Data has given life to a new era of cross-border e-commerce. The e-commerce industry is booming and is expected to hit $4.5 trillion in 2021. In Asia, over 40% of e-commerce is cross-border – an illustration of how frequently consumers across the region are shopping outside their domestic market.
The market for cross-border e-commerce in Southeast Asia is still small on a global scale but has tremendous potential. Now is the time for merchants to look at opportunities to expand internationally. This requires a cross-border plan, which needs to be informed by data.
What are the key considerations for merchants when it comes to knowing which information to use?
At the heart of this booming internet economy lies the payment services industry, which is central to building e-commerce ecosystems. This is not only because they provide the necessary infrastructure to facilitate transactions, but because they are also able to use data to better understand consumers around the world.
Coupling these insights with an understanding of emerging macro trends, better customer service is achieved — from personalised recommendations to enhanced security.
Knowing the customer inside out is powerful, but even more so when you have an end-to-end view on the transactions they’re making at each merchant – when, through which channel, and at what location.
In other words, choosing the right payment provider matters.
Going cross-border requires an understanding of the market you’re wishing to enter. There are many things to consider – local customs and culture, how competitors are already operating in that region, how to update prices accordingly to the local currency equivalent, and more.
With a plethora of market and consumer data available online, it’s not difficult to assess market relevance and demand for a product using search engines and key word research. The bigger challenge is knowing how to use this data strategically.
Data is essentially redundant without some form of interpretation. Businesses need to be able to sieve through the vast amounts of data available and extract key insights that are relevant to the solutions they develop. An excess amount of irrelevant data might drive these companies into generating skewed information that ultimately might threaten the conception of business decisions that would not benefit them nor generate profit.
Before expanding internationally, an effective cross-border e-commerce strategy must be implemented, informed with insights that will help achieve set business goals. When collecting data, start with the business objective then identify the measures that will answer the questions you need to ask and answer. This will give life to a process that uses data to support business objectives, rather than dictate them.
Going cross-border means operating in a landscape that is susceptible to change. Merchants looking to expand internationally need to keep up with FX rates, evolving customer demand, changing competition levels, different drivers of customer preference and more. As a result, there are data sets that will be relevant at different points in time.
There are no limits to the amount of information a single piece of data can offer us. Rather than trying to make sense of a mountain of data, business should choose data they deem relevant to them at the moment. This does not mean that data not used should be discarded. In fact, data can be saved and used when needed and when relevant. When we use data for singular purposes, we neglect to realise that data can be tailored to suit ideas. When we approach data from different angles, we are bound to get a multitude of outcomes. One piece of data could prove more valuable than heaps and piles of inconsequential values.
Payment service providers need to best serve their merchants in a variety of ways. Merchants need them to build the knowledge and understanding of cross-border commerce, support multi-device capabilities, and provide the flexibility and adaptability needed to operate on an international scale.
The provision of data from such providers is of utmost importance to a merchant’s cross-border expansion strategy; however, how data is collected and interpreted is fundamental to achieving customer cut-through. The availability of data can make us complacent in the process of innovation. For merchants, there is a time and place for each piece of data, that should be used to inform business decisions, not justify them.