Global Business | Supply Chain & Logistics

The reality is that 99% of businesses all across the world are out of the global market. It means—extrapolating it across the board, businesses leave most of the money on the table.

It is the Era of Global Business. Technology has brought even the far-flung regions of the world closer. World indeed seems a lot smaller. But, still, a very tiny percentage of businesses even consider selling their product internationally.

For example; out of more than 30 million businesses in the US only 1% sell their products or services internationally. The percentage of businesses that participate in the global market is even lower in most other countries.

The global population is over 7.5 billion people, and, according to market research firm eMarketer, the global e-commerce sales are expected to hit over $3.5 trillion in 2019. Citing the example of the US that has a population of slightly less than 325 million, by not selling globally the businesses miss out on a very large commercial potential on the table.

This means 99% of businesses all across the world are out of the global market. In a normal course of business, a loss of such a large share of market is unacceptable to any business that has plans for growth.

International consumer markets all across the world—in particular in China and the surrounding economies, are growing at a very fast rate. The driving force of this phenomenon growth in consumption is, of course, the dramatic rise in disposable income of the population.

The e-commerce (or the online commerce), is taking the lion’s share of this growing consumption economy. Global e-Commerce sales grew 18% to US $ 2.8 trillion in 2018. It is projected to hit the US $6 trillion by the year 2022.

With the availability of technology and so many global eCommerce platforms like, Ali Baba (with its array of subsidiaries and other arms like AliExpress, Paytm, Tmall, Taobao Global)—with penetration into 150 plus countries, JD.com (Jingdong), Tancent, Kaola, Lazada, WooCommerce (WordPress plugin), BigCommerce, VTEX, and Shopify etc. etc., it has become much more easier to sell products and services online—Globally.

In China—the fastest growing e-commerce economy in the world, the e-commerce market is expected to grow 30% annually to nearly $2.3 trillion in 2019. Meanwhile, the US could see a 15% growth over 2018 to $600 billion.

The Logistics of Going Global

For a business the idea of going global is both exciting and profitable. There are tremendous potentials for growth. But, at the same time, doing business cross-border needs doing some ground works.

Business need to understands the rules, regulations, requirements, and procedures of both the home country and the destination economy. Beside that, there are the logistics of packaging, shipping, warehousing, distribution, selling, and accepting the payments to think about.

The logistics of the shipping and fulfillment in itself is major factor that influence both the costs of operation and customer satisfaction. Here businesses have to consider the logistics of shipping to countries with different rules and requirements, declarations, customs, duties, and the associated paperwork—And, before that, the paperwork needed in getting the export clearance to ship the goods abroad.

Payment Methods and Technologies

The final – and most important, part for a business is to receive payments for the goods and services sold. In a local economy, it is not an issue—Cash or Credit, bot are OK. But, selling and collecting receipts in foreign markets require requires tackling a few more issues like having bank accounts in destination countries, currency conversions, and transfer of funds back to home country’s bank accounts.

Selling internationally further requires a payment processing platform to support local payments. Of course, the considerations of bank account and currencies options, which vary by country are still to be tackles.

But, with the globalization of business and eCommerce, there are a numbers of services that provide solutions to the payment problem. Utilizing the destination economy’s payment gateways is a logical approach, of course.

For the businesses in the US – and in quite a number of other economies, many services are emerging to provide a seamless—almost, interface/gateway to other nations’ popular payment processing platforms to make the process of marketing, selling, and accepting payments relatively an easy job.

One such service provider is Stripe. It has entered into an arrangement with the two Chinese eCommerce giants, AliBaba and WeChat. Through this arrangement, Stripe offers services enabling non-Mainland China businesses to accept payments on AliPay and WeChat pay platforms.

This way, a major hurdle in selling to the Chinese (and many other) markets has been removed to a great extent.  Non-Chinese companies in many countries (at the time of this writing, 34) can now accept the payments direct from their customers. For the businesses with presence in Hong Kong, the process has become even more easy; the Stripe users can get paid out in USD without currency conversion to local, USD-denominated bank accounts.

Auxiliary eCommerce Support Services

As the business gets hold—or in advance of that stage, in a destination market, it may also need the services of legal, accounting, and financial experts as well.

These things are all part of the logistics essentials for taking business to the global market place. It seems a bit of extra work and effort, but taking into account the rewards, it is certainly worth it—Just the part of doing business.

The entire process of establishing a good Logistics Support and Supply Chain system, of course, can easily be assigned to the experts service providers.

The fact is that all of these essentials are rather specialized areas in their own and should better be delegated to the ’experts’ in their own fields. These are the service providers that can help a lot in taking care of the entire supply-chain logistics—from the shipping and fulfillment to warehousing and distribution.

We have compiled a list of Top Global Freight Forwarders along with the list of Top Regional Freight Forwarders. It can serve as the starting or reference point for working out the logistics of freight.

✍ Please note: There are hundreds more reputed services beside what we have been able to compile there. Investigate them and communicate with them before employing their services. Remember; like all the service providers, none can be a perfect fit for all the needs and all the businesses. Each business has different needs and budgetary constraints that have to be taken into accounts.

Also, with the ’All-in-One’ service providers like the AliBaba, Amazon, JD.com, Tancent, Kaola, Lazada, iShopify or WooCommerce, Linio, Cdiscount, Tmall Global or JD Worldwide, businesses can relatively easily reach global customers, without incurring heavy up-front investment.

AliBaba is taking an interesting approach to providing ‘full-service’ to the global sellers on its platform by enlisting a large number of ’verified’ freight-forwarders and other service providers right on its platform.

AliBaba also announced that as of August, 2019 it will allow small businesses to sell on Alibaba platform. This change will open the door for (in particular US based) merchants to sell cross-border in countries served by Alibaba, including India, Brazil, Canada, and US. That is good development for businesses who want to sell in the global market, but have limited resources to establish their marketing, selling, and payment processing logistics.

But, to put it in a nutshell, A business must asses its own needs, requirements, and business plans, and analyze the pros and cons of these services and platforms to make well informed decision.

All of these ‘logistical’ requirements may seem quite intimidating. But, with some thoughtful planning and professional help, it is quite a manageable task.

Anyhow, the truth of the matter is that, for any business to grow— and make more profit, going Global is the way.

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