As the world becomes increasingly interconnected, international ecommerce selling has also become much easier. That’s not to say that it’s easy for small and medium businesses (SMBs) to grow their business internationally, but rather that the solutions to certain obstacles have become more accessible.
For SMBs that plan to expand internationally, it’s crucial to have a better understanding of global ecommerce and how it’s grown over the years. This will prepare them with knowledge of what the future holds so they can go in fully ready to overcome whatever challenges they face along the way.
In this guide, we take an in-depth exploration of what global ecommerce is, how it’s evolved over the years, and what the future holds. We also share a few key steps to get started so you can confidently expand your business internationally. Let’s dive in.
What is global ecommerce?
Simply put, global ecommerce is the process of selling goods or services online to customers in a different country. It’s different from regular domestic ecommerce because the transactions take place across geopolitical borders instead of only within the country of origin. Goods are shipped from the country of origin to customers located in a different country, crossing international borders.
This allows merchants to expand their business to new markets and reach new customers. With the growth of ecommerce platforms and marketplaces as well as fulfillment solutions, it’s become much easier for merchants to get involved in global ecommerce.
Global ecommerce growth over the years
If you’re still wondering whether an international expansion is a right choice for you, looking at the global ecommerce growth over the years could help you make a decision. Let’s take a closer look at how global ecommerce has evolved in the past few years and what the future holds.
History of ecommerce
Michael Aldrich was a pioneer in the ecommerce industry, having introduced the first electronic shopping system in 1979. He used a telephone line to connect a transaction processing computer to a modified domestic TV. This enabled secure data transmission between two parties, thus setting up the foundation for modern ecommerce.
When the system was initially marketed in 1980, it was offered as a business-to-business solution. Thomas Holidays UK then became the first B2B online shopping system when it was installed in 1981. The first B2C online shopping system came later in 1984 when the Gateshead Shopping and Information Service (SIS) set up a system to computerize “home shopping” for pensioners.
In the same year, CompuServe launched the first comprehensive commerce service in the form of Electronic Mall, which was introduced in the U.S and Canada. The ecommerce landscape continued to see immense progress from 1990 onward with Book Stacks Unlimited introduced in 1992, allowing customers to place book orders through a dial-up bulletin board format.
Later in 1994, the business made it possible for customers to use credit card processing to buy books online through books.com and was ultimately acquired by Barnes & Noble. The next year, in 1995, Amazon was launched by Jeff Bezos, also primarily for selling books.
Current global ecommerce sales
Global ecommerce sales have been growing exponentially over the past several decades since the dot-com bust in 2000. The industry managed to hit $150 billion in 1999 when a significant portion (around 80%) of transactions was still taking place between one business and another.
As business-to-consumer transactions grew in popularity, so did the size of the global ecommerce market. By 2014, projected online retail sales in the U.S alone reached $294 billion–almost double the worth of the industry as a whole 15 years earlier.
Then when the pandemic hit in 2020 and people had to resort to online-only transactions, the industry saw even more explosive growth. Worldwide retail ecommerce sales reached $4.2 trillion–a 26.4% increase from the previous year.
Although we’ve stopped seeing pandemic-level growth, online retail sales have continued to grow albeit at a slower pace than in 2020. eMarketer projects that global ecommerce sales will hit $5.5 trillion in 2022, with year-over-year growth of 12.2%.
The future of international ecommerce
Global ecommerce will continue to see immense growth in the coming years, with sales projected to reach $7.3 trillion by 2025, according to eMarketer.
One of the trends fueling this growth is the Buy Now, Pay Later (BNPL) system, which enables shoppers to enjoy short-term financing for their ecommerce purchases. In fact, Klarna, the Swedish BNPL company, witnessed a massive increase in transactions in 2021, primarily due to growth in the U.S. The company currently has 90 million active users globally and almost doubled the number of transactions between 2020 and 2021, hitting $18.9 billion in the first quarter.
Additionally, reliable global fulfillment partners like ShipBob are also streamlining the international selling process with distributed fulfillment centers in different countries, thus helping fuel the growth. By leveraging these fulfillment centers, merchants can store their inventory closer to the customers, which allows them to keep the cost of global shipping low while ensuring faster deliveries even to international customers.
