ABOUT CROSS-BORDER EC
What is Cross-border EC?
About Cross-border EC
Cross-border EC (Overseas Sales) is the sale of products and services from Japan (your country) to overseas markets via the internet on a B2C, D2C or B2B basis. As of September 2021, when the global cross-border EC market was affected by the spread of the new coronavirus infection, the global cross-border EC market is still growing at an annual rate of 30% and is forecast to reach US$4.82 trillion by 2026, and even in Japan, it is being promoted as a national policy that leads to sales channel expansion and sales increase beyond the domestic EC market.
While the number of Chinese and other foreign tourists who used to make inbound purchases has plummeted, Japan has been ranked as the 5th most popular destination for cross-border EC purchases out of 200 countries. (PayPal survey results)
In addition, cross-border EC is generally less risky and costly than opening a shop directly overseas or establishing a local subsidiary, and because the trading area is wider, it is possible to aim for overseas expansion while reducing initial investment. Therefore, it is necessary to actively use cross-border EC as an outbound measure to sell and export MADE IN JAPAN Japanese products to overseas markets.
Type of Cross-border EC
Own cross-border EC website
This is a mechanism to sell products to the world by building and developing your own cross-border EC site by defining the target countries and languages. It utilises EC platforms (EC carts) such as Shopify, Magento, and WooCommerce, which support multilingual, multi-currency, and overseas payment as a dedicated cart for cross-border EC, to build a BtoC-type online shop or a BtoC-type platform equipped with quotation and negotiation functions.
The main advantage of building your own website is that, compared to an e-commerce mall, there is no sales commission and only a payment system fee (around 3-4%), making it easier to make more profit. It is also recommended for businesses that want to increase the international visibility of their brand.
With your own site, you don't have to damage your brand. You have the freedom to set your own rules and regulations, you can also use your own promotions such as coupons and loyalty points to attract your own customers, you can also create a large number of static pages, categories, LPs (landing pages), blogs and news, other unique content to use as owned media.
In addition, the policy of cross-border EC malls about cross-border EC sales of alcoholic beverages, such as sake, is prohibited by overseas EC malls, so there are industries that must necessarily build and operate their own cross-border EC site.
Shop opening at overseas e-commerce malls / online exhibitions
In the case of the BtoC-type, you can open and display your products in EC malls where cross-border EC sales are permitted.The examples include Tmall Global (天猫国際), Kaola (考拉海購), JD Worldwide (京東全球購), Taobao (淘宝), eBay and Amazon, which are considered the two strongest EC in Europe and the United States, and Shopee and Lazada, which are strong EC in Southeast Asia.
For BtoB-type (Business to Business), Alibaba.com, Amazon Business and Thomasnet are the world's three largest online exhibition platforms, which are great if you can list your products on these platform.
BtoB corporate transactions are not a business model where you buy from an EC cart, but rather a system where Company B visits an online exhibition booth operated by Company A and conducts business negotiations to purchase the products they wish to purchase. If you build and operate a BtoB EC site on your own, it requires a large amount of construction costs, monthly fees, logistics infrastructure and a lot of manpower, but using a BtoB marketplace allows you to sell your products at a reduced cost.
Shop opening by utilising warehouse in Japan/ local warehouses (bonded zones)
The majority of cross-border EC shipments are generally sent from Japan, but if you have a large amount of stock, or if you are selling in China or elsewhere overseas in earnest, you can use your own overseas warehouses or bonded zones (mainly in China).
The goods are delivered in advance to a warehouse in a designated bonded area, and when a purchase is made on your online shop or e-commerce mall, the goods will be shipped from that warehouse to the customers.If you use a local warehouses, it is similar to the FBA used by Amazon overseas, which is a way to reducing delivery times and shipping costs.
If you receive and ship large volumes of goods on a daily basis, you may use a fulfilment service like the fulfilment service provided by j-Grab, where you store your stock in a designated warehouse in Japan, and when the goods are ready to be sold, the warehouse company picks up the goods, carefully packages them for international distribution, attaches the invoice and voucher, and ships them out promptly on behalf of your company.
