U.S. online retailers are selling a lot to consumers in other countries—but they could be selling more.
In 2018, the 889 U.S.-based retailers in Internet Retailer’s rankings of North America’s Top 1000 retailers by web sales sold $147.3 billion to consumers in other countries. While Amazon.com Inc. alone accounted for 44% of those sales, other U.S. retailers sold $82.5 billion internationally via ecommerce, and $64.9 billion when excluding sales to Canada and Mexico.
However, only half of U.S.-based Top 1000 retailers ship to consumers outside of North America, Internet Retailer data shows. That’s despite the fact that 57% of consumers in both Western Europe and Eastern Europe and 48% in Asia/Pacific buy from retail websites outside their own country, according to a 2018 global survey by online payments company PayPal.
And 21% of those cross-border web shoppers had purchased from U.S. sites in the previous year, the PayPal study found, second only to the 26% that had purchased from China, home to online players like Alibaba Group’s AliExpress that sell inexpensive Chinese goods to consumers around the world.
How U.S. retailers sell globally via ecommerce
For those U.S. brands and merchants engaged in international ecommerce, they sell primarily in three ways: by operating country-specific sites outside of the U.S., selling via online marketplaces and shipping orders to consumers who order from U.S. retail websites.
It’s mainly larger companies that develop and maintain ecommerce sites in other countries. Amazon has 13 such international sites, and 62 other U.S.-based Top 1000 retailers have at least one. But this is not a strategy many midsized or smaller retailers embark upon: only 15 retailers ranked lower than No. 297 in the Top 1000 have even one international ecommerce site.
Selling on multimerchant online marketplaces—such as those operated by Amazon, eBay Inc., Japan’s Rakuten and China’s two ecommerce giants, Alibaba Group and JD.com Inc.—is a more common, and an increasingly important, sales channel. In an August 2019 Internet Retailer survey of 105 retailers selling internationally, half said they sold on marketplaces.
Amazon was by far the top choice, selected by 82% selling on international marketplaces, followed by eBay at 54%. Far behind were Rakuten and two Alibaba sites, the brand-friendly Tmall shopping site and Alibaba.com, which is a business-to-business ecommerce site.
The third way to sell internationally is to accept orders on a U.S. website for delivery abroad. Of the 889 U.S. Top 1000 retailers, 524 ship outside the U.S., but only 443 beyond Canada.
Why don’t more U.S. retailers sell online internationally? Red tape—in the form of customs duties and local laws and regulations—represents the hardest parts of international ecommerce, according to an August 2019 Internet Retailer survey of 105 companies.
Those obstacles were both cited by more than 40% of surveyed retailers that sell internationally via the web, far ahead of the 32% who pointed to the challenge of fulfilling orders around the world. (Respondents could choose up to three responses.)
More than a quarter of respondents pointed to three other operational challenges: currency and payment processing (29%), language (29%) and fraud prevention (25%).
It’s worth noting, however, that retailers don’t have to be big to ship internationally. Of the U.S. retailers ranked Nos. 801-1000 in the Top 1000, 49.5% ship to consumers outside of North America. That’s not far below the 49.9% average of the Top 1000 as a whole.
Many of those retailers are taking advantage of the growing number of vendors that provide services related to international ecommerce, including fulfillment, customs clearance, translation and customer service.
The 70-page 2019 Global E-Retail Expansion Report goes into detail about the obstacles to selling to online shoppers outside the U.S. and the strategies many U.S. retailers and brands are deploying to overcome those obstacles. The report includes:
- 27 charts on international ecommerce
- Analysis of the percentage of Top 1000 retailers’ ecommerce sales from abroad, broken down by 14 merchandise categories, Top 1000 rank by online sales and four merchant types—retail chains, web-only merchants, consumer brand manufacturers and catalog/call center retailers
- Analysis of the percentage of Top 1000 retailers’ website traffic from abroad, broken down by 14 merchandise categories, Top 1000 rank by online sales and four merchant types—retail chains, web-only merchants, consumer brand manufacturers and catalog/call center retailers
- Data on the international payment methods accepted by Top 1000 retailers and those that offer currency converters and translation into non-English languages on their websites
- A list of the leading countries sending website traffic to Amazon.com
- A list of the top 10 countries that leading U.S. e-retailers ship to
- Results of an exclusive survey of retailers about how they sell internationally via ecommerce, where they sell, the primary obstacles they face and how they view the role international ecommerce will play in the future of their businesses
- Analysis of the leading international web marketplaces that U.S. retailers sell on
- A breakdown of the U.S. retailers that sell on Alibaba’s Tmall marketplace in China, by merchandise category
- Data on percentage of consumers in major international markets that shop at retail websites in other countries
- Exclusive Internet Retailer estimates of global international ecommerce sales and growth.
The 2019 Global E-Retail Expansion Report is available as a downloadable PDF for $299. It’s also included in our Gold and Platinum Memberships, which provide access to all of Digital Commerce 360’s recently published reports and certain online retailer databases.Favorite