ShipBob also helps to alleviate many of the complications related to customs and import duties. This simplified international selling process makes it easier for small and medium businesses to enter the global ecommerce market, which will further support growth in the industry.
What about the supply chain crisis?
With the pandemic highlighting the need to create a lean supply chain and improve supply chain agility, ecommerce businesses have been adapting and improving to further support the industry growth. As a result, new software and service solutions have also emerged to better support the needs of global ecommerce businesses.
Companies are starting to shift their focus toward improving supply chain resilience. Many ecommerce brands are either bringing their global logistics operations in-house or partnering with reliable third-party logistics companies like ShipBob to mitigate disruptions to the supply chain. Distributed inventory and tech-enabled supply chain operations are among the top solutions to improve supply chain resilience and streamline international fulfillment.
As such, the global ecommerce fulfillment market continues to experience significant growth. In 2021, the market size was valued at $86.4 billion and is projected to reach $198.62 billion by 2030 with a compound annual growth rate of 9.5%.
4 steps for expanding internationally
For ecommerce businesses that plan to expand globally, there are many things that need to be considered, especially when it comes to international logistics. Here are the four steps to follow to grow your ecommerce business globally:
Step 1: Getting started
If you don’t already have an ecommerce business set up, that’s where you need to start. Follow this quick checklist to start your ecommerce business as you gear up for international expansion:
- Decide on the product/products you want to sell. Find something that offers a good profit margin and sees significant demand.
- Conduct research on the market and the competition. See how others are conducting their business, marketing and pricing their products, which channels they’re using, and how to proceed with fulfillment. This can be used to inform your business strategy.
- Start your business. Establish your brand with a solid name and logo. Then set up your ecommerce website.
- Market your business to the right audience. Make sure you’re using the right channels and delivering your message in a way that resonates with your target audience.
- Go for launch! It’s time to take your business live and start selling your products.
Step 2: Fulfillment
One of the most complicated aspects of global ecommerce is getting the goods from one country to the other. Since goods have to cross international borders and (in most cases) travel longer distances, there are additional implications associated that you may not necessarily find with regular domestic fulfillment.
As a result, the international shipping process can be very complicated. First of all, cross-border order shipping is more expensive so you have to be extra careful about entering the right weight and dimensions. Since packages have to travel longer distances and through multiple transportation methods, there’s also a higher risk of damage in transit. There’s a need to carefully pack your goods to mitigate this risk.
Longer distances mean longer transit times, which means your orders could take longer to get delivered to your customers. Not to mention the additional lead time associated with customs holds. On the same note, customs and import duties can result in additional cost-related implications.
Considering all of these challenges, it’s crucial for ecommerce merchants to find a reliable international fulfillment partner to streamline the international shipping process. By handling the entire fulfillment process for you, an international 3PL simplifies the process of delivering goods to customers in different countries.
Ideally, you should be able to use a distributed network of fulfillment centers in different countries. This will allow you to store your inventory closer to the delivery destination, which means that orders have to travel for shorter distances. Not only does this keep your international delivery costs low, but it also ensures faster deliveries, so you can get the goods to your customers as early as two days.
Step 3: Growth
Once you have your ecommerce business up and running, it’s time to gear up for growth. You can start by expanding your operations to just a few selected markets until you’re eventually ready to reach almost every viable ecommerce market. For example, you may be able to start by expanding your business to North America, but you should eventually expand your operations to the European market to reach even more customers and make even more sales.
Working with reliable service providers and supply chain partners is an absolute necessity to support this growth. Your suppliers should be able to handle the growth in demand that comes with selling your products to even more customers, for example.
Additionally, leveraging advanced tech stacks is essential so you can make informed, data-driven decisions. For example, leveraging the ShipBob software will allow you to make accurate predictions about future demand based on historical sales data. This enables you to adjust your procurement planning to meet the changes in demand so you can avoid stockouts and obsolete inventory.
You can even expand your business to support wholesale ecommerce. ShipBob’s B2B Fulfillment Suite makes it easy to distribute your inventory to approved retail businesses, allowing you to tap into their established customer base and sell your products to even more customers and helping you grow your revenue exponentially.
Step 4: Growth without borders
As your ecommerce business scales, you may eventually want to achieve further growth by expanding to global markets. However, this comes with a certain set of challenges, especially with regard to global shipping. Transporting goods from one country to another is not only expensive and time-consuming, but it can also come with several legal implications.
