Cross-border ecommerce is expected to grow at 25% until 2024, but the biggest problem is the high shipping fee for customers
Hong Kong-based Buyandship is now focussing on India and has signed up local partners for last-mile delivery
The primary focus for the company is establishing a base in Delhi, Mumbai and Chennai by 2020
India’s love for online shopping has also pushed a portion of customers to become early adopters for products from overseas. In fact, Amazon India has a dedicated ‘Global Store’ which ships products from across borders to India, and if you have ever visited the Global Store you would know that it offers products that are not available in India, due to companies deciding not to enter the market.
With cross-border ecommerce on the rise, the geographical boundaries are getting blurred. Furthermore, cross-border ecommerce is expected to have a global growth rate of 25% annually, for the next 3 years.
But the biggest challenge here is that the addressable market is limited because consumers want the best products from international markets but do not want to or cannot afford to pay the high shipping fees and import duties, which are often inflated for electronics and other such products. A Global Ecommerce Study found that though 73% of Indian consumers shop cross-border, the high shipping cost is one of the top three reasons for abandoning orders.
To minimise the issue of shipping costs and to mitigate border and other logistic issues, cross-border ecommerce companies are setting up separate warehouses in different countries so as to be flexible for deliveries around the world. Further to this, the freight forwarders also need to carefully consolidate and de-consolidate countless parcels being moved together.
This is where automation and machine learning are changing the game by helping ecommerce companies make decisions faster about where to move inventory. The clever way to do things in cross-border ecommerce is importing goods into a country in bulk to reduce the shipping cost per item.
This is where cross-border ecommerce logistics companies such as Buyandship come in. Founded in 2014 by Sheldon Li, Hang Poon, Wilson Chan and Wong Tsz Ming and based in Hong Kong, Buyandship is expanding to other parts of Asia including India.
Customers can choose to get international shipping of products from merchants in ten countries. All that the customer has to do is pay $6 per pound in shipping fees, and sit back and wait for the parcels at home.
While the logistics market earlier was dominated by DHL, FedEx and UPS, the likes of Alibaba, Amazon, Walmart among others are pushing into the field with tech innovation and automation to improve logistics, which directly impacts their core business. Not only do tech companies have a more future-proof logistics network, but they also understand that consumers are willing to wait longer for certain internationally-shipped products if it means lower shipping and other extra costs.
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The Cross-Border Journey Of Buyandship
Irked by the lack of affordable international shipping and the high cost of importing items, the founders came up with the idea of Buyandship. The company’s focus has been on customer satisfaction by making the process more affordable.
The founders told Inc42 that its foray in India comes as a result of the massive potential of the market size and the changing retail landscape. This has led to the rapid growth of cross-border ecommerce in the Indian context, but there is room for improvement in terms of the final price the consumer pays.
Buyandship has established a network of self-operated warehouses in the US and Japan, and dedicated warehouses in the UK, Korea, China, Taiwan, Australia, Italy, Thailand. Scheduled flights from these warehouses to the central warehouse in Hong Kong brings the product closer to the delivery region and from thereon Buyandship’s regional partners take over. The shipping fees paid will be based on the parcel’s actual weight (not parcel size), which is where customers can save their hard-earned money.
It has partnered with eBay Hong Kong, StockX, GLADD, Drop, and other merchants to deliver exclusive offers to more than 370,000 Buyandship members in Asia. To onboard these merchant partners, Buyandship’s dedicated merchant team understands their objectives and proposes a customised solution for each market they are targeting, followed by the execution strategy and getting the business done.
Buyandship streamlines the logistics experience with an advanced warehouse automation system, and a “one-click buy” tool to shop from across borders by 2020. It currently has a presence in China, Japan, Taiwan, Singapore, Malaysia, and the UAE and is looking to enter new countries, including Australia and Thailand later this year.
Although India presents a great opportunity, the relatively strict regulations for the import of goods is one of the biggest challenges to the company, especially as many of the users are unaware of the levies and customs duty. Its target audience in India is aged between 25 to 45 and the primary focus until 2020 is to create a strong base in Delhi, Mumbai and Chennai.
Of course, the freight forwarding has plenty of competition in India, thanks to the country’s steep customs duty on many imported products. Competing with other freight forwarders such as MyUs, Parcl, Shipito, Buyandship’s founders told us that the USP of the platform is that a customer can ship parcels from ten countries, and enjoy free-of-charge consolidation service to save shipping costs.
However being a newcomer in the market has its fair share of challenges – particularly in attracting customers. Buyandship offers a free trial programme to give the potential audience an experience of their service and minimise their doubts about cross-border ecommerce.
The Cross-Border Ecommerce And Buyandship’s Future
While India’s ecommerce sector has driven the digitisation movement across industry, the massive $200 Bn market (Deloitte India-Retailers Association of India report) still faces challenges of logistics and last-mile delivery for some products. And cross-border ecommerce is very much in that category at this time.
Not surprisingly, technology has revolutionised the logistics sector as well. With its warehousing automation technology in the US, Buyandship managed to reduce the turnaround time for parcel handling. It also leverages data analytics to understand the purchasing behaviour of customers and their shopping patterns, to deliver personalised offers, products and deals to the customers and bring greater value.
Cross-border ecommerce has definitely opened many doors for businesses to expand their audience and serve a larger pool of customers. However, in India where the gap between those who have shopped online and those who haven’t is so large that the opportunity to grow cross-border ecommerce lies largely in metros and Tier 1 cities as internet penetration and tech adoption grows further in Tier 2 and 3 cities, the pool of customers would expand.
SMBs and MSMEs are also getting onboard the cross-border ecommerce train as the demand for products outpaces the feasibility of big ecommerce players to serve the entire market. The challenges of high shipping fee and logistics are being solved with technology and innovation as well as a collaboration between corporates such as logistics companies and startups such as Buyandship. But the opportunity is massive as more Indians start shopping online, and start getting exposed to products from overseas.