Forwarding and purchase type
In the case of the forwarding type, you can open a shop in Japanese e-commerce malls such as Yahoo! Yahoo Shopping, Rakuten, etc., and have a Japanese forwarding company purchase the goods and ship them to the overseas buyer.
However, the final price is often higher than the selling price in Japan and the buyer is often reluctant to buy it, because the profit from the agency sale, high shipping and handling costs are added on. It is said that this model is difficult to be self-sustaining, as the seller often does not have access to information such as how much the product was sold to the customer, which country the product was sold to, post-purchase feedback, requests and reviews, as this would be a transfer or delivery of personal information.
In the purchase type, there is a "JAPAN MALL Project” supported by the Japan External Trade Organization. This is a project in which the products are introduced to the business partners' EC buyers for purchase, in principle, the products are delivered and purchased in Japan and the settlement are in yen. There is no need for complicated export procedures, but it is important to understand that there is no information about what was sold to whom and at what price, and no contact with the customer.
Negotiating with EC buyers is often a hard bargaining process, and when we negotiate a wholesale price of 5,000 yen for a general merchandise product with a domestic price of 10,000 yen, we often end up negotiating a much larger discount than expected, such as "I will buy 100 units for 300 yen". EC buyers are also at risk of buying and holding stock, so it is unlikely that they will be able to negotiate the desired wholesale price. It is best suited to businesses with high gross margin products and plenty of stock.
General trading EC sales / Operating your own website in another country
Although not part of the definition of cross-border EC, there are models of general trade EC sales, in which trade procedures are carried out between a domestic exporter and an importer in another country, as in general trade, and products are sold on EC malls and EC sites in that country, and there are also model in which you build your own website and operate your business in the other country.You need to have your products already well established in that particular country and be able to control the operation of the e-commerce site yourself
The Current State of Cross-border EC
In 2020, the size of the cross-border e-commerce market between Japan, the United States, and China increased in all three countries, with Chinese consumers making 1,949.9 billion yen in cross-border e-commerce purchases from Japanese businesses (increased 17.8% compared to last year) and 2,311.9 billion yen in cross-border e-commerce purchases from U.S. businesses (increased 15.1% compared to last year). This is a continuation of last year's increase.
The size of the global B2C cross-border e-commerce market is on the rise: in 2020, the global cross-border e-commerce market will be worth $994 billion, growing at a year-on-year rate of 20.3%. From 2021 onwards, due to the impact of the new coronavirus, the rate of EC has increased rapidly, with a year-on-year growth rate of 65% in the US and Europe (according to Adobe in the US, April 2021).
According to Accenture research, the global cross-border EC market is expected to reach approximately US$1 trillion (approximately ¥110 trillion) in 2020, and its share of total retail sales is expected to surge from 7.4% to 14.6%.
Global cross-border EC market size
Source:Ministry of Economy, Trade and Industry Market Research on e-Commerce
In terms of market size by country of consumption, the United States is in first place with $40 billion, followed by China with $39 billion and the United Kingdom with $12 billion. The number of users of cross-border EC also ranks first in China, second in the United States and third in the United Kingdom, showing the size of the market in China, Europe and the United States in cross-border EC.
Major BtoC Cross-border EC market size by countries
(Unit: 10,000 people)
Source: UNCTAD(2017)Information Economy Report 2017:Digitalization,Trade and Development
Major BtoC Cross-border EC market size by countries
(Number of users)
Source: UNCTAD(2017)Information Economy Report 2017:Digitalization,Trade and Development
Furthermore, according to estimates of cross-border EC potential between countries, the value of purchases of the US and China from Japan has grown significantly, clearly demonstrating the expansion of the global cross-border EC market and the popularity of "Made in Japan".
Estimated cross-border EC potential
(Unit: 100 Million Yen)
Source: Ministry of Economy, Trade and Industry Market Research on e-Commerce (2018)
In this way, the global cross-border EC market, particularly in China, Europe and the United States, is expanding and growing significantly due to the expansion of the Internet, the spread of smartphones, the enhancement of logistics systems, the diversification of payment functions and the development of infrastructure.
