Global ecommerce is many things: cross-border commerce, borderless business, and 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. 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.
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.
Recently updated forecasts anticipate a decline in growth of just a 9.7% increase in 2022 for worldwide ecommerce sales over the most recently tracked period. The same chart also forecasts declines in growth over the next few years will be minimal.
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 $5.7 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 reported: “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 $5.7 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 20.8% in 2023, a 2 percentage point increase in ecommerce market share. Growth is expected to continue, reaching 23% by 2025, which translates to a 5.2 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 research completed by eMarketer and Statista, online retail sales will reach $6.51 trillion by 2023, with ecommerce websites taking up 22.3% of total retail sales.
Although retail has had it tough since 2020, every national market covered by eMarketer saw double-digit ecommerce growth. The trend continues:
- Latin America (including Peru, Brazil, Argentina, Chile, Colombia, and Mexico) saw $104 billion in ecommerce sales in 2022, up 22.4% from $85 billion in 2021.
- The Indian ecommerce market is one of the top 5 fastest growing countries in the world, sitting at 25.5% growth in sales in 2022.
- The UK is forecast to continuously increase by $85.7 billion (+42.88%) within the next years.
China continues to lead the global ecommerce market, accounting for 46.3% of all retail ecommerce sales worldwide, with total online sales just over the $2.8 trillion mark in 2022. It also has the world’s most digital buyers, 842.1 million, representing 39.4% of the global total.
The US ecommerce market is forecasted to reach more than $904.9 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 for 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.”
Set up your international ecommerce strategy
Setting up an international, omnichannel ecommerce strategy can seem intimidating, but there are a few key areas that, if you address them as a priority, can help you succeed.
The areas to focus on are:
- Pricing. When it comes to pricing, two issues present themselves for international ecommerce retailers: currency conversion and how to handle promotions. Regarding the former, it’s worth researching how customers perceive pricing in the country you’re targeting. In the West, it’s common for prices to end in a 9, whereas in countries like China, it’s best to use a round number.Regarding promotions, according to McKinsey & Company, businesses should use a wider range of factors to determine price sensitivity (especially in foreign markets). In addition, effectively and profitably linking pricing and promotions together can increase revenue and profiles by three to five percentage points overall.
- Payments. Thankfully—thinking about what payment methods are relatively simple for international ecommerce—you’ll need at least a credit/debit card processor, such as Stripe, and mobile wallet options, like Apple Pay and Google Pay, as well as a buy now, pay later (BNPL) option. You can set digital payments up manually, but Shopify Payments has all the options you need.
- Customer service. Customer service is important no matter which part of the world you’re servicing. According to research from GRIN, 46.75% of surveyed customers said customer service is an important part of their ecommerce experience. Common types of communication for CS in most countries include phone, email, and live chat.
- Shipping and logistics. How your buyers will receive your products is a huge factor to consider, as it’ll likely be expensive. So to make shipping internationally successful, think about removing as much friction as possible. That includes researching price options with carriers, offering shipping speed estimates, researching relevant taxes, and simply preventing some products from being sold in certain countries.
Get a head start with Shopify Marketplace
In 2021, we launched Shopify Markets, and this year we released an upgrade to this feature, called Shopify Markets Pro. This new feature helps businesses manage overseas sales by simplifying complex areas such as compliance, tariffs, shipping, and conversions. On average, merchants in North America using this feature sell to 14 other new markets.
6 top global ecommerce trends to watch
1. Global inflation pressures
For customers worldwide, inflation has become a leading concern for 40% of respondents—above poverty and social inequality (31%), unemployment and jobs (26%), and coronavirus (12%).
While people are still spending money, global brands are not exempt from the pressure of inflation. As such, if you’re planning to use cross-border ecommerce, you’ll need to consider the impact of inflation in different countries.
Speaking to Glossy in a recent interview, Olaplex CEO JuE Wong explains how even with net sales increases of 38.6% in Q2 2022, Olaplex isn’t immune from global inflation, macroeconomics, and geopolitical situations. As a result, JuE Wong says while the business is cash-rich, they’ll be investing in technology (such as ecommerce solutions) and technological capabilities to help advance growth.
With this concern in mind, it’s worth researching the inflation rates of the countries you’ll be targeting and potentially revising your pricing strategy using the data you gather.
2. More consumers will shop on their smartphones
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 take up 6% of total retail sales, a jump from 4.1% in 2019. 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 more than $351 billion in sales in 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. A new mix of marketing channels
In recent years there have been exciting advancements in several areas of advertising—including access to new marketing channels.
Social commerce has been on the radar for the past five years, with the release of Facebook and Instagram shopping features, and, more recently, TikTok shopping.
However, as an extension of social commerce, live shopping has started to become more popular as the strategy has soared in China. The live commerce market in China was at $2.27 billion in 2021 and is expected to increase to $4.92 billion in 2023.
As for other countries, live commerce is just starting to emerge as a marketing channel. For example, 20% of online shoppers in the US said they’d participated in live commerce, while a further 34% said they haven’t participated but had heard of it.
Another new marketing channel coming on the horizon is connected TV advertising—which refers to ads you’ll find on platforms like Hulu, Roku, and YouTube. The perception of these ads by customers are largely no different to that of linear/cable TV, but comparing the two customers found ads on streaming services to be better.
Hoka is an athletic footwear company that recently launched a global ad campaign using connected TV platforms, and reported a 68% increase in website visitors and a bump in followers on social media platforms.
4. A struggling global supply chain
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 COVID-19 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.
The effects of the coronavirus were not an exception to the rule: Supply chain disruptions are happening with increasing frequency and severity. Levi’s saw its biggest year-over-year loss in Europe in 2022, where revenue decreased 19% from the same period in 2021. McKinsey reports that significant disruptions to manufacturing production now occur every 3.7 years, on average.
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.
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
5. Growing sales in China and APAC
By 2023, retail ecommerce sales in Asia-Pacific are projected to be greater than in 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 $2.8 trillion in 2022, 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 can enter western markets.
- Chinese consumers use ecommerce.
To capitalize on this global ecommerce trend, Shopify partnered with Chinese ecommerce giant JD.com. Now, US ecommerce businesses with Shopify online stores 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. Creating content for consumers in their local language
Fifty-seven percent surveyed by PayPal said they currently shop internationally. Almost two in five respondents said they’d made an international purchase in the past three months.
However, amongst English-speaking shoppers, over two-thirds of respondents in a study from Flow.io 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.
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.
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.
Global Ecommerce FAQ
How big is the global ecommerce market?
According to The Global and United States Ecommerce Market Report and Forecast, the global ecommerce marketing size is worth 7 million in 2022 and is forecasted to grow to to 20 million by 2028 with a CAGR of 17.
How do I start a global ecommerce business?
1. Determine your target international markets and how they will support business growth.
2. Understand target market needs, for example preferred payment methods.
3. Create a plan for market entry.
Is ecommerce important to a global business?
Ecommerce can support and facilitate international trade, ease business deals, and help businesses better understand market demand.