Canada’s adoption of a more restrictive threshold during its efforts last month to salvage a trilateral deal prompted Mexican negotiators to follow Canada’s lead, Economy Minister Ildefonso Guajardo said on Friday. The final version of the trade agreement will insulate retailers in both countries from facing greater competition from e-commerce companies like Amazon.com Inc and eBay Inc. The change was coming last-minute that it was not written into the agreement published last weekend. The new deal, called the United States-Mexico-Canada Agreement (USMCA), was meant by U.S. President Donald Trump to create more jobs in the United States.

U.S. negotiators originally pushed Mexico and Canada to raise import limits to the U.S. level of $800 from current thresholds of $50 and C$20, respectively. Traditional retailers in Mexico opposed such a big hike, fearing online companies would sell cheaper imports from Asia through the United States. Even so, Mexico initially agreed in August to raise the threshold on customs duties and taxes to $100 in its bilateral deal with the United States.

The Retail Council of Canada said the deal will protect retailers against a “massive change in the competitive landscape.” Mexico decided to follow suit, Guajardo said, favoring local clothing, footwear and textile industries, as well as the finance ministry that collects duties and taxes.

The post Final tweaks in North American trade deal keep lid on e-commerce appeared first on Cross-Border Magazine.

The goal of the agreement is to strengthen the cooperation and exchange of experience between the cross-border e-commerce platforms of both countries. Austrian companies, especially SMEs, can benefit from facilitating contacts with the major Chinese e-commerce platforms and thus be present faster on the Chinese market. According to the Austrian Ministry, there should also be support provided for the import and export of quality products and services through e-commerce platforms. “China is by far Austria’s most important trade partner in Asia, and the second most important trading partner overseas, after the USA,” says Schramböck.

The post Austria and China sign online trade agreement appeared first on Cross-Border Magazine.

Cross-border trade in Russia grew even harder than the total e-commerce industry, as it increased by 34 percent during the first six months of 2017. It is expected that cross-border e-commerce will account for 37% of e-commerce in Russia by the end of this year. This means it will be worth over 6 billion euros by the end of the year.

The Russian market has a huge imbalance between imports and exports. Alexey Fedorov, president of AITC, states that local sellers of appliances and electronics saw their revenues grow 11 percent, now worth 1.4 billion euros. It will squeeze out Russia’s online sales of small appliances and apparel within a couple of years if cross-border e-commerce keeps these growth rates.”

Russian cross-border online shoppers like to shop in China, which holds a 90 percent share of foreign goods ordered by Russian customers.

The post Russian E-commerce market worth 16 billion euro in 2017 appeared first on Cross-Border Magazine.

■ Cross-border shoppers in developing markets are increasing significantly. Forrester’s survey data show an increase in online adults shopping online across borders in many European and Asia Pacific countries. Online cross-border buyer growth in Latin America, Asia Pacific, Africa, and the Middle East will see double-digit compound annual growth over the next five years — significantly more than the growth in Europe and North America.

■ Marketplaces are increasing their share of cross-border sales. Cross-border shoppers prefer to use global marketplaces when they shop abroad.  Alibaba, which holds half of the online B2C market in China, increased its share of online sales from outside China to 7% in 2015.  In Japan, online marketplace Rakuten reported 41% growth in cross-border sales in 2015, more than twice the growth of the domestic eCommerce market.  In Germany, France, and the UK, more than half of cross-border buyers buy from Amazon and eBay.  

■ Cross-border shopping is becoming easier and faster. Free-trade zones (FTZs) in China lower taxes on imported goods. Bonded warehouses within FTZs allow retailers to ship goods across borders in anticipation of a sale, reducing the time to deliver to the consumer to just two to three days.  As cross-border shopping develops, cross-border buyers look to reduce shipping costs and delivery times by shopping closer to home. Forrester’s survey data shows for example that 38% of online cross-border buyers in South Korea bought from other Asian countries in 2015 up from 35% in 2014.