Not only in Japan, but also in the world, the rate of mail order purchases is rapidly increasing due to the new coronavirus infection and various social issues, and with the Tokyo Olympics and Paralympics scheduled to be held in 2021, and the government's re-launch of inbound and tourism, now is the perfect time to engage in cross-border EC.
International markets and initiatives
The US e-commerce market has been constantly evolving over the past decade and is expected to continue to grow steadily over the next few years. Sales are expected to exceed $590 billion by 2024. In the US, Amazon, eBay, Walmart, Apple, Target and Etsy are among the most popular.
United States of America
Source: Retail e-commerce sales in the United States from 2017 to 2024
Customer satisfaction with online retailing in the US is relatively high, with 78% of US internet users saying they buy products online and 32% saying they buy goods via the internet at least once a month. Within these, 29% shop online once or twice a week, or three to five times a week, and are frequent online shoppers.
The growing presence of mobile shopping among all age groups in the U.S. e-commerce market has made it imperative to build a "mobile-friendly" cross-border e-commerce site tailored to smartphone and tablet users, and it is no longer the case that a PC e-commerce site is just an "add-on".
Source: Online Shares of Rentail Trade 2015-2017
According to the Mastercard survey, one in four Europeans with access to the internet shop online at least once a week, more than 60% of them complete their shopping online once a month, and 6% buy products and services via the internet every day.
In the UK, Germany, France, Scandinavia, Spain, Italy and Poland, the apparel and footwear category is also the most popular product category, as are household appliances and books.
In Europe (EU), the most popular online sites are Amazon, Otto (like the German version of Amazon), John Lewis (electronics and household goods), Apple and Zalando (apparel and household goods).
In addition, Japanese culture is gaining in popularity and otaku culture, such as J-Pop, cosplay and figurines, is being recognised as Japanese fashion, and many events are being held across Europe to promote Japanese culture and products. In particular, research shows that 80% of orders come from Germany, France and the UK (which left EU).
Source: Bloomberg & National Bureau of statistics of China
China is now considered to be the world's largest e-commerce market, with an increasing presence in cross-border e-commerce transactions, about half of which are said to be via China. China has overtaken the US and EU in terms of online revenue, and the market has great potential and appeal, but there are many unique business practices and regulations, so it is necessary to understand the advantages and disadvantages before proceeding with cross-border EC business.
Some of the most popular sites in China include 天猫(T-Mall), 京東(JD.com), 淘宝網(Taobao) and 唯品会(VIPSHOP). Sales are particularly strong in the categories of household goods such as food, baby and children's products, health and beauty supplements and medicines, making it a huge market where Japanese products sell best.
There are over 350 million internet users in Southeast Asia (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam). More than 90% of Southeast Asia's population connects to the internet primarily via mobile devices, and this figure is expected to increase as faster and more reliable mobile services are developed and accessibility via smartphones becomes easier.
In addition, according to Google and Temasek, the rapid growth of the internet economy is expected to make e-commerce a $240 billion industry by 2025. Although the number of affluent people in Southeast Asia is increasing and infrastructure is improving, compared to the global EC market, the six ASEAN countries combined are only about 1/50th the size of the global EC market, and many are entering cross-border EC for investment purposes. However, it is a popular market for businesses that want to create their own market quickly in a market where competition has not yet grown, and the market is expected to expand rapidly in the future.
10 Challenges related to cross-border EC
In a situation where sales performance and name recognition are lacking at overseas, it is impossible to sell products simply because they are made-in-Japan, instead the key is to make the most of your domestic track record and name recognition, while reducing the amount of advertising to promote your business.
Many people think that Internet advertising means search advertising on Google, etc., but j-Grab have also taken measures to increase your businesses’ exposure and matchmaking by help you to open a shop in overseas EC malls such as eBay, which has 184 million active users per year. In addition, we will use our official Facebook page "JAPAN CRAZE" to promote your businesses through word-of-mouth marketing by foreign influencers (KOLs), and "j-Coupon", which distributes timely coupons exclusively for cross-border EC, to promote EC cart purchases. It is necessary to consider when, where and how much to spend on advertising, and then to use it proactively.
