Cross-Border Markets Around the World with Transport Intelligence

Apr 14, 2022

Did you know that 55% of online shoppers made a cross-border purchase in 2021?

As its name suggests, cross-border e-commerce is the selling of goods and services to an international audience through online stores. With the rapid adoption of digital payment tools and the increasing popularity of online marketplaces, the cross-border logistics and fulfillment space is evolving at a faster pace than we have ever imagined. According to the leading research firm Valuates Reports, the global cross-border e-commerce market size is estimated to reach a whopping USD 1508700 million by 2027.

The Global E-Commerce Logistics 2022 Report by Transport Intelligence (Ti) provides detailed insights into cross-border markets around the world based on growth data and forecasts from 2021 to 2026. The report also addresses some key trends and developments facing the markets in 2022 and beyond. Let’s take a look!

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Growth of the Global Cross-Border Market in 2021

The US Contributed 78% of Cross-Border Revenue in North America

Contrary to popular belief, North American customers make fewer international purchases than their counterparts in other regions, with their cross-border market share standing at 14% of their total online purchases. North America’s cross-border segment is also significantly smaller than that of the domestic segment, representing roughly 13.2% of the total market last year. Such low figures reflect the wide availability of goods, as well as the maturity and competitiveness of the domestic e-commerce markets in that region.

Among the countries, the US has been the largest revenue contributor to North America’s cross-border market, accounting for around 78% of the total segment value in 2021. This could likely be due to recent investments in outbound fulfillment operations across the country. DHL, for one, expanded its California distribution center last August to enable smoother processing of international packages. Around the same time, they also established export gateways dedicated to cross-border shipments in select US states

Interested to know the top 10 US e-commerce retailers by market share? Download the full chart below (exclusive to Parcel Monitor members).

Germany Accounted for 28.5% of Europe’s Cross-Border Market Share

The 2021 cross-border e-commerce logistics market in Europe was valued at €12,710m, with Germany representing around 28.5% of the total market share. Based on results from a recent Eurostat survey, 32% of online shoppers in the region have bought or ordered goods from other EU countries in the last year. Moreover, the survey also found that the 16-24 age group had the highest percentage of shoppers buying goods from e-commerce stores outside the EU (26%), as well as from other EU countries (35%).

Mainly driven by their desire for growth, many domestic players in the region are seeking territorial expansion to nearby geographies. In recent years, a growing number of them have invested in both services and facilities to simplify supply chains and reduce operational costs. One prominent example is the expansion of day-definite e-commerce delivery services by FedEx to accommodate the greater e-commerce parcel volumes in Europe

China Took Up More Than Half of Asia-Pacific’s Cross-Border Market Value

Meanwhile in Asia-Pacific (APAC), China currently dominates the cross-border e-commerce logistics market, taking up the majority (56.4%) of the total segment value (€23,596m). According to Ernst & Young’s October 2021 data, cross-border e-commerce in China rose by 31.1% year-on-year, largely owing to the maturity of the landscape, coupled with the presence of overseas in-country warehouses and logistics networks that help to enhance the efficiency of the market.

Despite the steady progress in recent years, several challenges remain when it comes to China’s cross-border e-commerce relationships with Western markets concerning tax compliance. Most are linked to the complex tax regulations in the US and the reformed value-added tax (VAT) rules related to cross-border e-commerce that were enacted by the EU in July 2021. During Q4 2021, Alibaba’s international retail businesses experienced a combined order growth of 25% year-over-year, but this was partially offset by a decline in orders for AliExpress in Europe, as a result of the VAT on cross-border packages below €22.0 in value.

Investments and Partnerships in the Cross-Border Logistics and Fulfillment Space  

While many European players have chosen the path of geographical expansion on the back of smooth trade within the EU, investments and partnerships seem to be the preferred route among those outside the region. Ultimately, these options have enabled several companies to have a presence abroad without having to foot the high costs of setting up and maintaining cross-border last-mile networks

Alibaba, for instance, has held shares in Southeast Asian company Lazada since 2016, allowing it to meet demand within the area. More recently in April 2021,it also provided the largest e-commerce platform in Turkey, Trendyol, with an additional investment of $0.3bn (around €0.3bn). In terms of partnerships, Cainiao reached an agreement with GLS Spain last October, under which Cainiao can leverage the latter’s extensive network of branches, centres and parcel collection stations throughout the country. The service was first piloted in early August 2021 and currently serves around 100 Spanish merchants.

Similarly in North America, Amazon is investing in five new buildings to support operations in the metro Detroit area, strategically located at the US-Canada border. A new, 244,000 sq ft automated hub in Hamilton, Ontario (Canada) is another major DHL investment in the region. Meanwhile in Mexico, the global logistics firm DHL is looking to make significant investments in first and last-mile shipment processes, with 105 self-service kiosks to be installed at retail counters for customer convenience.

Cross-Border E-Commerce In 2022 and Beyond

Even with the potential difficulties as mentioned above, there is still a large upside within the future of cross-border e-commerce. In Transport Intelligence’s view, well-thought-out government policies along with structural reforms are key to encouraging the global growth of the cross-border logistics industry. Some of their suggestions include i) Customs and regulatory consistency across regions, ii) Regionally coordinated e-commerce and logistics standards to help out new businesses, and iii) Developing a consistent postal network and address system – within country and region.

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About Transport Intelligence

Ti Insight is a leading logistics and supply chain market research company providing strategic market intelligence to the logistics and parcels industry through its:

  • Supply Chain and Logistics Market Research Reports

  • Global Supply Chain Intelligence (GSCi) online knowledge platform

  • Consulting and Market Research projects

  • Training, Conferences and Webinars

Ti aims to provide its subscribers with a vision of how the logistics market will develop over the next year, 5 years and 10 years with quantitative forecasts and qualitative insights for each timeframe. Ti has acted as advisors to the World Economic Forum, World Bank, UN and European Commission as well as providing expert analysis to the world’s leading manufacturers, retailers, banks, consultancies, shipping lines and logistics providers.

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