Illustration by Craig Hopson
Global ecommerce is many things: cross-border commerce, borderless business, international online retail. But more important than what it is, is what it isn’t.
Global ecommerce is not a luxury. It’s not one strategy among many. But going global is a necessity.
Unfortunately, it’s also fraught with questions: Where to invest? What countries present the best product-market fit? How do you attract non-local buyers? Which is most important: translation, currencies, payment options, or something else entirely?
This guide will give you an inside look at global ecommerce, with tips on how you can expand into the market.
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- What is global ecommerce?
- How big is the global ecommerce market?
- Global ecommerce sales growth
- 7 global ecommerce trends defining 2022
- Supply chain resilience
- Mobile shopping and social commerce
- Cross-border buy now, pay later adoption
- The metaverse and interactive shopping
- APAC and China ecommerce growth
- Language localization
- The wholesale industry is going online
- It’s time to go cross-border
What is global ecommerce?
First things first: global ecommerce is the selling of products or services across geopolitical borders from a company’s country of origin, normally defined as its founding or incorporating location. Products or services are sold into non-native markets via online sales and marketing.
Cumulative data anticipates a 16.8% increase in worldwide ecommerce sales over the most recently tracked period.
Numbers of that scale are hard to wrap our heads around. They’re at once invigorating and daunting. If your company is staring down that $4.9 trillion barrel and wondering, “Where do we begin?” rest assured, you’re not alone.
The advantages of international ecommerce are:
- Easier expansion into foreign markets
- Easier-to-find product-market fit
- Shorter B2B sales cycles
- Quicker building of international presence
- Lower barriers to entry
As Harvard Business Review wrote: “Business leaders are scrambling to adjust to a world few imagined possible just a year ago. The myth of a borderless world has come crashing down. Traditional pillars of open markets—the United States and the UK—are wobbling, and China is positioning itself as globalization’s staunchest defender.”
We’ll unpack that quote, and more, below. For now, the big idea is simple: the shadow of global ecommerce looms too large to ignore.
How big is the global ecommerce market?
The global ecommerce market is expected to total $5.55 trillion in 2022. That figure is estimated to grow over the next few years, showing that borderless ecommerce is becoming a profitable option for online retailers.
Two years ago, only 17.8% of sales were made from online purchases. That number is expected to reach 21% in 2022, a 17.9% increase in ecommerce market share over two years. Growth is expected to continue, reaching 24.5% by 2025, which translates to an 6.7 percentage point increase in just five years.
Global ecommerce sales growth
Global retail sales growth will continue to rise and take up more retail market share. According to eMarketer, online retail sales will reach $6.17 trillion by 2023, with ecommerce taking up 22.3% of total retail sales.
Although retail had a tough year in 2020, every national market covered by eMarketer saw double-digit ecommerce growth. The trend continues:
- Latin America saw $85 billion in ecommerce sales in 2021, up 25% from $68 billion in 2020.
- The Indian ecommerce market is expected to grow to $111.4 billion by 2025, up from $46.2 billion in 2020.
- Russia, the UK, and the Philippines saw more than 20% ecommerce sales growth in 2021.
China continues to lead the global ecommerce market, accounting for 52.1% of all retail ecommerce sales worldwide, with total online sales just over the $2 trillion mark in 2021. It also has the world’s most digital buyers, 824.5 million, representing 38.5% of the global total.
The US ecommerce market is forecasted to reach over $875 billion in 2022, a little over a third of China’s. After China and the US, the third-largest ecommerce market is the United Kingdom, taking up 4.8% of the retail ecommerce sales share. The UK is followed by Japan (3%) and South Korea (2.5%).
The top five ecommerce markets haven’t changed since 2018. Trends from eMarketer suggest that these markets will stay in the top five until 2025.
Casey Armstrong, CMO at ecommerce fulfillment brand ShipBob, adds, “While a lot of focus in ecommerce centers around the United States and Canada, there is a lot to learn from other large international players who are seeing an even more accelerated growth rate in ecommerce.”
He adds, “Merchants can shift where they sell based on this data and the demand on ecommerce from these countries. At ShipBob, it’s why we have opened fulfillment centers in Canada and the UK and are about to open another in Australia.”
7 top global ecommerce trends to watch
1. Supply chain resilience
The impact the COVID-19 pandemic made on supply chains was, according to Morris Cohen, Wharton Professor of Operations, Information, and Decisions, “a major disruption, along the lines of having an earthquake or tsunami.” For decades, the core features of supply chain management were:
- Low-cost supply
- Minimal inventory
When the coronavirus broke supply chains around the world, it drove companies to focus on building supply chain resilience, or to think of ways to keep supply chains from halting and restoring them quickly when they do.
Experts predict that systems won’t “normalize” until 2023 at the earliest. Even once they do, the pandemic has exposed global logistic network vulnerabilities to future political instability, natural disasters, and regulatory changes.