Legislative and institutional changes
In China's cross-border EC, the introduction of the cross-border EC tax system has been postponed for more than a year, and will be implemented in 2019, and other major changes to the tax system and regulations are frequently implemented. In particular, cosmetics, which are popular in cross-border EC, are required to be registered with the NMPA (formerly the CFDA-China Food and Drug Administration), and the tax system is being revised continuously. The possibility of sudden changes to the system that would be detrimental to your businesses cannot be ruled out.
Other of China, the legal system regarding cross-border EC does not change frequently, but it is necessary to keep a close eye on it on a daily basis to ensure that there are no problems if and when the legal system changes.
Food Import Regulations
Following the accident at the Fukushima nuclear power plant, imports of food, agricultural products and feed from 10 prefectures, including Fukushima, Tokyo and Tochigi, have been banned in order to ensure the safety of food and agricultural products exported to China from radioactive contamination. Other countries must be investigated to determine whether they can export on a country-by-country basis.
For individual investigation, it is necessary to carry out procedures with the latest information on cross-border EC and trade, such as checking with the consultation service of the Plant Protection Station and the Animal Quarantine Station. Basically, in cross-border e-commerce, proof of origin is not required for non-commercial exports, but the rules vary from country to country and are constantly changing. It is important to take extra care and seek advice from a cross-border EC or trade expert to ensure that you are not trading illegally.
Delivery times and costs
In cross-border ecommerce, it is important to keep the time between ordering a product and its delivery to the consumer as short as possible. Due to the recent surge of Amazon Prime members abroad, we take it for granted that our orders will be delivered the same or next day. Therefore, when a purchase is made in the cross-border e-commerce, it is compared not only in terms of delivery time, but also in terms of the total amount paid, including customs duties, taxes (such as VAT) and international shipping costs. A longer delivery times also increase the risk of cart abandonment and order cancellation.
In the case of food with a short shelf life, it is important to note that delays in delivery can lead to returns and complaints if the expiry date is exceeded or the consumption date is shortened.
Although most of the cross-border EC is conducted in English, there are times when it is necessary to deal with customers in local languages other than English. This is particularly important in China, where it is common to use social networking messaging tools such as WeChat for real-time chatting, and messaging tools provided by e-commerce malls.
In addition, it is not uncommon to have to routinely return goods that have been dispatched.The return rate is particularly high for clothing, and on Singles' Day (11 November) the return rate can be as high as 60 percent in the clothing sector. The rules of some Chinese e-commerce malls do not allow you to even open a shop in China unless you have a returns warehouse there, so you have to work with your Chinese partner. On the other hand, the rate of returns, refunds and complaints from Europe, America and South East Asia is often lower than in China, but you need to bear in mind that returns and refunds will occur, you will need to set the proper selling price and run the operation.
Exchange rate fluctuation risk
The impact of exchange rate fluctuations on sales is not small and cannot be directly controlled by the business, so many businesses nowadays sell their products in Japanese yen. The majority of cross-border e-commerce company websites set the product price in Japanese yen, which has no exchange rate fluctuation risk, and settle the transaction with the amount automatically converted to the buyer's home currency, such as dollars or euros.
However, in the case of your own cross-border EC site Shopify or Magento, you can decide the overseas price, so you can set the Japanese sales price of 10,000 yen products, such as 120 US dollars, and then receive the payments in foreign currency. There are also techniques to keep exchange and transfer fees low when transferring sales proceeds held in your payment account to your Japanese bank account.
There have been cases of people using other people's credit card details to place fraudulent orders on e-commerce sites. This is also the case in domestic e-commerce, but also not less in cross-border e-commerce, where credit cards issued overseas are used, so there is a greater risk of fraudulent use than in Japan.
In order to prevent fraud, it is essential that you take steps to mitigate the risk of fraudulent orders, for example by installing fraud detection systems and chargeback insurance.
Settlement of high value items
The maximum transaction amount for PayPal is 1,000,000 yen in Japan, and the transaction amount cannot exceed 1,000,000 yen for luxury brand goods. However, by implementing Stripe payments on Shopify or Magento, it is possible to carry out transactions in excess of 1 million yen.
