Washington lawmakers may be exploring ways to collect state sales taxes from America’s online sellers but perhaps they should shift their attention further afield.
According to a recent report published by consulting firm Accenture and AliResearch, the research arm of Chinese e-commerce behemoth Alibaba, the global B2C cross-border e-commerce market will soar to a monstrous $1 trillion in sales in 2020, up from only $230 billion last year.
That’s a compounded annual growth rate (CAGR) of 27.4 percent over the next five years and means that more than 900 million shoppers will be buying goods from online sellers based overseas, with cross-border transactions accounting for nearly 30 percent of all e-commerce sales.
Not surprisingly, China is expected to lead the charge. Despite being home to Alibaba, the world’s largest online retailer, the report predicts the country’s ever-growing middle class will be buying $245 billion worth of goods from foreign websites by 2020. Worried about the reliability and brand authenticity of products stocked by sites notorious for knock-offs (Alibaba, JD.com and Yihaodian have all come under fire for carrying counterfeits), the Chinese will satisfy their thirst for Made in U.S.A. labels by clicking on American purveyors.
The report puts Western Europe and North America in second and third place respectively, expecting the two regions will jointly comprise more than 30 percent of cross-border e-commerce purchases within five years.