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Millennials Kickstart Cross-Border E-Commerce Growth

Cross-border purchases have become more of the norm in the pandemic-era shopping environment as global brands seek to sell to new audiences through direct-to-consumer (DTC) e-commerce channels—and apparel has been the biggest beneficiary.

A quarter (25 percent) of global shoppers bought clothing online outside their domestic market over the past six months, while footwear (19 percent) and luxury goods (18 percent) rounded out the top three cross-border categories, according to a survey from EShopWorld (ESW).

The rise in these categories indicates that shoppers are becoming more comfortable with skipping the try-on or testing processes that traditionally are associated with “high touch” items in a store.

“Apparel, footwear and luxury goods tended to be popular categories to buy online pre-pandemic, but with physical stores closed sporadically over the last year and a half, consumers have flocked to e-commerce to buy these and every other category of goods,” said Patrick Bousquet-Chavanne, ESW’s president and CEO of Americas. “Millennials and Gen Zers, in particular, have used the internet and social media to discover new clothing and luxury products from across the globe…and cross-border commerce has given them an easy and secure way to buy the goods and brands that best fit their values and lifestyles, regardless of geography.”

Skincare (17 percent), health and beauty (17 percent), fragrance (16 percent) and cosmetics (16 percent) rounded out the list of the most popular international e-commerce purchases.

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The increase in cross-border purchasing worldwide could have heavy impacts on apparel, Bousquet-Chavanne told Sourcing Journal. He noted that historically, both online and in-store sales in a given market were confined to the product catalogue available there.

“Distributors, buyers and merchandisers decided what to ‘import’ into the market to meet consumers’ demands,” said Bousquet-Chavanne. “Cross-border commerce has changed that model by giving shoppers access to the global catalogues of brands, with few, if any, limitations. Over time, this will have a beneficial impact in terms of the share and type of apparel sold in certain markets.”

While the manufacturing implications are less clear, he also said that the growth of cross-border commerce will continue to fuel the trend of brands getting closer to their customers and manufacturing products based on an aggregated view of individual consumer demand.

In total, 46 percent of the nearly 14,700 shoppers surveyed in July bought directly from international brands online, rising to 52 percent among 25- to 34-year-olds, according to ESW.

The cross-border e-commerce boom is getting a boost from the two most populous nations on the planet. Consumers in India and China (both 61 percent) lead the way in online shoppers, while Mexico (59 percent) and Russia (50 percent) also were most likely to have purchased directly from an international brand online in the first half of 2021.

ESW, an end-to-end platform which helps brands set up cross-border e-commerce operations across areas including product assortment, merchandising, language, currency, delivery, returns, foreign taxation, compliance and fraud protection, says that partner brands can enter new international markets in as little as six weeks using the platform.

This timing, ESW claims, is up to six times faster than if they attempted to do so on their own—all while engaging directly with customers and retaining ownership of all the data collected during the shopping process.

“Brands have to think about international markets in the same terms they think about their local markets,” Bousquet-Chavanne said. “Global brands can partner with experts who have access to local-market demand data in order to gauge consumers’ appetite for certain products or collections and assess market potential. It is essential for brands to continually leverage data insights and consumer feedback to improve their service offerings and ensure their online experience is localized. That means offering local languages and payment options that are familiar to consumers in each market.”

According to Bousquet-Chavanne, ESW expects the momentum in cross-border shopping to continue, albeit at a slightly more muted pace. But this is largely due to the fact that 2020 saw such an unprecedented surge.

“Millennials and Gen Zers have been fueling the growth of cross-border shopping and we’re seeing consistently high demand for it among these younger demographics,” said Bousquet-Chavanne. “Also, hundreds of millions of consumers of all ages tested cross-border shopping for the first time over the last year and a half, and now that so many have seen the benefits it provides—including access to a vast range of products, often at better prices than they could get in their domestic market, along with the convenience and safety of shopping from home—we expect many of them to continue shopping that way.”

The potential slowdown of online growth makes the implementation of omnichannel capabilities even more relevant, particularly as many countries begin to ease Covid-19 restrictions.

While 57 percent of the global shoppers surveyed across 14 countries said the pandemic had opened their eyes to the convenience and choice on offer online—increasing to 63 percent among millennials—71 percent said that, post-pandemic, they would continue to purchase via a mix of digital and physical channels.