Borderless shopping with Borderfree
E-commerce is expanding, worldwide. McKinsey has predicted that by 2020, 15% of e-commerce will be cross-border. Whereas today consumers still form only a small niche market for the global parcel-delivery companies, in 2020 as many as half of the...
E-commerce is expanding, worldwide. McKinsey has predicted that by 2020, 15% of e-commerce will be cross-border – and increasingly intercontinental, too. Whereas today consumers still form only a small niche market for the global parcel-delivery companies, in 2020 as many as half of the deliveries worldwide will be for consumers. And that will concern not only the sales through web stores, but also the commerce on e-marketplaces.
How can we make sure that Europa will manage to have more than its "fair share" in that global market? In the battle for online consumers, the U.S. and China appear to be well ahead of Europe and busy plundering our base. Consumers here are more and more apt to buy things through Amazon, Alibaba and Souq.
I love buying clothes in the U.S., where my size happens to be standard. In the past, after waiting many weeks for delivery, the products I had ordered suddenly ended up costing twice as much. If you order something from a website outside Europe you have to pay the import costs, customs duties, shipping fees and value-added tax.
The payment process hasn't been a problem for quite some time now, but there are still a lot of obstacles to the delivery on a global basis. The moment I click on "Confirm", I want to know what I can expect: a simple total amount in euros and a definite delivery date.
When I placed an order with Old Navy two weeks ago I was linked to Borderfree. There, you simply select "Netherlands" and "order in euros", and then at the checkout, you select DHL Economy or DHL Express. At that point it's immediately clear exactly what the shipping, import duties and customs clearance will cost you in euros. And your package will be at your door within a week. How much simpler can it get?
Borderfree takes care of the international customs clearance, the product classification, the screening of service-provider partners in the chain, the logistics services and the returns for U.S. web stores. Borderfree's customers include GAP, Bloomingdale’s, Macy’s and Neiman Marcus. They take care of all trade-compliance issues with some 100 Customs organizations worldwide in 60 different currencies. Borderfree is not yet active for European web stores.
European web stores need to form a united front in the battle between the major markets around the world. Otherwise they will lose their global market share in trade (and production) to the other markets.
European commissioner Neelie Kroes is fighting for the completion of the Digital Single Market by removing obstacles for international web stores. Impediments to the growth of e-commerce within Europe are the delivery problems involved in cross-border trade, the different national zip-code systems the various payment systems, the lack of reliable and affordable pan-European payment services and the confusing interpretations of consumer protection.
The digital internal market is necessary to ensure that European web stores will be able to maintain their position not only in Europe, but eventually also in the global markets. But that is most certainly not going to be enough and it all needs to happen much faster.
Global level playing field
Service providers such as Borderfree are simply getting rid of obstacles that prevent consumers from buying things literally anywhere. That makes me happy, as a consumer. It offers opportunities – but for the time being mostly threats – for the European omnichannel retailers. Competition can show up in ways you wouldn't expect. Before you know it, Europe will be left with worthless, tax-loving corporate headquarters.