Page 33 - GS200202

Education

websites offer better value and faster The technological barriers to shopping abroad are solved, but let's not overlook
shipping. They tend to visit South the discovery process. If you're in the United States and search for a product on
Korean, Japanese and French sites Google, domestic sites and local business are much more likely to pop up than
for beauty products. Taiwan, Hong foreign merchants. The same is true if you use local versions of Google abroad.
Kong, Macau and New Zealand are As far as we know, no search engine is designed for international ecommerce.
their go-to for food and drinks. Japa- That's a missed opportunity. Bottom line: cross-border ecommerce is vulner-
nese and U.S. websites are chosen for able but still growing. The opportunities for small merchants outweigh the
electronics. potential risks.

Notice the similarity: Both Chinese Defying economic nationalism
and U.S. shoppers turn to foreign The days when cross-border ecommerce seemed high-risk are gone. Even so,
sites for niche products that justify the rise of cross-border ecommerce might sound surprising to people exposed
the shipping costs. DHL calculates to daily news about protectionism and trade wars. Largely, consumers are not
that about 20 percent of cross-border entangled in these geopolitical schemes. Neither are ecommerce sites. Small
purchases are worth more than $200 and midsize merchants offering high-value goods have an opportunity to
(https://bit.ly/387ioyY). Basically, cross- expand in cross-border ecommerce. They will be more competitive than top 300
border ecommerce is a growing, retailers because the international market favors quality and distinctiveness,
largely untapped opportunity that not low prices and fast shipping.
favors boutique merchants selling
higher-value, non-commodity goods. The value of cross-border e-commerce is more than revenue though. It fosters
Barriers remain the exchange of culture, design, tastes and ideas. It pushes all merchants to
be more competitive, innovative and differentiated. The result will be a more
Cross-border ecommerce sounds like inclusive and efficient marketplace where small businesses can thrive.
an opportunity that's too good to be Ralph Dangelmaier is CEO of BlueSnap, a global payment technology company. Views are the
true. So what's the catch? The growth
– or decline – of cross-border sales de- author's own. To reach him, email rdangelmaier@bluesnap.com.
pends on politics, financial products
and technology. Duties are the main
lever in cross-border ecommerce. The
United States, for example, passed a
law on March 10, 2016, enabling U.S.
consumers to import $800 worth of
goods without paying duties. The
limit used be $200 and duties ranged
from an average of 33 percent to as
high as 110 percent of retail value.
This new law increased foreign pur-
chases, but it's fragile. If other coun-
tries don't reciprocate, U.S. merchants
won't make up for losses in domestic
sales with gains in international sales.
There could be a regulatory backlash
that disproportionately hurts mer-
chants who come to depend on for-
eign sales.

Financial products make a difference,
too. A host of credit cards aimed at
travelers wave foreign transaction
fees. They're nice when you're eat-
ing out in Paris but equally useful for
buying Parisian goods from your liv-
ing room in America. As more cards
and digital wallets eliminate fees for
foreign purchases, cross-border com-
merce will grow. That trend seems
unlikely to reverse.

33