for international online retailers, it’s a profitable distinction: American-made products see the highest demand in cross-border e-commerce. The United States is one of the most important international e-commerce markets in the world, but market growth will depend on how businesses are able to penetrate markets where online shopping and even the internet are still taking hold. The key to success? Solid e-commerce logistics.
By Charles Brewer, CEO DHL eCommerce.
I’m just as guilty as anyone – my smartphone is never far from my reach. Whether it’s posting Tweets or updating my LinkedIn profile, my life has been irrevocably changed by technology, which is affecting the very way we live our lives. That includes significant changes to our shopping habits – driven by the growing possibilities of e-commerce.
In 2015, the B2C online shopping market was worth $1 trillion. Unsurprisingly, about half of the market is in the tech-crazed Asia-Pacific region, with China leading the way. In North and Latin America – the third-biggest online shopping market with a share of just over 25 percent – e-commerce is driven by the United States.
What makes the US such an important e-commerce market? For starters, about half the population shops online, and in 2015 each online shopper spent an average of $2,100 on goods. Add that up and the e-commerce market in the US was worth $358 billion in 2015, with estimates placing that figure at just over $550 billion in 2020.
Another important factor actually comes from abroad. The United States is the leading destination for online shoppers buying across borders (the “Made in USA” effect). More than 900 million consumers – 45 percent of all online shoppers – are expected to purchase international products online by 2020, which only bodes well for the US.
South of the border
A lot of those international buyers will come from Mexico, a key market for US online retailers given that around 40% of Mexican online shoppers place orders from their northern neighbors. That’s despite the fact that more than half of Mexican households lack any kind of internet Access.
Will that hurt e-commerce business between Mexico and the US? Absolutely not! The relatively low cost of a smartphone allows even less-affluent users to ‘leapfrog’ traditional technology and dive headfirst into e-commerce possibilities inherent in mobile technology.
But access to a smartphone is only part of the equation. For the e-commerce experience to be a success, the logistics – fulfillment solutions, cross-border shipping and payment, and first and last-mile delivery – need to run as smoothly as possible.
Logistics of e-commerce
Smooth e-commerce logistics starts with providing an online retailer with customized omni-channel fulfillment solutions. Next comes the logistics of the cross-border transaction, with different currencies, customs restrictions, or duties among the important considerations that must be addressed to ensure a positive shopping experience for the customer. ICart from DHL eCommerce Americas is one solution, providing reliable shipping, complete cost data, and a safe multi-currency payment engine.
The final step is of course delivery to the end consumer. At DHL, we’re working on improving how to get shipments delivered on the first attempt by giving customers choices when it comes to last-mile delivery methods (such as traditional couriers, pickup at retail locations, or parcel lockers) and delivery times (narrow delivery windows, weekend delivery, and predictive delivery come to mind).
FC Bayern Munich
It’s been said that football knows no borders – but it’s logistics making that possible.
One of our greatest models for success is helping FC Bayern Munich – Germany’s most successful football club – reach their 90 million fans in China by providing cross-border services, last-mile delivery, and fulfillment as their official logistics and full-service e-commerce partner. We worked with the club to develop an online shop tailored to Chinese shoppers for the team’s official merchandise. The e-commerce platform launched in 2015, and the success was immediate: fans dressed in official FC Bayern merchandise welcomed the team in droves during the team’s summer tour of China
The success in China was about providing fulfillment solutions for FC Bayern to serve customers in China. A similar challenge exists in connecting e-commerce retailers in the US to unique markets abroad, and the logistics innovations from DHL eCommerce will undoubtedly play a role in making that a reality.
I’ll be following our progress closely – using my smartphone, of course!
This blog post originally aoppeared on the Delivering Tomorrow website.
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