The effects of COVID-19 were not an exception to the rule: Supply chain disruptions are happening with increasing frequency and severity. McKinsey reports that significant disruptions to manufacturing production now occur every 3.7 years, on average.
So what are retailers doing to build supply chain resilience and combat disruptions? Retailers like American Eagle are buying supply chain companies. The clothing retailer recently purchased Quiet Logistics, a company that runs eight fulfillment centers across the US, for $350 million. It was the second largest acquisition for American Eagle after buying AirTerra, a shipping solutions provider, in August.
These acquisitions suggest a shift coming across the retail sector. Brands that were comfortable outsourcing logistics to third parties are now bringing those operations in house to mitigate supply chain disruptions.
There are [some experts] who think that supply chain problems are the new normal. There are other global crises afoot that are going to affect how global manufacturing happens. There’s no reason to think that this system is not going to be susceptible in the future to other problems.”
—Rebecca Heilweil, Supply Chain Reporter
2. Mobile shopping and social commerce
The COVID-19 pandemic made a significant impact on ecommerce trends around the world. With brick-and-mortar stores shuttering overnight, shoppers flocked to the internet to buy their things. Experts say the pandemic accelerated the shift to online shopping by as much as five years.
M-commerce, or mobile commerce, involves shopping online through a mobile device, like a smartphone or tablet. M-commerce will continue to break out over the next few years. Technological advances like branded shopping apps, 5G wireless, and social shopping make it easier for people to shop on their phones.
In 2021, mobile shopping from Shopify merchants captured 71% of online sales via mobile over BFCM.
Online retail continues to expand due to the increasing use of smartphones and tablets globally. In 2022, smartphone retail ecommerce sales are expected to pass $432 billion, up from $148 billion in 2018. Mobile shopping apps are becoming more popular amongst retailers and shoppers, with one in five US shoppers reporting using them multiple times per day.
Another facet of mobile shopping, social commerce sales are set to triple by 2025. While only 30% of US consumers report purchasing goods through social platforms, nearly half of China’s consumers already shop on social, generating over $351 billion in sales over 2021.
The competition is on the rise, with 49% of brands investing in social commerce content in 2022. Expect more branded shopping apps, more SMS and Facebook Messenger marketing campaigns, and more social commerce content on TikTok and Instagram.
3. Cross-border buy now, pay later adoption
The buy now, pay later (BNPL) trend shows no signs of slowing down. Well-established brands in Europe have begun their move into the US and various global markets. JP Morgan reports that “mobile, cross-border and buy now, pay later are on the rise as consumers show a willingness to adopt new shopping and payment methods.”
Klarna, a Swedish-based BNPL company, reported a sharp increase in transactions using its platform in the January to March 2021 quarter, fueled by growth in the US. Klarna’s gross merchandise volume (GMV) nearly doubled to $18.9 billion in the first quarter, from $9.9 billion one year prior. The number of US shoppers using Klarna doubled to 17 million in April 2021, experiencing a 125% increase in downloads.
Mobile, cross-border, and buy now, pay later are on the rise as consumers show a willingness to adopt new shopping and payment methods
In Australia, 30% of the adult population owns a BNPL account, with strong uptake from younger shoppers. Neighboring New Zealand also reported significant increases in BNPL usage. About 75% of people deferring payments are under 45, but there has also been a bump in shoppers over 60 using BNPL services.
BNPL is also expected to improve Japan’s cross-border shopping experience. Domestic brand Paidy partnered with PayPal in 2021 to allow Japanese shoppers to access Paidy through their mobile wallets. The partnership allows Japanese consumers to use Paidy at any international checkout that accepts PayPal.
Other notable mentions include:
- BNLP is most popular in Germany, taking 30% of all payments. That number is expected to reach 33% by 2024.
- BNLP is expected to grow by a compound annual growth rate of 36% in Vietnam from 2021 to 2028.
- BNLP brand Twisto has 1.6 million users across the Czech Republic and Poland, and is expanding into Eastern Europe in 2022.
- Nelo, a fintech company run by former Uber executives, raised $3 million to expand BNLP services into LATAM.
Buy now, pay later will become a common sight at checkouts around the world. As partnerships begin to form between BNLP brands, digital wallets, and banks, BNLP will take the lion’s share of payments globally.
4. The metaverse and interactive shopping
Brands are betting on virtual shopping and experimenting with augmented and virtual reality retail on different platforms. The metaverse, a 3D virtual world, eliminates borders for consumers. People around the world can experience products in a metaverse no matter where they live.
Nike and Gucci have launched fashion shows inside the multiplayer game Roblox. Adidas has launched an NFT collection with the famous Bored Ape Yacht Club and launched interactive experiences on South Korean social avatar app Zepeto. Balenciaga started selling apparel in Fortnite. Beauty brands like Charlotte Tilbury have built virtual stores in their online store.
“One of the biggest trends is really just consumers being willing to spend money for virtual goods,” says Corey Svensson, who runs Crypto and Blockchain at Shopify. Corey feels that the pandemic stimulated consumer interest in the metaverse, explaining, “It’s part of the greater curve of adoption that’s just going to naturally happen.”
