While most of the answers correctly point to the future growth of eCommerce, Let me answer this question with a perspective on the direction eCommerce might be heading into. As someone who keenly follows this space, I have a lot of evidence to support my claim
I believe the future of eCommerce is to go cross border.
The future of shopping online is where the end customer gets the freedom to directly buy from the producers of the goods with no bounds on border. Shopping is about to transcend international boundaries.
There are several reasons for being optimistic on cross border. But first let me take a step back and recap the history.
I grew up in 80s and 90s India. Back then, borders were much more permeable for travel than trade. Shopping was limited to local bazaars and hand carts. Choice of products were limited to say the least. Brands ubiquitous today were unheard of. Style had a thin definition, and fashion meant Bollywood.
As countries started opening up their borders, the local markets were flooded with international brands. With increasing penetration of television, telemarketing and tele-sopping came into existence.
Late in 90s and early in the millennium, Internet came to take a common place in our lives. Though when eCommerce and e-retail arrived, it was received with a cold response from most of us. The convenience of shopping from home was overpowered by doubts, and for good reasons.
- Most of the countries had improper logistics infrastructure.
- Online payment options were limited and far from effortless.
- Internet speeds were dismal
- smartphone were unaffordable.
Past 15 years we have seen a revolution in all these spaces. Driven by eCommerce growth, the entire ecosystem grew and matured.
In the era of globalization, goods are manufactured where it is cheapest to manufacture. These are imported in the country based on the aggregate demand forecast and prediction models of the importers. These importers then list their inventory on e-commerce portals and conventional brick and mortar shops. Most of what you buy, be it online of offline, comes from cross border trade (read China). Although it goes through several middlemen before if can come to you. Each one of these middlemen take their cut.
- Long supply chain inflates the cost of the product
- Maintaining inventory adds to the overheads at seller’s end, further inflating the price.
- For apparels, by the time designs are in your hands they are already several months old.
- The buying options you get, depends not on your choice, but on the aggregated choice of the entire population.
In a nutshell you end up buying outdated products of someone else’s choice at an inflated price. So why are we not shopping cross border already?
The reason is that its not easy because of:
- Costly international remittances
- Bureaucratic Customs paperwork
- Expensive International logistics and
- The possibility of fraud.
In past few years, there have been several developments that point to a positive change in all these fronts. The ecosystem for cross border B2C eCommerce (CBB2C) is warming up. Given the size of opportunity, several business, technology and policy innovations are fueling this growth.
The maturing eCommerce ecosystem, the advantages of shopping cross border, the improving ecosystem for B2C cross border eCommerce and the size of the opportunity is inevitably leading us to integrated cross border shopping platforms.
There are already a few success stories in this space, wish.com and aliexpress just to name a few, and many more are soon to follow. Going forward increasingly many startups will find it lucrative to experiment with CBB2C and innovate on business models to iron out the currently unresolved challenges. I am fortunate to be working with one such startup called miracas.com.
Phew…. that was long. But I hope I answered the question convincingly. To me, the future of e-commerce seems to be cross border.