In addition, many businesses wish to send money to a bank account for BtoB transactions, and it is necessary to have an overseas bank account for cross-border EC transactions. Even in B2C, when opening a shop on eBay, Amazon, Shopee, etc., you need to have an overseas bank account with Payoneer to open a shop.
In cross-border e-commerce, the distribution of unlicensed products has also become a serious problem, as buyers receive counterfeit products as a result of the diversification of sales channels, and are deceived by malicious sellers, and only some of the items in the package are changed to fake ones.
By introducing a service that allows you to verify the authenticity of your products, you can offer your customers peace of mind and improve your brand image. (Introduction Example: Canon IT Solutions C2V CONNECT, etc.)
Acquisition of trademark rights
Please don’t think that it is not related to you unless you have a strong brand. There have been a number of cases, particularly in China, where people being victimised by products that are not so widely recognised or known.
It is expensive to obtain trademark rights, but we encourage you to do so whenever possible. In addition, it is necessary to carry out a preliminary search in the target country to ensure that the trademark has not been acquired by another company prior to selling.
Cross-border EC Industry Trends
Implementation of the Electronic Commerce Law (China)
On 1 January 2019, China's first comprehensive law on e-commerce, the E-Commerce Law, came into force. The law aims to establish norms for e-commerce in China and protect consumers.
It clarified the definition and classification of e-commerce operators, the protection of consumer interests, the credit control rules for parties involved, the conditions of engagement and the penalties for non-compliance, which were very unclear in the past. One of the most important changes is that even sole traders who intend to resell their products will have to register as a business from now on (home-grown and handmade products are not eligible).
Alibaba, Jingdong and other e-commerce platform operators manage the credit information of the sellers on their platforms, and carefully review and register basic information about the sellers, and regularly review and update the information. This also applies to Japanese businesses, and is much stricter than the registration of Japanese e-commerce companies.
In addition, on January 17, 2020, the Ministry of Commerce, National Development and Reform Commission, the Ministry of Finance, the General Administration of Customs, the General Administration of Taxation, and the Certification and Accreditation Administration jointly announced the expansion of the number of cross-border EC (import and retail) experimental sites from 37 cities to 86 cities. Also, in May of the same year, measures to expand the scope of the special zone for cross-border EC experiments were announced, and the number of locations was expanded to 105 nationwide.
Influencer and KOL Marketing
There are influencers, or Key Opinion Leaders (KOLs), who have a lot of followers on social networking sites and can have a significant impact on the consumer's purchase of a product. Influencers introduce products in video or live commerce, and consumers who watch them actually buy the products, which has become a common purchasing behavior. According to the research by iResearch, the size of the e-commerce market via influencers in China reached approximately RMB 300 billion by 2020. In 2021 and beyond, the momentum remains strong, with many consumers buying products through influencer referrals. The most commonly purchased products via influencers are food and beverages (47%), clothing and shoes (45%) and cosmetics and beauty products (42%).
There is a close relationship between foreign visitors to Japan and cross-border EC. The Japan External Trade Organization (JETRO) conducted a questionnaire survey of Chinese consumers who have visited Japan in the past, and when asked "Why did you use cross-border EC to purchase Japanese products?”, there are more than 40% of respondents answered "Because I liked the products I bought when I travelled to Japan”. The experience of actually touching the products during their stay in Japan, being able to see them with their own eyes and recognising that they were trustworthy were the starting points that facilitated the use of cross-border e-commerce.
However, in the context of the spread of the new coronavirus, the number of foreign visitors to Japan has declined significantly, with the Japan National Tourism Organization announcing that the number of foreign visitors from China and the United States were 1.07 million and 220,000 respectively in 2020. In particular, there has been a marked decline in the number of foreign visitors to Japan from China, and this has been a major blow to the retail industry, which had been counting on inbound consumption. On the other hand, a JETRO survey on cross-border EC also suggests that cross-border EC has the potential to become a receptacle for inbound demand, and purchases on cross-border EC are increasing because visits to Japan are not possible.
However, if we consider the flow of people who learned about a product when they visited Japan and made a cross-border EC purchase, the decrease in opportunities to learn about a product is considered to be a blow to cross-border EC, and as a result, purchase opportunities for well-known products are increasing, while new products are struggling to gain recognition, which the market is polarised. The "revenge consumption" that is sure to come in the post-Corona and after-Corona periods is expected to occur in the next few years, it will be important to prepare well for cross-border EC sales now.
