Cross-border sales a ‘win-win’ for global brands with no retail presence in India

Hospitality consultant Amit Roy spends upwards of ₹3 lakh a year shopping online for everything from Birkenstock sandals, specialised knives/mixer grinders to car accessories and limited edition Batman clocks that are shipped to his doorstep from the US, the UK and China.

Global cross-border commerce, at $284 billion in 2017, is emerging as the next big growth opportunity for the fledgling $20 billion Indian e-commerce industry. Estimated to reach $630 billion at a CAGR of 17.3 per cent by 2022, as per Forrester Research, the cross-border share of the global e-commerce market is estimated to rise from 15 per cent in 2015 to 22 per cent by 2020.

Riding the wave of this next big opportunity are India’s top e-tailers Flipkart, Amazon, Myntra and Paytm.

“I recently bought a pair of stylish, non-slip, $300 Birkenstock sandals, a high-end German brand on Amazon.com that was delivered in one week for an extra $30,” says Amit Roy. “I need these non-slip sandals at work, as kitchens have greasy floors. However, I paid $2 for shipping on AliExpress.com for car accessories, which arrived by India Post in eight weeks” said Roy, who is one of India’s 20 million monthly active shoppers, as per estimates from RedSeer Consulting, which pegs the annual active shopper base in the country at 90 million.

Flipkart entered the lucrative cross-border retail market a year ago, with its acquisition of eBay India in April 2017, but declined to share growth numbers.

Amazon’s B2C Global Selling Programme that was launched in India in 2015 has grown 224 per cent in the number of exporters (sellers) and 500 per cent in products in 2017, with over 32,000 sellers offering over 90 million ‘Made in India’ products to customers across Amazon’s 10 global marketplaces.

Amit Agarwal, Senior Vice-President and Country Head, Amazon India, in an interview with BusinessLine in December said he expects exports to grow bigger than the e-tailer’s Indian marketplace in the next the five years. More recently, Eric L Broussard, Vice-President and Head of International Seller Services at Amazon.com told BusinessLine that cross-border sellers are growing twice as fast as sellers who just sell in their country of origin.

Seizing the massive cross-border commerce opportunity, Ace Turtle, a Temasek Holdings and CapitaLand-backed start-up that enables omni-channel commerce solutions for over 30 global brands, has partnered with six global fashion brands from the US and the UK, who have no presence in India to reach online shoppers on Flipkart, Amazon, Myntra and Paytm.

The start-up’s cross-border e-commerce platform Rubicon, already has two brands selling on it – Jennifer Lopez’s collection of premium hand bags priced from ₹5,000 to ₹13,000 and Jones New York’s exclusive hand bags priced between ₹3,000 and ₹6000. The third brand, BCBGeneration’s private label handbags is expected to go live on Rubicon in two weeks, with three more global fashion brands in the pipeline.

“Cross-border retail is a massive market, with 40 per cent contribution coming from Asia,” said Nitin Chhabra, Founder-CEO, Ace Turtle. “This fiscal 10 per cent of the ₹1,000-crore sales that we are targeting on Rubicon will come from cross-border e-commerce, which will increase to 20 per cent next fiscal,” he said. In addition to the India market, Ace Turtle is also enabling cross-border e-commerce in Singapore and Malaysia on Zalora (Global Fashion Group) and Lazada (Alibaba Group).

“Cross-border e-commerce is a win-win for global brands who have no retail presence in India; for marketplaces who have to bear a marginal cost of delivery that is negligible and for online shoppers who can now get their pick of international brands from the comfort of their homes, using local currency, local payment methods and at local pricing,” observed Vidhya Shankar, Executive Director, Grant Thornton India, who is an avid cross-border shopper himself.