Jason Wong, founder of Doe Lashes, agrees. Brands in the metaverse can reward shoppers through giving away non-fungible tokens (NFTs). “I want to give you a Doe token, because you’re our customer, and the Doe token gives you access to X, Y, and Z,” Jason says. He describes a recent NFT drop from clothing brand The Hundreds, where 25,000 NFT tokens were given to customers. Holders get access to merch drops and a number of other benefits.
“I think The Hundreds is the first mover here, and a lot of brands will actually follow,” Jason says. “The challenge is a lot of brands are so focused on running their physical and their DTC store that they probably don’t have the bandwidth to shift into investing into these things.”
5. APAC and China ecommerce growth
By 2023, retail ecommerce sales in Asia-Pacific are projected to be greater than the rest of the world combined. This is due to: (1) rapid urbanization and technological advancements; (2) more than 85% of new middle-class growth residing in APAC; and (3) a host of government and private-led initiatives in China.
China’s ecommerce sales totaled an estimated $2.1 trillion in 2021, more than double the US market.
On the B2B front, manufacturing in APAC and China has undergone a renaissance. As a result, the B2B disparity is even clearer.
Entering China—and to a lesser degree APAC as a whole—presents a handful of thorny challenges:
- China causes sites on foreign servers to load painfully slow, dragging down onsite conversion rates and search engine rankings.
- Advertising and social content via Facebook, Instagram, YouTube, and Google are unavailable in China, even though Chinese companies are able to enter western markets.
- Chinese consumers use ecommerce.
To capitalize on this global ecommerce trend, Shopify partnered with Chinese ecommerce giant JD.com. Now, US businesses with Shopify storefronts can list their products on the Chinese marketplace, used by over 550 million shoppers.
JD.com will handle the fulfillment process, transporting goods from its US warehouses to China via cargo flights to complete deliveries. The partnership reduces the process of selling in China for foreign brands from 12 months to three to four weeks.
6. Language localization
Over 67% of global consumers surveyed by Flow.io said they’d made a cross-border purchase in their lives. Almost one in five respondents stated that lack of language translation was a big barrier to purchasing on a foreign site.
Amongst English-speaking shoppers, over two-thirds of respondents said they would not purchase from a site not translated into English. In Japanese and South Korean markets, where cross border commerce was lowest, that number rose to 41% and 36% respectively.
Amongst English-speaking shoppers, over two-thirds of respondents said they would not purchase if the site wasn’t in English.
Going native with your site’s language—beyond Google Translate—can make or break global sales. It creates a good customer experience from first impression to checkout.
In fact, in terms of website content, the majority of shoppers in Flow.io’s report agreed that the following pages needed to be in their own language:
- Product descriptions (67%)
- Product reviews (63%)
- Checkout process (63%)
Based on a survey of 8,709 global consumers in 29 countries, CSA Research found that 65% of consumers prefer content in their language, even if it’s poor quality. Moreover, 40% will not buy from websites in other languages.
This last finding bears closer examination. Localization can often feel overwhelming, like an all-or-nothing endeavor (either everything has to be country-specific or why bother?). It’s not.
The respondents’ focus on navigation and “some” content means that a site need not invest in holistic translation from the jump. Getting heavily scrutinized areas of a site right is critical: headlines, product titles, etc. Only after you’ve gained traction does full-scale translation using a native copywriter and local idioms make sense.
7. The wholesale industry is going online
Last year we saw the evolution of B2B ecommerce take place, attracting the attention of buyers, sellers, and investors from all over the world. Statista’s recent B2B ecommerce report shows the rise of vertical and specialized marketplaces for B2B buyers and sellers. Modern Retail reports that consumer-oriented retailers and brands have increasingly been investing in third-party marketplaces.
The trend has made its way into wholesale ecommerce, too. Wholesalers like UNFI are launching marketplaces on their sites. In the US, the wholesale marketplace Abound, with a mission to connect independent and small retailers with specialty wholesalers, raised $23 million. In France, wholesale marketplace Ankorstore, which operates in the same category as Abound, raised €82 million in May 2021.
In the past, retailers and brands relied on trade shows to make connections with wholesalers and buy products. Jeff Kolovson, COO of wholesale marketplace Faire, told Modern Retail that “while consumer buying behavior began to shift online many years ago, the wholesale industry remained offline.” Wholesale marketplaces like Handshake can connect buyers with wholesalers in minutes and receive products fast after placing an order.
It’s time to go cross-border
If there’s one thing all the above data, reports, and trends reveal, it’s that global ecommerce isn’t a choice—it’s a necessity. The future of your company’s growth, maybe even its survival, depends on it. That’s why we created a step-by-step framework for going global the right way.
It’s not a luxury. It’s not for multinational conglomerates. And it’s not just one among many growth strategies. Global ecommerce is a necessity, and something to take advantage of for your brand.