Click and Collect
Retailers with physical shops have seen a surge in the use of 'click and collect', where customers buy online and pick up in shop, in response to the spread of the new coronavirus and constraints on the logistics infrastructure nationwide. This has helped to fill the gap between supply and demand for existing logistics services, particularly as logistics are not be able to function since the "lockdown" is implemented overseas is in full swing.
Walmart, a large supermarket company, offers a very popular 'curbside pickup' service where customers can pick up their items in their car, where the customers don't have to go into the shop, just order online and drive to the shop at a specified time, then a shop employee will load the ordered items into the car. It offers a wide range of products, including fresh food, apparel, electronics and books, and is expected to grow as other retailers also begin to offer curbside pickup services.
Accelerating food EC market and physical shop closures
The food market is also growing rapidly in cross-border e-commerce, with an estimated market size of US$24.5 billion in 2020. Since the spread of the new coronavirus, sales in the food e-commerce sector have increased by 221.4% year-on-year, with people cutting back on eating in restaurants, buying and ordering from cross-border e-commerce, and opting more for takeaway and delivery.
The use of e-commerce has also expanded rapidly in the fresh grocery sector, which had previously been slow to adopt e-commerce due to consumer preferences for seeing and choosing products for themselves and the burden of delivery costs. In addition to 'Click and Collect', 'Instacart' partners with retailers and restaurants to offer last mile delivery. In the past, it was mainly the wealthy who used the service, but now it also attracting consumers who do not want to leave their homes, and the sales have grown by nearly 500% year on year.
The closure of physical shops has been a global phenomenon., including more than 25,000 in the United States alone due to the bankruptcy of department stores and apparel giants, has reduced the number of “shelves” available for sellers to display their products, forcing manufacturers to shift to e-commerce as a way to sell their products without relying on physical retail shops.
The relationship between the number of foreign visitors to Japan, which has declined significantly, and cross-border EC
Points to consider for cross-border EC
The future of cross-border EC
The Japan External Trade Organization (JETRO) conducted a questionnaire survey of companies on their willingness to expand exports, and found that the number of respondents who said they would "expand further" or "make new efforts in the future" dropped from 80.4% in 2019 to 76.7% in 2020. In the context of the spread of the new coronavirus, the willingness to export has decreased.
On the other hand, there is a positive attitude towards cross-border EC, with 35.9% of companies stating that they will expand their use of cross-border EC for overseas markets in the future in 2018, increasing to 43.9% in 2020. In the context of the spread of the new coronavirus, companies are less willing to export, but there is an increasing willingness to expand cross-border e-commerce, particularly among small and medium-sized enterprises.
Countries to enter for cross-border e-commerce
In the domestic survey on overseas sales destinations, China, the United States and Taiwan were the top destinations, followed by Singapore, Vietnam, Thailand, Hong Kong, France, Malaysia and Indonesia, with ASEAN countries coming in fourth and higher, indicating high expectations for ASEAN countries.。
However, China's cross-border e-commerce market has the world's largest number of entrants, and purchase prices are severely discounted, with only a few companies achieving the sales targets set by the entrants.
On the other hand, it will be necessary to respond to multiple countries with an eye on a wide range of target markets, such as Europe and the United States, which are stable and have low barriers to entry into cross-border EC, ASEAN countries, where consumer spending is expected to rise in the future as the economic scale expands, and Russia, where the market scale is rapidly expanding.
As the target market expands, so does the cost and effort required, so it is important to choose a cross-border EC platform that allows you to expand into multiple countries and markets in a one-stop operation, use a "cross-border EC specialist consulting company” or "cross-border EC one-stop service" that is familiar with cross-border EC and trade.
Choosing the right cross-border EC business model
There are multiple business models available for cross-border EC, but they can be divided into two categories: the "direct delivery" model, in which orders are shipped directly from Japan after the sellers received orders, and the “destination country delivery” model, in which stock is held in the destination country and orders are then delivered from a warehouse in that country. When selling products via the cross-border EC, what type of business model to choose is a troublesome consideration for businesses, but the important thing is the inventory risk.
