Leaders from Amazon, PayPal and Shiprocket discuss challenges brands face in cross-border business and how to overcome them at Shiprocket SHIVIR
New Delhi: E-commerce export are expected to reach $200 billion by 2030, according to a Federation of Indian Micro and Small & Medium Enterprises (FISME) study. Encouraged by the improved business environment which includes better support from the government, easing of regulations and duties and the reach of the digital channels are enabling small and medium companies to now target the exports markets as well.
According to Siddhant Rana, market development lead, India and South Asia, Shopify, cross border is now at that inflection point where India is expected to see a lot of growth. “Last year, more than 70 million international buyers came to a Shopify store based out of India to buy a product,” he said adding that this was a testament to the growth the space was experiencing. He was speaking in a panel discussion on cross-border e-commerce potentials at the Shiprcket SHIVIR held on Friday at the Pullman Aerocity in New Delhi.
“This is the right time for e-commerce cross borders to think vertically horizontally in every format,” Kriti Gohal, manager of global exports, Amazon said. She said the US ecommerce titan covers more than 200 countries through its more than 18 marketplaces. She added that Amazon has a customer base of more than two million people who have joined hands with Amazon or who are in the process of working as exporters.
However, Anirudh Bhagchandka, founder, goGlocal a company that helps Made in India businesses unlock their global potential said exporters should be prepared to face challenged enroute and they should be patient to reap the benefits over time. “Exports is not a walk, it’s a hike you need to be well-prepared for your hike.”
Bhagchandka added that there are several touchpoints such as customs that are beyond anyone’s control. “When you are talking about cross-border, it is the same for a large and a small enterprise. Success depends on how well you are equipped to manage these touch points which are not in your control,” he said.
According to Akshay Ghulati, co-founder, of strategy and global expansion at Shiprocket, trust is an extremely important factor in doing business outside India. He informed that in the last three years since Shiprocket has ventured into cross border, the landscape has changed drastically.
One of the most fundamental problems businesses have to solve in international business is payments. Why should a buyer sitting in the US, UK or in Australia trust a seller coming from a small city in India? Even if a brand is well-known in India, it may not be known abroad. “That’s where brands like PayPal come in because we have a two-decade history of trust and when consumers see the PayPal yellow button on a website, we know that the propensity of the buyer to go ahead and make the payment goes up by like 54%,” said Chandni Nihalani, director, at PayPal India that has 400 million customers and 35 million merchants around the world.
Integrating with the right payment platform that can give a business global acceptance with a single integration is another factor to consider. Since it’s hard to forge local partnerships in every country, having one trusted payment partner who can open up the world giving buyers the flexibility to pay in their local currency matters.
“Businesses need to consider how they can solve for risk and fraud because the Holy Grail of payments is security, outside of convenience,” she added. All these factors combined help cross-border grow forward if they have the right payment partnership.
Besides the payments, technology, operations and marketing are things that businesses need to get right according to Rana of Shopify.
Sharing his experience selling internationally for the last 10 years Nitin Kapoor, chief executive officer and co-founder, IBA Crafts said that the regulatory environment for cross-border e-commerce has been changing for the better making it easier for businesses to go global.
“The Government is taking a lot of initiatives promoting cross-border trade. It is also streamlining regulations and plugging loopholes for Indian sellers to get into e-commerce,” he said.
He quoted two such initiatives which involved allowing Indian businesses to ship parcels across the globe without any duty. The other is the increase of funds under the Market Access Initiative (MAI) Scheme by 25%.
All the speakers acknowledged the significance of shipping as the backbone of cross-border e-commerce. “A reliable shipping option has to be there to ensure that the customer is getting the product on time and the seller is getting price point which they are able to deliver the product,” Kapoor said.
Shipping to international markets is puzzling but the right shipping partner can smoothen the entire process and make things easy. Speaking about a growing trend in this section, Bhagchandka of goGlocal feels drop shipping will be a game changer that will help businesses make the most of this $200 billion opportunity.
“Drop shipping has enabled the supply chain from India. It has enabled sellers not to take inventory risks and ship out when they get an order. Easing of dropship compliances would be another growth factor along with the enablers which will help make cross-border from a hike into a walk,” concluded Bhagchandka.
Shiprocket SHIVIR 2023 was the meeting ground for more than 100 speakers, over 1000 attendees and over 500 brands. The summit offered unparalleled opportunities for knowledge-sharing and networking.