The Challenges of Cross-Border E-commerce: OpenBorder’s Solution
Scaling International Sales
Richard Hong and his e-commerce company Pangaea Holdings have experienced the challenges of expanding their men’s personal care brand globally. While gaining international customers was relatively easy, getting the merchandise to them proved to be a significant hurdle. Hong told TechCrunch that they encountered difficulties with logistics pack compliance, product compliance, and marketing, all of which lacked localization technology.
The Birth of OpenBorder
To address these challenges, Hong and his co-founder Darwish Gani spun off the technology business into OpenBorder, which raised $10 million in seed funding. The company has since grown to nearly 70 merchants, with a processing volume that is 10 times higher than when it started.
Cross-Border Trade: A $2 Trillion Opportunity
OpenBorder’s concept is simple yet powerful: providing e-commerce merchants instant access to international customers through the automation of certain logistical needs. These include shipping, trade, tax and duty compliance, product localization, and international marketplace listings – all from one software platform. Merchants can also sell on Amazon and regional marketplaces with a two-day, Prime-like experience.
The Competition
OpenBorder is not alone in addressing the need for cross-border e-commerce solutions. Other companies, such as Nocnoci and Keeta, are providing similar services to merchants in Latin America and beyond. However, OpenBorder’s focus on software development, partnerships, and artificial intelligence sets it apart from its competitors.
The Investment
Peak XV Partners (formerly Sequoia Capital Southeast Asia) led the investment in OpenBorder, with Capital 49 and Harlem Capital joining the round. Pangaea investor Eurazeo also joined the board, bringing its vast experience in the consumer merchant segment to the table.
Growing International Sales
Many OpenBorder merchants start at 4% of revenue coming from international sales, but grow to 15% or even 20%. Pangaea was able to reach over 50% of its revenue coming from non-U.S. customers, and OpenBorder wants to help other merchants achieve the same level of success.
The Vision
Hong believes that with the right tools and technology, every merchant can access every consumer around the world. "We have the obvious answer to that question," he said. "What does it take to get there? We want to help every merchant get there."
The Challenges of Cross-Border E-commerce
E-commerce has revolutionized the way businesses sell their products and services globally. However, the challenges of cross-border e-commerce cannot be overstated. From logistics pack compliance to product localization, merchants face numerous obstacles when trying to expand their business internationally.
Logistics Pack Compliance
One of the major challenges faced by e-commerce businesses is logistics pack compliance. This refers to the need for merchants to comply with various regulations and standards related to packaging and shipping goods across borders. Without proper compliance, merchants risk facing fines, delays, or even having their shipments confiscated.
Product Localization
Product localization is another significant challenge faced by e-commerce businesses. This involves adapting products to meet the specific needs of different markets and regions. From product labeling to marketing materials, merchants must ensure that their products are compliant with local regulations and consumer preferences.
Marketing and Trade Compliance
In addition to logistics pack compliance and product localization, merchants also face challenges related to marketing and trade compliance. These include ensuring that marketing materials comply with local regulations, obtaining necessary licenses and permits, and navigating complex trade agreements.
The Importance of Automation
Automation is key to addressing the challenges of cross-border e-commerce. By automating certain logistical needs, such as shipping, trade, tax and duty compliance, product localization, and international marketplace listings, merchants can simplify their operations and reduce costs.
The Benefits of OpenBorder
OpenBorder’s software platform provides a range of benefits to merchants, including:
- Instant access to international customers
- Automation of logistical needs
- Simplified product localization
- Reduced costs and complexity
Conclusion
Cross-border e-commerce presents numerous challenges for merchants. However, with the right tools and technology, these challenges can be overcome. OpenBorder’s software platform provides a powerful solution for merchants looking to expand their business internationally.
The Future of Cross-Border E-commerce
As global trade continues to grow, the demand for cross-border e-commerce solutions will only increase. OpenBorder is well-positioned to capitalize on this trend, with its innovative software platform and experienced team. With the right support and resources, merchants can overcome the challenges of cross-border e-commerce and achieve success in international markets.
Get Started with OpenBorder
Don’t let the challenges of cross-border e-commerce hold you back. Contact OpenBorder today to learn more about our software platform and how it can help your business succeed internationally.
