Despite events happening around the world from trade disputes to looming legislation with global impacts, we are entering an era of unparalleled growth. According to PPRO research, worldwide cross-border e-commerce grew by 4% last year to a current value of $412 billion. To take advantage of this global opportunity, US merchants need to accommodate the very different local economies of consumers around the world.
The way consumers pay for goods and services is inherently local and driven more by cultural factors than financial or regulatory affairs. Today, local payment methods account for 77% of global e-commerce spend; by 2024, this figure will rise to 82%. By taking a localized approach and understanding the technological, societal and economic trends taking place around the globe, US merchants can reach cross-border consumers and accelerate their growth.
Global Commerce is Booming
In 2018, US merchants exported over $57 billion worth of goods to global markets, with nations like India and Australia purchasing $2 billion each and China purchasing nearly $30 billion. And it’s a two-way street: the US also spends $102 billion overseas each year.
While these figures show total exports, the potential for US merchants to capture a chunk of the $400 billion global cross-border e-commerce market is evident. Global consumers want to purchase American goods; it is a matter of offering the right payment methods to give these shoppers a smooth checkout experience. With the right framework and approach, online merchants can start to see more of this revenue flow back into the US.
Overcoming Barriers to Global Conversions
Global expansion is no easy feat. For merchants that don’t understand the cultural norms, compliance regulations, payment variances and logistical differences of markets around the world, the expansion will likely fail. But leveraging a local e-commerce marketplace and partnering with experts who know these specific payment ecosystems well can help set merchants up for success.
Interestingly, there is a lack of US merchants selling globally. Only 37% of American retailers sell cross-border, whereas markets in the EU see that figure hovers above 40%. Further, only 1% offer mobile payment solutions to global consumers. That could be a significant detriment for consumers in mobile-based economies like China, where 56% of online transactions are completed by mobile e-wallet.
All this means that there’s a chance to capitalize on a $400 billion opportunity, as over half of US merchants have yet to expand their reach beyond the 50 states.
Go Local to Expand Global
Research shows that 47% of consumers would not use a website if it were only in English, and not translated to their preferred language. Consumers demand shopping experiences that are not only seamless but fit their lifestyle. For example, 70% of Americans own credit cards, while this is only true for 18% of the rest of the globe.
Credit growth is stagnating globally, and merchants need to look to local payment methods as a means to increase conversions. These methods differentiate from region to region, making it crucial to truly know the markets they hope to conduct business in.
The good news is that global consumers want to buy from US companies: the value of America’s international brand has risen by 23% over the last year, peaking at $25.9 trillion. US merchants are well-positioned to earn significant market share and consumer loyalty around the world if they use the right partners combined with a local approach.
The path to global expansion can appear daunting; however, the resources are readily available and accessible for US merchants. Localizing every step of your approach – from your e-commerce website to the payment methods you offer and even your marketing choices – can be the difference between success or failure.