LONDON–(BUSINESS WIRE)–New data from fintech research specialists Kaleido Intelligence has found that $1,120 billion will be spent by global online shoppers on international shopping websites and digital services in 2022. This will represent around 20% of total global eCommerce spend across physical goods and digital services.
According to Kaleido’s new report on B2C Cross-border eCommerce: Market Outlook 2021, regional growth of cross-border sales will outstrip domestic eCommerce growth in all regions. Cross-border eCommerce will witness an average annual growth rate of 14% over the next five years, compared to 9% accounted for by domestic eCommerce spend. The research found that cheaper goods and, importantly, shipping are key drivers behind cross-border growth.
Kaleido estimated high adoption of cross-border orders across Europe and Latin America; with cross-border eCommerce spend in both markets accounting for over 35% of total eCommerce spend in 2020, compared to a global average of 19%. Additionally, goods sourced from China and shipped globally are rapidly gathering pace: this has even impacted traditionally domestic eCommerce markets, such as Japan and Germany.
Marketplaces Key in Fuelling Cross-border Spend
The majority of the leading marketplaces are taking advantage of this growing opportunity to reach new global customers and markets. Kaleido forecasts that the total cross-border spend on online marketplaces will represent just over 70% of the total cross-border eCommerce spend in 2020.
The research found that cross-border marketplaces remain very strong versus retail websites, with Asian marketplaces proving particularly popular for both a regional and global audience. However, a notable exception was found to be North America, owing to the depth of retail and marketplace goods available domestically, leading to more specialised retail purchases when shopping from foreign merchants.
Cross-Border eCommerce Remain Unimpacted During COVID-19
The COVID-19 crisis has led to a worldwide increase in digital spend and looking forward, Kaleido believes that the longer-term growth trends in eCommerce will be largely unaffected by the pandemic, as migration will continue apace from the offline space. The research found that growth in cross-border eCommerce will continue in 2020, with transaction volume reaching 26 billion, up from 22 billion in 2019.
Nitin Bhas, Strategy & Insights Lead at Kaleido Intelligence added: “Despite the current economic climate, cross-border eCommerce has presented merchants with significant growth opportunities, across both retail and marketplaces. This means that offering a seamless user experience becomes the biggest challenge; including preferred payment options, removing language barriers and customer support, including returns and refunds.”