Cross-Border E-Commerce and the EU Referendum

Cross-border e-commerce has become the next great bastion of opportunity for online retailers.

The UK e-commerce market has really caught light over the past few years and this ramping up of activity doesn’t look like its going to stop any time soon. The statistics bear this out with the UK e-commerce market totalling £60 billion in 2015 and expected to reach £90 billion by 2018, according to eMarketer’s latest forecasts. This means our market is the strongest in Europe and the third largest in the world.

Cross-Border E-commerce – What is it all about

With shoppers in the UK and Europe as a whole becoming more comfortable with e-commerce, many are now happy to buy from other countries. Subsequently, cross-border e-commerce has become the next great bastion of opportunity for online retailers. The statistics support this with cross-border e-commerce accounting for $230 billion of a total estimated $22 trillion in worldwide e-retail sales. By 2020, forecasters predict an annual growth of approximately 20 percent, bringing that number to over $1 trillion, or almost 30 percent of all B2C retail transactions.

Cross-Border trade in the EU

What do we actually mean by cross-border E-commerce

In short, cross-border e-commerce is effectively international e-commerce, i.e. when consumers buy online from retailers that are located in other countries, jurisdictions and territories.

So what are the opportunities presented by cross-border e-commerce and what’s driving all of the interest?

The benefits of cross-border e-commerce

The internet is 100% the enabler of the global marketplace. Consumers can shop globally by purchasing products and services across their border driven by factors such as a common language, a common border, special offers, or simply because the product or service isn’t available in the consumer’s own region. The increasing popularity of mobile devices like tablets and smartphones allows consumers to compare prices and select a web shop independent of location. Consumers can transfer payments via their PC, laptop, mobile phone or tablet, anytime, anywhere.

Cross-border e-commerce allows retailers to expand their business and can give an edge on competitors who are struggling to take this advantage. This expansions takes retailers into otherwise unknown or underexposed demographics, in particular, locations with a burgeoning economy. In an increasingly global marketplace even smaller retailers have indicated increased revenues due to the proliferation of international e-commerce.

The challenges of cross-border e-commerce

There are a number of challenges associated with cross-border e-commerce, from regulatory restrictions and the overabundance of payment options to the endless tax and liability variances throughout foreign territories.

Retailers need to understand local business customs, consumer preferences and cultural differences, all of which affect the decisions that need to be made around inventory management and product marketing. Marketing strategies are difficult to get right as it varies from country to country of what will work. Different infrastructure might also require local logistic and delivery services. Managing this range of variables is becoming ever more challenging, yet technology is going to be with us every step of the way, helping retailers take advantage of these growing markets. E-commerce platforms and providers continue to develop intelligent software which enables retailers to handle multiple markets, marketplaces and sales channels.

Consumers have high expectations around logistics and timely delivery and shipping costs are important drivers determining consumer preferences, and they also prefer to pay in their local currency, which has its only problems attached with it.


If you’re looking to expand then cross-border e-commerce is an ideal channel for most online retailers seeking to operate in new markets and territories overseas. The UK is leading e-commerce expansion throughout Europe and has become one of the top countries that cross-border shoppers are purchasing from. The mobile shopping market is also a big thing and retailers are eager to tap into its growth. PayPal reported that 59% of online transactions in the UK are made using mobile devices.

Moreover, in the digital retailing context, UK online consumers are already avid cross-border shoppers. So despite the challenges associated with cross-border e-commerce the reality is clear; cross-border e-commerce is the next big opportunity for online retailers.

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