Are you ready for the cross-border e-commerce boom?
By 2018, global cross-border e-commerce turnover is forecasted to increase by 200%. Considering that in 2012, global cross-border e-commerce generated a turnover of 259 billion euros, that’s an astonishing amount.
E-commerce is on track to account for 5.9 percent of the worlds total retail sales, but that figure is expected to grow to 8.8 percent by 2014 — nearing towards $2.5 trillion in sales across the globe. Currently, the Chinese and U.S. e-commerce markets account for a combined 55 percent of global Internet retail sales. But with China’s attention turning to e-commerce innovation — largely accelerated by the record-breaking IPO of Alibaba — predictions are that China will account for more than 40 percent of global Internet retail, exceeding $1 trillion in sales by 2018.
We’re on the cusp of a global e-commerce boom, and the numbers are already increasing rapidly. It seems like a no-brainer — start selling online, and selling overseas because the market isn’t just demanding it, it’s screaming out for it. However, there are some pretty big hurdles the average retailer has to get over first. From arranging to work with local shipping suppliers, to processing offshore payments, there are some key considerations to deal with.
One of the biggest challenges retailers face is the fear of fraud. Whether it is global perceptions of corruption, crime and trust, or previous experience in dealing with overseas buyers, many retailers are hesitant to deal with shoppers from a number of countries. The trust problem is a big one and at present online retailers really only have these global perception indexes to go on, making blanket judgements. For instance, Brazil, Russia, India and China are perceieved among some of the most corrupt countries in the world. However, they also represent the 4 biggest emerging markets and a huge opportunity.
Veridu lets you determine trustworthiness at an individual level
A big part of the problem in emerging markets is the huge amount of people that are legitimate customers, but don’t have any credit history. This is just one of the many factors that lead retailers to simply exclude commerce in a whole country. But we think that’s the wrong thing to do, and a sad loss of business potential. Not everyone will defraud you, even if one country might be statistically risker than another. Instead, Veridu lets retailers make a judgement at the individual level, with every customer. By providing the retailer with an instant snapshot of a potential buyer’s trustworthiness — from whether they have given the correct details, to whether they are a fake profile, their credit card details don’t match or their online behaviour is fishy. This means online retailers can expand globally, with the safety net of knowing they will be able to filter out all risky purchases.
This might sound like a big extra administrative step, but it really isn’t. Shoppers log in with social profiles (including those with purchase histories like Amazon & Paypal), and their trust score is attached to their order for someone to approve or disapprove. At that stage, those scoring below a certain threshold can be flagged and required to go through a more detailed identity check. Or better yet, Veridu can automatically refuse to process any sales below a certain trustworthiness threshold to reduce the admin.
Global cross-border e-commerce is a huge growth opportunity for businesses, who don’t need to be scared of transacting with foreign markets. With Veridu, for only a few cents per verification, you can have the trust and confidence to expand globally, safely and take full advantage of the upcoming boom.
Originally published at www.veridu.com on April 6, 2015.