That’s where working with a global fulfillment partner like ShipBob solves all those major challenges. With years of experience in global fulfillment, ShipBob has the expertise to manage complicated paperwork associated with international deliveries. This takes a huge load off your back, helping you save time and resources. Moreover, ShipBob’s long-standing relationships with leading carriers and pre-negotiated carrier rates help you further keep costs low so you can focus your resources where you need it the most.
Where is ecommerce growing the most?
The Asia-Pacific region sees the most growth in ecommerce sales, with the Philippines and India contributing the most ecommerce activity. This is mainly due to the larger population distribution in the region, which would naturally result in higher levels of economic activity.
According to Statista, the Asia-Pacific region contributed to 51% of global retail sales in 2020 and the number is expected to reach 61% by 2025. North America is the second biggest contributor and is expected to contribute to 26% of global retail in 2025. Europe comes next and is projected to contribute 19% of global retail in the same year.
For ecommerce businesses that plan to expand their operations globally, tapping into these leading markets can improve their chances of success. To effectively expand to these markets, it’s also important to find a fulfillment partner that can fulfill all these regions. With a distributed fulfillment network spanning major ecommerce markets, ShipBob helps you efficiently fulfill ecommerce orders in Australia, Canada, and Europe (including the U.K) so you can get a strong start on global ecommerce.
How ShipBob has helped businesses expand globally
If you’re ready to grow your ecommerce business globally, ShipBob is the international 3PL you need. You can take advantage of our expansive fulfillment network to manage a distributed inventory and strategically store your goods closer to your customers, which allows you to speed up delivery times and lower costs.
Our powerful proprietary software comes with robust order management tools so you can get real-time visibility into your order status and manage everything from a single dashboard. You can also keep track of your inventory levels in real-time, place timely inventory reorders, and make predictions on how much inventory you will need in the near future.
By delivering a seamless end-to-end customer experience, ShipBob allows you to grow your business exponentially across borders. Here’s how we’ve helped top DTC brands to expand globally.
When Black Claw started to expand globally, they had to work with three different 3PLs in the U.S, U.K, and Canada. This involved setting up different ecommerce stores for each additional 3PL and additional investments that proved to be cumbersome. After consolidating international fulfillment to ShipBob, Black Claw has managed to streamline their global ecommerce operations through four ShipBob locations in three countries.
“I always wanted a truly global fulfillment partner — I had been trying to find this solution for years. ShipBob has multiple fulfillment centers in the US, one in Canada, one in the EU, and one in the UK, and all locations filter back into one centralized warehouse management system.– Wes Brown, Head of Operations at Black Claw LLC
The Adventure Challenge
For The Adventure Challenge, 25% of their sales are international. Leveraging ShipBob’s ever-expanding global fulfillment network has helped them to meet the demands of international consumers in a much more cost-effective way.
“With new locations being added all the time, ShipBob will help us service customers in more and more countries around the world over time.”– Aaron Patterson, COO of The Adventure Challenge
When ShipBob started to expand to Canada and Europe, Ombraz decided to move their inventory along. This helped make international fulfillment more seamless, reducing paperwork and minimizing cost related to international shipping.
“It’s a pain to pick, pack, and print the labels, and manage the storage. It would be a huge stress for us to do it ourselves, but the fact that ShipBob takes care of it all, both the savings in costs and time, is invaluable to our business.”– Nikolai Paloni, Co-Founder of Ombraz Sunglasses
Do you need a fulfillment partner that can advance your global ecommerce strategy? Get started with ShipBob by requesting a quote below.
Global ecommerce FAQs
Here are answers to the top questions about global ecommerce.
What is the size of the global ecommerce market?
According to the latest reports, the global ecommerce market is currently worth over $13 trillion.
What are the benefits of global ecommerce?
Global ecommerce allows businesses to grow their operations and tap into new markets, resulting in more customers and higher revenue.
What is the growth rate of ecommerce?
The growth rate of the global ecommerce market changes from time to time but is expected to grow by 50% over the next four years.
Does ShipBob help with global fulfillment?
Yes, ShipBob provides global fulfillment services so you can enjoy faster deliveries, distributed inventory, and discounts with major shipping carriers.