E-Commerce in International Trade
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- 31 March 2020
With the spread of digital technologies, great progress has been made in the volume of cross-border e-commerce in recent years
The e-commerce markets, where international trade runs the fastest, stand out as the most important force in the growth of e-commerce. This dynamism does not only continue in developed countries such as the USA or Germany, were digital technologies are widely used, but also in developing and developed countries. Although not evenly distributed, the volume of cross-border e-commerce in the world has spread to many regions. In addition, the growth continues to increase with every year. In line with these developments, the worldwide cross-border e-commerce volume is expected to reach $994 billion in 2020. Although cross-border e-commerce is realized in many sectors, the leading sectors in the eld are clearly clothes and shoes. Closely followed by the categories electronics, health/beauty, accessories/watches, sports/ hobbies and books/music/media.
E-COMMERCE DEVELOPMENT IN TURKEY
For the last few years, e-commerce in our country has been developing at a rapid pace. According to the data of Tübisad & Deloitte, the growth rate of e-commerce in Turkey was an average of 33 percent annually between 2104 and 2018. On the other hand, again according to the same data, Turkey’s e-commerce spending in 2018 was announced as 59.9 billion Turkish Lira. The steady growth of the Turkish market has also attracted the attention of international e-commerce giants. So much so that last year the global e-commerce site Alibaba bought Trendyol, one of Turkey’s most important e-commerce sites for $725 million, which clearly shows Turkey’s strong market potential.
WE REACH COUNTRIES THAT WE CANNOT ACCESS WITH TRADITIONAL EXPORTS THROUGH E-EXPORT
According to TEPAV’s (Economic Policy Research Foundation of Turkey) study named “E-Export in Turkey”, the share of Turkey’s traditional export is quite low compared to e-export. Together with this, the USA is number one of the top 10, in which Turkey carries out exports within the framework of e-export. In terms of traditional export, Germany ranks first. All these data show that we can easily reach countries via e-export that we could not reach with traditional export. While mostly intermediate goods and raw materials are exported with traditional export, e-export gives us the chance to export final products.
PROBLEMS AND SOLUTIONS REGARDING E-EXPORT
Speaking a foreign language is a key ability for success in e-export and enables the communication with market places and forming of direct customer relations. Artificial intelligence-based translation software has not yet fully solved instant translation, thus foreign languages will continue to be an indispensable element for those who aim at being successful in e-export.
YOU HAVE TO USE THE POWER OF SOCIAL MEDIA
It is getting harder and harder for your potential customers to access information about your products among the excessive information on the Internet. To solve this challenge you can use the power of social media networks by utilizing quality content. By creating social media accounts and content in especially the language of your target audience, you may easily attract customers to your products.
Creating an own e-commerce site is not only outdated nowadays but companies that try to create their own sites for e-export must endure a very exhausting and costly process. Moreover, having qualified employees to manage their own digital infrastructure is likely to be a major problem, which could lead to compromises to operational quality. For this reason, trying to make e-export directly through market places like amazon.com or Alibaba will be effective in achieving success in a much shorter time.
DIGITAL WALLETS MAKE PAYMENTS EASIER
Receiving the payment for the sales realized constitutes an important problem in e-export. Currently it is not possible to transfer your money accumulated on the e-markets directly to a bank in Turkey. Therefore, internationally valid digital wallet applications such as Stripe, make it easier to transfer your money to Turkey.
One of the most important problems in e-export is the return process. Returning your product to the country is a very painful process. Since the state does not record the products during e-export, it sees the returned product as imported products. For this reason, e-exporters are trying to have the product destroyed within the borders of the exported country without returning it if the packaging is already broken. If one works with a place, offering fulfillment service such as amazon.com, it is possible to keep the product with unbroken packaging in storage, until another customer orders it.
MEASURES SHOULD BE TAKEN AGAINST CONSTANTLY CHANGING LEGISLATION
In e-export not only the legislations of the host country but also the countries, in which you sell the product, are very important. Frequent changes of legislation also change the rule of the game, thus precautions are needed to solve this legislation problem. The most important part of this is to establish companies in different countries, in order to issue invoices and receive payments via the advantageous country in the relevant period. In other words, you always have to be ready for this mobility.
As a result, we can say that e-commerce and cross-border e-commerce gains a bigger share of world trade every day. In addition, Turkey has many opportunities in terms of cross-border e-commerce. On the other hand, there are some obstacles to e-export and it is not enough for the private sector to make efforts to overcome them. Especially the help of public institutions on the legislation side and non-governmental organizations working closely with the public is much needed.
Yıldız Holding Digital Culture Development Manager Şerafettin Özsoy