Kenny Tsang, industry expert and Managing Director of PingPong Payments, provides his top five trends to define success in 2021.
This year, the rules of e-commerce have effectively been rewritten. In an increasingly touchless society, our lives have become digitized, changing how we engage, interact, and view day-to-day life. Now, new online buying behaviors have emerged, and millions of consumers that previously relied on brick-and-mortar sales are shopping online to meet everyday needs.
But the rise of e-commerce hasn't been without shortcomings. At the height of the pandemic in May, sellers, welcoming millions of new consumers, were faced with supply chain disruption, shock shortages, and business loss. Many turned to international options to mitigate issues, and cross-border sales saw a staggering 21 percent increase in year-on-year sales in June.
With uncertainty surrounding the new year, sellers will naturally be wondering if this growth is sustainable. It will be vital more than ever to plan for a post-pandemic environment.
To prepare, here are five key trends that will define success in 2021:
Growth of Cross-border, Global Marketplaces
In a year of uncertainty, the global marketplace has become one of the very few resilient, effective, and profitable platforms to weather the storm. Fuelled by the transformation of shopping, Alibaba, Amazon, Etsy, and Taobao all reported record figures this year as consumers turned to these new 'virtual shopping malls.'
By the end of 2020, an estimated two billion people will have made an online purchase, and the rise in users is beginning to signal a shift in online sales. As important as the U.S. market is to this growth through marketplaces such as Amazon, eBay, and Etsy – sellers can often forget that 85 percent of the industry purchasing power lies abroad.In fact, in China, e-commerce sales have recently overtaken the U.S., and the country's 'Singles Day' shopping event eclipsed Black Friday in the U.S.
At the end of December, the global e-commerce market was expected to reach $1 trillion and early forecasts anticipate the trend to continue. With new cross-border payment solutions that can manage overseas logistics, pay suppliers in a local currency, and make VAT payments in real-time, becoming an international seller is easier than ever before.
Diversifying Supply Chains
To say that lockdown restrictions affected supply chains in 2020 would be putting it lightly. At the peak of the crisis, disruption to factories highlighted the fragility of relying on one single source for inventory. With little to no option left for sellers, the shift to diversifying supply chains to mitigate financial repercussions has called for an industry-wide rethink.
However, disruption isn't new, and one of the biggest mistakes sellers often make is overlooking future risk planning and the prioritization of corrective actions.
Instead of assuming there won't be interruptions to one supply chain, consider other sources. With an abundance of cross-border services such as parcel consolidation, global fulfillment, and payment providers, sellers can - and should - explore international markets.
Faster, and Faster delivery
As the world changes, consumer preferences, schedules, and expectations are also rapidly affecting the speed and manner of how products are delivered. In an age of immediacy, the industry standard of the typical 7 to 10 delivery day window has become outdated. Over 90 percent of consumers are now willing to pay for same-day or faster delivery.
Thanks to online marketplaces such as Amazon Prime, Walmart, and Best Buy, the 'new normal' of instant delivery in as little as two hours has challenged sellers to rethink their customer service approach. Now, the speed, price, and the previously optional 'add ons' are differentiating sellers through competitive advantage in an e-commerce race that most cannot afford to lose.
The key in the new year is to be flexible. With diversified supply chains, robust inventories, and reliable fulfillment management, sellers can use their agility to deliver to the right customers at the right time.
The Rise of Social Commerce
The business advantages for retailers to sell directly through social media in a year that has seen e-commerce become a focal point of day-to-day continuity has drastically strengthened. The opportunities to buy, sell, or promote on one integrated platform through leveraging channels that millions of people are using now appears to be a no-brainer for most sellers.
Staggeringly, over 87 percent of e-commerce shoppers believe social media helps them make a shopping decision, and yet, only 40 percent of sellers are using it to generate sales. In 2021, experts project this number will rise significantly; we're arguably already seeing its value in China, which has hosted its biggest sales event - Singles Day - on record so far. Through live-streaming, two-thirds of Chinese consumers said they purchased products via the platform in the past 12 months, citing "instant information" as a significant deciding factor.
Live-streaming is bound to become part of the U.S. shopping experience, and with more features evolving and launching alongside industry growth and demand – sellers should keep up with new trends.
The Transformation of Retail Shopping Events
As online commerce continues to prevail, annual in-store holiday season doorbusters promising discount deals have begun to lose their relevance. During the 2020 holiday season, deals popped up early, 24-hour sales lasted a month, and by late November, most of the 'festive shopping' had been done online.
Retail shopping events have changed, accelerated, and turned in favor of digital commerce, with sales increasing 30 percent year-on-year during the 2020 holiday season. More importance is being placed on the broader e-commerce market, and the increase in competition in an already saturated market will require sellers to work smarter.
Instead of waiting for domestic season events, think globally. By partnering with the right cross-border payment provider, sellers can enter new markets, effortlessly move money to all corners of the world, and grow a larger audience that will effectively move sales forward post-pandemic.