One of the biggest success stories from the pandemic has been the growth in e-commerce, fuelled by lockdowns and recession in America. There is a growth in demand for discounted goods from consumers in the U.S., which sellers are keen to source from low-cost destinations like China. Cross-border selling on marketplaces, such as Amazon, Etsy, and eBay, has emerged as a rising opportunity for shoppers to find those cheap deals and merchants to grow small-town businesses into thriving enterprises.
With no signs of slowing down, global online spending is estimated to reach a staggering $4.2 trillion this year. Post-pandemic, more than 40 percent of those online sales are taking place on international marketplaces, according to a consumer study from Internet Retailing. Consumer sensitivity to the cost of goods encourages sellers to meet consumers where they want to shop and offer competitive prices. In 2020 alone, over half (55 percent) of global online shoppers purchased from another country, Worldpay has found. With U.S. inflation recently reaching a 13-year high in June, the need for customers to tighten their belts and purchase products from low-cost production centers, like China, will only become more significant.
The growth potential of marketplace sellers is therefore reliant on vetted access to trusted suppliers. Yet, for many merchants, accessing unfamiliar markets can still present its challenges. To meet the demand for cut-price goods, merchants want the reassurance that the person they are doing business with is who they say they are. They need to know that the product quality will not suffer at a lower price point, the transactions will be secure, and the goods will arrive on time.
Without the proper support from cross-border payment partners, such as PingPong Payments, new supplier relations can lead to unforeseen expenses, lengthy shipping times, and even money laundering.
Interestingly, PingPong Payments finds that the e-commerce phenomenon is not exclusive to the U.S. A growing Asian seller population is identifying and tapping into the lucrative American market. With a world of opportunity, merchants in Asia are spotting where e-commerce is growing and diversifying into additional channels. For example, around 30 percent of Amazon’s third-party sellers in 2020, earning over $1 million in annual sales, were based in Asia. Building a trusted network of suppliers and having access to cash in real-time is critical for these upcoming merchants to boost their sales worldwide. PingPong Payments is well poised to help them to overcome the unique hurdles in meeting varying global demand.
Where it all began
Co-founders Ning Wang and Robert Chen identified a gap in the market that traditional banks were not serving. Banks have not always given this market segment the attention it deserves by not genuinely understanding sellers’ needs and placing a high price tag on selling overseas. Thus, the pair founded PingPong Payments.
Wang and Chen – successful past Amazon merchants – had the explicit mission of making cross-border payments a hassle-free, highly-visible process. They set out to eliminate the costs of transferring funds and have helped over 750,000 sellers access payments in real-time, in local currencies, at an 80 percent cheaper rate than banks.
Today, PingPong Payments is the largest payments growth partner on Amazon and is fully regulated in the U.S., Asia, and Europe. The company is working with ambitious sellers to assess new suppliers through their Know Your Customer process, build trust and limit risk in new working relationships. With almost two billion digital buyers worldwide, it is no surprise why sellers are branching out of their domestic markets and turning to PingPong Payments to expand globally.
Local expansion in new markets
The allure of the global market is evident, but the secret to success is to make an overseas transaction feel as local as possible. A robust e-commerce infrastructure should be made as accessible and efficient to every seller partner, regardless of their location. Of course, online shoppers will opt to pay for goods in their local currency – they want to see prices in terms with which they are familiar. Collecting funds from different corners of the world is complex and requires global sellers to have a comprehensive understanding of conversation rates. Without understanding how different exchange rates alter the price of goods, a Korean seller – paying in U.S. dollars – may be undercut. Local and foreign pay-out requirements will differ between countries, and Asian sellers branching out will need a bridge that works both ways, compatible under new local regulations and conditions.
Cross-border platforms can create those synergies due to real-time foreign exchange offerings – available around the clock. PingPong Payments understands this problem and faces it head-on. By applying a localized understanding of the global supply chain, the company effectively fills the role of ‘growth partner’ for merchants in expanding markets in Taiwan, Korea, Sri Lanka and Hong Kong. The unique characteristics of various regions, such as trade laws, tax rules, and cultural differences, are woven into a global e-commerce strategy that allows sellers and suppliers to have confidence in repatriation.
An end-to-end ecosystem of cross-border transactions has become critical to international success.
Asian sellers are gaining greater access to sell to millions of new American customers yet remain vigilant of varying international financial demands. Each country has its pain points to adapt to, which may be complex to understand but easy to overcome with the support of the right payments growth partners.
The challenges e-commerce businesses face will require an innovative solution, such as PingPong Payments, to adapt to new environments or trends. In addition, companies can tap into dedicated service teams on the ground to ‘think local’ and make tailor transactions to suit the needs of all parties involved. Sellers and suppliers that seize these opportunities will open up the full potential of global trade and join the global marketplace evolution.
Written by Kenny Tsang.Track Latest News Live on CEOWORLD magazine and get news updates from the United States and around the world. The views expressed are those of the author and are not necessarily those of the CEOWORLD magazine.
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