Price, Choice, And Authenticity Drive Cross-Border Shoppers
Consumers shop across borders to find cheaper goods, goods that are not available in their domestic market, or to shop at international retailers they can trust.  Although cross-border shopping often implies longer delivery times and higher delivery costs than for domestic purchases, the price (including shipping), choice, and authenticity of products drives consumers to shop across borders:

■ Price. A country's cross-border shopping correlates with the country's average price of goods. The higher a country's price level index, the higher the opportunity for online shoppers to find retail items cheaper outside their domestic market.  For example, domestic goods are expensive in the Nordic region and in Australia, which explains why more than 70% of Nordic shoppers and 80% of Australian online shoppers have purchased from abroad.

■ Choice. Larger competitive domestic online markets, such as Germany, France, the UK, and the US, inhibit the need for shoppers to buy goods across borders.  Online buyers in countries with small eCommerce markets, such as Russia, Mexico, and India, are more likely to shop across borders to find a better choice of goods. Canada is also a small online market; it’s less than a 10th of the size of the US. Given the convenience of having a large online market on its doorstep, it is not surprising that one-third of Canadian online retail sales in come from across the US border.

■ Authenticity. Product quality and authenticity are also important factors for cross-border shoppers, especially in India and China.  Chinese shoppers favour foreign brands over domestic brands notably for luxury goods, baby food, and beauty products.  Alibaba has recently undergone criticism for not managing counterfeit goods on its websites; this has hurt its reputation and further reinforced the need for online shoppers to buy across borders from recognized overseas websites to guarantee the authenticity of their purchases.

Retailers Must Embrace The Opportunities Of Cross-Border Shopping
Shopping across borders not only helps retailers understand new consumer needs, but it also helps logistics companies develop more efficient ways to deliver goods across the globe while improving the customer experience of the online cross-border buyer. Cross-border shopping helps retailers:

■ Develop a more integrated cross-border delivery network. Shipping costs are the most common reason in Europe for not completing an online purchase.  With half of all cross-border retail taking place between regions, online retailers are increasingly investing in global logistics solutions for efficient cross-border delivery. Both Alibaba and Amazon have made major investments in global supply chain infrastructure to facilitate cross-border retail.  Amazon is expanding its logistics operations in China to reduce logistics costs and make it easier for Chinese merchants and manufacturers to transport their goods to major hubs around the world.

■ Use online habits to drive cross-border habits. As in domestic online retail, apparel and accessories is the most popular cross-border category; one-fifth of the EU-5's online cross-border shoppers report that they've recently ordered clothes/accessories from a website outside their own country.  In Australia, which is a mature online cross-border market, the growth in cross-border commerce mirrors eCommerce growth.  Inhibitors to cross-border trade are similar to those associated with online shopping — whether that’s web interfaces that don’t adapt to the shopper’s preferred device, the inability to deliver content in their preferred language with their preferred payment and delivery options, or the lack of credibility and authenticity of the goods bought.

■ Identify gaps and opportunities within domestic online markets. Understanding the categories that cross-border shoppers buy helps identify gaps and opportunities within domestic markets. For example, it can highlight different prices for the same goods in different markets or how domestic markets don’t meet online shopper needs.  In 2015 only 17% of French online cosmetics buyers bought beauty products across borders, compared with 34% of their Italian peers.  Given that France is a key provider of premium cosmetics products to Europe, it is not surprising that French online beauty buyers are less likely to shop across borders than the Italians.  

This report uses data from Forrester’s Global Online Cross-Border Retail Forecast, 2016 To 2021 and from Forrester’s Consumer Technographics® surveys to understand online cross-border shopper behaviour. Michael O’Grady is a Senior Forecast Analyst at Forrester based in London.

The post Global Cross-Border Retail Will Triple Over The Next Six Years appeared first on Cross-Border Magazine.