As for the “destination country delivery” model, it is possible to deliver the products to the consumer promptly after receiving the order. However, the hurdles are much higher as the goods are exported to the other country by trade, which the general trade rules apply. The inventory risk and warehousing costs increase if sales are not satisfactory. The opposite is the case with “direct delivery”, where the inventory is held in Japan, reducing the inventory risk compared to store the inventory at the destination country.
However, there is a disadvantage in that it takes longer lead times for the goods to reach the consumer. It can be said that the choice between “direct delivery” and”destination country delivery” is left to the business operator's way of thinking, how to view the inventory risk and delivery lead time, but it would be good to make a decision while gathering the opinions of experts and consultants in cross-border EC.
Certification systems in the destination country
Certification schemes for products vary from country to country and must be thoroughly investigated and considered in advance. In the case of cross-border EC sales, in many cases product certification is not required for direct shipments from Japan, as they are treated in the same way as personal imports, but in some countries product certification is required even for direct shipments.
Setting the right selling price
Setting the right selling price is an important topic in cross-border e-commerce. The selling price is set by adding the necessary expenses and profits to the cost price, but based on the actual situation of cross-border EC sales, it is necessary to set a competitive price based on a comparison with competing local products.
Sales commission (margin) adjustments are also necessary. Setting a selling price is not always easy, especially at the start, when demand is often not visible. Many e-commerce malls and shops offer a "final total price including international shipping costs", but if this seems too expensive in the eyes of the consumer, they may hesitate to buy. You will also need to keep up with coupons, loyalty points and sales that take place at events, so you will need to set an appropriate selling price, taking into account the opinions of consultants and experts who are familiar with cross-border EC.
Clarification of the scope of responsibility in case of trouble
You must be prepared for the unlikely event that the goods do not reach the consumer, or if they do but the customers say they have not arrived, or that the goods are defective.It is advisable to anticipate specific events that may occur in advance and clarify the extent of your company's responsibility and to include this in your terms and conditions and on your product pages.
In the event of damage or defacement of goods in the course of delivery, it is necessary for the delivery service provider, such as Japan Post or International Courier, to provide compensation. If the goods are delivered without any damage or stain on the exterior, the seller will be required to take action. As different countries have different cooling-off and returns rules for e-commerce malls, it is also important to know how to deal with these, including the primary contact point.
Success VS. Failure companies in cross-border EC
In order to be successful in cross-border e-commerce, it is important to have a "serious" and "long-term" attitude.
One of the most common failure cases is that managers and superiors lumbered their subordinates or force them to be in charge for EC, such as "we don't know if we can sell it, so we'll just let people with no experience or available staff do it". This makes it not easy to achieve success in cross-border EC. You might be misled to believe that if you build a cross-border EC site or open a shop in an overseas EC mall or B2B online platform, you will be able to sell naturally like a "vending machine”, but in reality there are no examples of success case like what you believe.
It is a common consultation, "I have been asked by the company to produce results in three months to determine whether to launch a full-scale cross-border EC business.” which is also the case of failure due to the short-term perspective. It is important to take a medium to long term approach in cross-border EC, and to be prepared to achieve results in at least three years.
When running a cross-border EC, you may be given the task of managing a cross-border e-commerce site, while keeping your goals and field work intact. There have also been many cases of failures in which domestic EC operations have been converted directly to cross-border EC. Cross-border e-commerce requires a certain level of understanding of trade practices, as each country has different business practices. It is possible if you have staffs work for multiple project and cross-border EC concurrently, but if possible, you need to have a dedicated person who is able to deal with your overseas customers in a detailed and attentive manner.
Finally, it is also a common mistake to look only at "people who are good at or can speak English or Chinese" to be in charge of cross-border EC operations. In the cross-border EC business, it is impossible to keep up with the global EC market if you don't use the PDCA (Plan-Do-Check-Act) method of rapid hypothesis testing and constantly revise your course while monitoring the response. The key to success is to have people in charge who are able to make decisions about the business, rather than those who are language-oriented.