Emerging Trends | ICT4SDG | SDG10 | SMEs/Entrepreneurship
April 27, 2018

3 key considerations for cross-border e-commerce startups

By ITU News

The advice for entrepreneurs is clear: If you want to sell products and services globally, prepare to go global from day one.

That was the overall message delivered at the E-commerce Master Class at the recent Seedstars Summit in Lausanne, Switzerland, one of the largest events for Small and Medium-sized Enterprises (SMEs) from emerging markets.

Over 30 entrepreneurs joined this workshop to learn from Federico Lara, Managing Director of IT and chief technologist at FedEx Cross Border, the co-creator of Bongo International and passionate enabler of cross-border trade and e-commerce solutions for aspiring entrepreneurs.

What is cross-border e-commerce?

Simply put, it is when an online seller is located in one country and the buyer resides in another. To optimize cross-border transactions there are a lot of factors to be considered, and managing the complex data is key.

Sellers need to consider the trade laws and harmonization of labeling requirements. They need to factor in shipping costs, duty and taxes before they begin to go cross-border. And all of these factors will impact their pricing models, packaging and certifications. And it’s better to take these steps in the early days of a company to avoid costly changes to manufacturing processes later in the game, says Lara.

In addition to managing the complexities of cross-border trade, Lara’s advice for entrepreneurs is 3-fold:

  • Embrace disruptive technologies;
  • Look for opportunities to differentiate; and
  • Embrace a global outlook from the outset.

Embracing disruption

Disruption is a by-product of creativity and innovation. And digital technology has disrupted traditional retailing models, eliminating the middle-man and enabling anyone to have an e-commerce business from the comfort of their living room.

“What social media did for communication, e-commerce did for sellers,” said Lara.

E-commerce has opened up a one-to-one model that has allowed sellers to have direct access to the buyers. And increasingly, reach buyers in international markets.

“In July 2017, social media hit a tipping point. Many of you probably didn’t notice. But that’s when the majority of users were outside the US,” explained Lara. This growing user base outside of the US signals the rise of a digitally connected middle-class in developing countries with appetites for international products, brands and goods.

With the rise of cross-border trade, FedEx Cross Border provides global e-commerce solutions, enabling international transactions for online merchants and consumers in over 200 countries and territories worldwide. They provide key information for cross-border trade as a service. For FedEx, business models are changing, and as a result, their business is, too.

“We used to make money transporting boxes, now we transport data,” explained Lara.

And if a large, established company can rethink their business model, then he explained that all companies must embrace disruption if they are to survive the coming shifts brought on by disruptive technologies of the 4th Industrial Revolution.

Differentiate

Lara noted that “talent is equally distributed, but resources are not.” He reminded the audience that the value of products is in their scarcity and originality.

He implored the audience to think about what differentiates your products – it could be a rare item from your country, or values associated with it – and to make that unique selling factor key to your product. Associating products with their country of origin also helps to protect against counterfeits or challengers.

Global e-commerce requires a global mind set

As cross-border trade is on the rise and opportunities are everywhere, Lara’s takeaway for entrepreneurs was clear: Think of your product or service as global from day one and keep a global mindset to take full advantage of cross-border e-commerce.

By Theadora Mills, @theadoramills

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3 key considerations for cross-border e-commerce startups

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