Brazil is the largest and most mature ecommerce market in Latin America. However, it is not a market without challenges. While most of the country's population has engaged in cross-border purchasing, they require a high-touch approach and access to flexible and regionally specific payment methods in order to convert. As Brazil continues to rank in the top 10 ecommerce countries by sales volume, the market provides a wealth of opportunity if you can overcome its barriers to entry.
Due to Canada's proximity to the United States, its population is very familiar with making cross-border purchases. In fact, Canada outranks both its neighbours to the south for cross-border purchases per capita in North America. While Canadians eagerly embrace international brands, there are multiple regulatory considerations to factor before expanding into the market. Foreign Merchants must manage and meet compliance with requirements such as sales tax regulations and the nation's official language act, which requires mandatory packaging information to be shown in both French and English.
While China is most commonly thought of as an exporting country, the population has a healthy appetite for cross-border consumption as well. One survey conducted between 2020-2021 found that 67.1% of respondents have made cross-border purchases - this adoption has been partly driven by the government's creation and support of "cross-border e-commerce pilot zones," of which there were 132 as of February 2022. These zones offer preferential tax policies and streamlined customs procedures, which in turn has spurred the growth of international shopping activities in the region and created opportunities for brands looking to expand into China.
As one of the most active ecommerce populaces in the world, ranking 5th in online consumption in 2021, France provides a wealth of opportunity for brands looking to expand internationally. In fact, French consumers are more likely than most other Europeans to buy from foreign brands, with over 35% of French online shoppers doing so in 2021. However, like the rest of the EU, selling into the region requires strict compliance with the Union’s regulations and standards for selling online.
As one of the most significant economic powers in the EU, it is no surprise that Germany continuously ranks as one of the biggest ecommerce marketplaces in Europe. However, converting this country's populace into consumers requires an extremely local touch. 50% of this country's consumers will not purchase from a site that doesn't use the German language, and they expect access to localized payment methods such as invoicing to be available at checkout. To truly have success in the German market, you must adopt a highly localized presence.
Due to the region's impressive internet penetration of 93% and the population's affinity for technology, Hong Kong is home to an estimated 4.5 million online shoppers. This market’s population is also well-versed in cross-border shopping as platforms and marketplaces like Amazon and Alibaba have risen in popularity there. Cross-border ecommerce as a whole in the region is currently valued at US$3.7 billion and is projected to experience an annual growth rate of approximately 10.2%
Home to one of the fastest-growing ecommerce markets in the world, with an expected market value of US$136.47 billion by 2026, India continues to show promise for cross-border expansion. However, selling into the world's largest country by population requires an astute understanding of the local laws, regulations, and preferred payment methods local to the region. For example, international businesses are required to establish an entity in the region with sales tax registration or partner with a local distributor in order to sell into India at all.
The population of Italy provides an eager cross-border market for B2C ecommerce, with over 67% of the region's online consumers making an international purchase in 2021. Italy's B2C market isn't the only significant opportunity in the region; B2B transactions reached a value of US$447 billion in 2021, providing brands in the sector even more reason to expand into this market. Overall, while Italy isn't the largest player in Europe for ecommerce, its continued growth shouldn't be ignored by brands looking to expand into the EU.
While cross-border ecommerce in Japan is relatively small in scale, with international purchases making up just 1.7% of the total domestic ecommerce market, this region still provides opportunities. Due to the high percentage of internet penetration of over 93% and an increased willingness to purchase globally recognized brands, it is expected that Japan’s cross-border ecommerce market will continue to grow from US$3.01 billion at a compound annual growth rate of 6.9% from 2023 to 2030.
As cross-border purchases represented nearly 82% of the region's online retail market spend in 2021, and the population's internet penetration ranks the highest in the EU at 98.7%, Luxembourg remains Europe's top destination for cross-border e-commerce. Even though the country is home to a small population of just over 650K citizens, Luxembourg creates a prime target for brands looking to expand into the European marketplace.
Ranking in the top 5 countries for overall retail ecommerce growth, Mexico continues to show promise for international expansion. However, while 80% of the country's online shoppers are estimated to have made cross-border purchases, a lack of financial inclusion and low internet penetration create barriers for brands looking to reach the region's many buyers. To effectively engage this market, brands need to offer flexible and familiar payment methods used in the region, such as installment payments or offline cash payment options like OXXO - and understand that approximately 98% of the country's online purchases are made via smartphone.
Holding 4th position in Europe's top 10 ecommerce countries, Spain continues to be a hotbed for online shopping. In 2021, 55.4% of Spanish online shopping was cross-border, and with an estimated 30 million online shoppers, Spain offers global merchants a market that's prime for expansion. Of note, one of the largest net sales categories in the region is electronics and media, with 63% of internet users in the country holding at least one subscription service offering digital content.
United Arab Emirates
Traditionally, the United Arab Emirates has been a brick-and-mortar nation, with online sales making up only a small portion of total retail sales in the region. However, since the digital shift created by the global pandemic, the market has become much more heavily invested in ecommerce consumption. By 2025, ecommerce is expected to generate over US$8 billion in sales as the country is hyper-connected to digital channels, with 100% of the UAE population having access to the internet. Though it should be known that to convert in the region, Merchants must take a high-touch approach to earn consumer trust and enable a payment experience that provides a high level of convenience.
The United Kingdom is home to one of the largest ecommerce markets in the world and is projected to generate over US$285 billion in ecommerce revenue by 2025. Due to the population's ready adoption of online shopping, buying from international brands continues to grow in popularity. 17% of all B2C ecommerce revenue in 2022 was estimated to be cross-border. However, since the advent of Brexit, there have been several changes to local regulations and taxations that merchants must now navigate and comply with to sell into the region successfully.
The United States of America provides one of the largest addressable ecommerce markets globally for international brands. With an estimated market of 69.8 million cross-border buyers, the US ranks second globally in market size for cross-border ecommerce. While the US market provides a great deal of potential - importation laws, regulations, and sales tax compliance vary from state to state and can create complex barriers for merchants looking to expand into this region.