UPS: American businesses forgoing billions in cross-border e-commerce

Cross-border trade is still where the smart money is in the e-commerce market, but American businesses are largely missing out on this growth opportunity. Tandem reports released by UPS suggest that trade policies and attitudes in the United States are costing domestic businesses billions of dollars in lost revenues from cross-border e-commerce and trade.

If Americans don’t look beyond their own borders, they will lose out to countries such as China, which have embraced the economic reality of global trade. With, global e-commerce sales are projected to reach US$4 trillion by 2020, this market represents what UPS calls a “tremendous growth opportunity.”

In a second report, UPS found that almost half of the economies along the north-south air cargo trade lane in the Western Hemisphere are looking for new international suppliers, suggesting that “there is an opportunity for exporters to find new buyers,” according to the 2017 UPS “Business Monitor Export Index Latin America” (BMEI) report.

UPS found that, despite the immense potential of cross-border e-commerce (1.6 billion digital buyers worldwide), less than 1 percent of America’s 30 million companies export. A lot of these companies are mom-and-pop businesses, where it’s not viable to do so, but China’s global export share climbed to 14.6 percent in 2015, well ahead of America’s 8.9 percent.

Taken in conjunction, the two reports suggest a that U.S. business of all sizes are far less global than one would expect, given the country’s strong neoliberal political bent of over the last four-plus decades – the current administration aside.

U.S.-based Importers surveyed by UPS were the least proactive, with “one out of three (31 percent) indicating they do not contact suppliers.”

While extending international supply chains is a more complex (but potentially cost-saving affair), UPS suggested three ways that U.S. businesses could get in on the cross-border e-commerce game.

• Offer a localized shopping experience that includes regional content control, pricing and promotions, language translations and currency conversions.
• Streamlined international logistics, including delivery within 2-8 business days
• Specialized customer service, including international returns solutions and multilingual agents.

The U.S. is blessed with one of the most linguistically diverse populations in the word, which in a global market is an asset that should be leveraged. Meanwhile, UPS found that 43 percent of global consumers were willing to shop internationally for unique non-local products. With 80 percent of global purchasing power beyond U.S. borders, it makes sense to think globally.