Cross-Border Ecommerce Growing at 25% Per Year

The gross merchandise value (GMV) of cross-border ecommerce is expected to continue growing at a healthy 25% per year through 2020, about twice the rate of the domestic market, and hit $300 million in 2015, according to a new report from Deutsche Post unit DHL Express.

The report also found that 20% of cross-border purchases are worth more than $200, again a higher rate than the domestic market, with high-value transactions growing at 2 to 3 times the global average in certain markets in Europe (Italy, Spain, France, Germany) and Asia (Singapore, Hong Kong, India).

DHL found that ecommerce merchants are seeing revenue gains of 10% to 15% by adding cross-border selling. Also, the report found, providing faster shipping options led to online sales that grew 1.6 faster than average.

“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 of DHL Express in a release. “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.”

While major ecommerce firms like Amazon and Walmart have set the standard in cross-border selling, companies of all sizes are seeing growth, DHL found. In particular manufacturers are seeing cross-border growth rates that are 1.3 times higher than retailers, while boosting margins as they cut out costs by selling direct to customer.

On the consumer side, shoppers are motivated to buy from offshore companies for three primary reasons, DHL found in the report: Greater product availability, a more attractive offering (including price), and trust of the brand.

While fashion and electronics are perennial leading categories for cross-border ecommerce, there is tremendous opportunity in a number of under-served categories, DHL found, including beauty and cosmetics, pet care, food and beverage and sporting goods.

The report is based on research and interviews conducted by McKinsey, as well as 1,800 responses to a survey of retailers and manufacturers in the U.S., China, the UK, Germany, Brazil and Singapore.

You can view the entire report here.

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