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McKinsey Projects Cross-border E-commerce to Exceed $1 Trillion by 2030

McKinsey and Company published new cross-border e-commerce projections in its recent article “Signed, sealed, and delivered: Unpacking the cross-border parcel market’s promise,” quantifying the growth tied to a shopping trend we explored last year in our cross-border survey “Embracing the Cross-Border E-Commerce Opportunity.” McKinsey’s numbers verify what we expected: cross-border e-commerce offers a significant opportunity for retailers prepared to capitalize.

Graph: Cross border e commerce will grow to a $1 tr market in by 2030 with potential of double that size in a bold scenario

According to McKinsey:

“Even conservative estimates project that cross-border e-commerce in goods—the fulfilment and parcel dispatch of an order taking place in a country different from the customer’s final delivery destination—will expand to around $1 trillion in merchandise value by 2030, from its current value of approximately $300 billion (Exhibit 1). In a bolder scenario, e-commerce penetration of the total world retail market would approach today’s levels in China: more than 30 percent. If the cross-border share of e-commerce came close to 20 percent, the overall cross-border e-commerce market could total $2 trillion in merchandise value. We also expect cross-border supply chains to change significantly.”

This aligns with the results of our cross-border survey, which found:

  • 57% of online shoppers around the world made at least one online purchase from a company in another country in the last 12 months – while a further 22% considered doing so.
  • 43% agree or strongly agree that doing more online shopping in general during the pandemic means they are now more willing to consider cross-border e-commerce purchases.

While this presents a great opportunity for retailers, it’s not without its challenges. Again, from our survey:

  • 59% of online shoppers agree (24% strongly) they are less likely to give a company in another country a second chance if they make a mistake with their order.
  • 66% of respondents believe cross-border purchases will arrive later than promised.
  • 47% believe purchases are more likely to be damaged in transit.
  • 69% believe delivery charges will be higher for international orders.
  • 59% believe they will have to pay additional fees or duties which have not been made clear at checkout.

Meeting consumer expectations to provide a positive experience is paramount for sustained success. Luckily, we also identified seven factors likely to do just that:

Factors that would encourage cross-border purchases: Free returns (72%), online tracking (71%), no additional fees (70%), on-time delivery or money off (67%), local service/repair (64%), free support in native language (60%), buy now, pay later (54%)

Download “Embracing the Cross-Border E-Commerce Opportunity” to learn more about opportunities and overcoming challenges in cross-border e-commerce. Contact Logistyx to see how we can help.