While international sales comprise less than one percent of total holiday sales by U.S. companies, cross border interest is increasing. On Black Friday, Chinese consumers purchased 38 percent more from American ecommerce merchants than they did in 2014, according to Pitney Bowes. On Cyber Monday, Chinese purchases increased 78 percent in value over 2014. Over the five-day holiday period, Chinese consumers spent an estimated $55 million in U.S. ecommerce websites.
Canadians bought only 3% more at U.S. websites than they did in 2014. Regardless of the sluggish growth, Canada remains the biggest online international market for American products.
Other nations have their own year-end vacations and American online vendors can benefit from the greater openness of foreign shoppers to purchase online cross border if merchants offer discounts that are enticing.
Boxing Day, a national holiday celebrated on December 26 in the U.K., Canada, and Australia, is often when the largest sales are available both online and in physical stores. Amazon’s U.K. website last year began Boxing Day sales on Christmas Day. But in 2014, Black Friday substituted Boxing Day since the biggest online shopping day in the U.K. with Amazon leading the way.
Shoppers at the U.K. increased their spending with a strong 37 percent on Black Friday. Amazon U.K. reported Black Friday 2015 has been its largest sales day ever with over six million items ordered. This is especially remarkable because Black Friday wasn’t introduced in the U.K. before 2010. Revenue at brick-and-mortar stores were slow, just as they had been in the U.S.
China has”Singles Day,” better known as Dual Eleven since it falls on November 11. It allegedly began on November 11, 1993, began by single students searching for a reason to buy themselves gifts and counter Valentine’s Day. The vacation really took off in 2009 when Alibaba, the Chinese ecommerce giant, produced Singles Day an online sales day.
In 2015, Alibaba ended what is currently the world’s largest shopping day — Nov. 11 — with earnings of $14.3 billion, 60 percent greater than 2014 and eclipsing the whole American November five-day holiday earnings record. Over the first eight minutes, consumers spent $1 billion on Alibaba’s two shopping platforms, Taobao and Tmall.
Taobao is one of two enormous shopping platforms from Alibaba that listed, jointly, $1 billion in sales in the first eight minutes of Nov. 11, 2015.
While Alibaba controls over 80 percent of ecommerce in China and gained a vast majority of earnings, other shopping platforms like JD.com and JuMei also engaged. American-based brands like Nike and Apple got in on the action via the purchasing platforms.
How Can U.S. Merchants Boost International Sales?
Canada and the U.K. would be the simplest for U.S. merchants to target since there is very little need for localization. However, the U.S. dollar has risen against the Canadian dollar for the past five years; it’s now worth $1.36 Canadian. This probably contributed to the apartment holiday sales thus far in 2015. However, American ecommerce merchants can sell to Canadian customers with little additional effort. The British pound has remained strong against the U.S. dollar and the British are eager to purchase American goods.
For sales in China, a number of the best U.S. manufacturers have abandoned their own sites and joined one of those Chinese platforms due to the advertising clout these platforms possess. While this works for big companies, it’s too expensive for smaller ecommerce merchants or brands.
By way of instance, Tmall Global — especially for businesses with no community Chinese physical existence — targets companies which have been operating for at least two years with annual sales over $10 million. Registration on Tmall demands a one-time security deposit of $25,000 and an annual fee of $5,000, and a commission fee ranging from 0.5 to 5 percent per purchase, depending on the product category.
After registering on Tmall Global, the foreign company must open an Alipay account to have the ability to get payment. There’s a 1 percent service fee for every transaction.
Until a couple of weeks ago, Tmall Global had little competition. But in April, JD.com, China’s second largest ecommerce participant, launched its global ecommerce platform, JD Worldwide. It has a partnership with Ebay that will allow selected vendors on the Ebay website to sell directly to Chinese consumers. JD Worldwide features both direct sales and market channels.
JD.com now partners with Ebay to allow selected vendors on the Ebay website to sell directly to Chinese consumers.
More competition may offer a more welcoming environment for smaller American merchants.
If smaller American merchants wish to target in their own sites Chinese consumers, it is helpful to have a Chinese language version. However, many Chinese are comfortable maneuvering around an English language website. Furthermore, some Chinese citizens who purchase regularly from U.S. merchants have connections with U.S. warehouses that specialize in shipping to China. They guide merchants to send bought goods to the warehouse, much like a rented post office box. Once packages arrive, boxes can be combined along with the Chinese purchaser is informed and the box is sent to China for a fee.
Borderfree, a division of Pitney Bowes, also provides a solution. Borderfree enables merchants to greet clients in their own language and supply local pricing and local transport services.
In terms of payments, in October 2014, Alipay launched ePass, a program which helps foreign sellers with money exchange, customs, and shipping logistics. Ecommerce merchants simply install it through an API on their sites. Borderfree now includes a partnership with Alipay ePass, further simplifying the payment procedure.
In summary, over the last two years it’s become much easier for American ecommerce vendors to reach Chinese consumers eager to purchase American products. Merchants can take advantage of the opportunity to achieve this immense market, especially during the holiday season.