Small Businesses Less Likely to Expand Sales Across Borders

Cross Border Commerce

Research says 87% of merchants believe that expanding online sales into new markets is their biggest opportunity for growth. By contrast, small businesses are significantly less inclined to implement cross border commerce strategies. Only 40% of small businesses engage in cross-border trade. Compare this to 71% of medium businesses and 92% of large businesses.

The research comes from Visa. Visa’s Global Merchant eCommerce Study (Visa GME Study) analysed the responses of 1,000 executives in 10 major markets around the world.

The study looked at the attitudes, behaviors and perceptions of business executives in relation to cross border commerce.

Cross Border Commerce

Ecommerce businesses  are spurred on by changing consumer trends. And they face growing demand from customers to shop across borders in search of better quality, lower prices and goods that are not available in their market. So 66% of these businesses sell products across borders. Furthermore, cross-border sales account for nearly a third of ecommerce companies’ revenue on average the research found.

Today 87% of businesses believing that expanding into cross-border sales is one of the biggest nurturers of growth. And the research shows the importance of small businesses selling overseas. Otherwise they cannot remain competitive. And they lag behind larger rivals and competitors.

Noting the apprehension many small businesses can have in terms of entering cross-border markets, the report’s authors write:

“Executives at small businesses are not as eager to tie their growth strategy to international sales, perhaps because a misstep could have greater consequences. Small businesses (23%) are more likely to disagree that having an international presence would be essential for their company’s success in the next five years, compared to medium (8%) and large (5%) companies.”

The research found that better resourced businesses are more likely to have experience with international sales. And these businesses prove more comfortable reaching out to consumers on a global scale.

39% of Small Businesses Feel Inadequte

The research says 39% of small businesses are likely to say their company is inadequately prepared to deal with international transactions. This compares to 14% of medium sized businesses which would not be sufficiently prepared for global trade. And only 7% of large businesses find themselves unprepared.

When it comes to cross-border commerce, Visa’s report confirms that small businesses are facing an uphill struggle. They fond themselves challenged by larger rivals on an international scale. Specifically this happens because of knowledge and resource gaps.

However, small businesses must meet rising customer expectations to be able to purchase products abroad and not just at a domestic level. So they need to work on expanding into international markets in order to improve long-term business opportunities.


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Gabrielle Pickard-Whitehead Gabrielle Pickard-Whitehead is a staff writer for Small Business Trends and has been a member of the team for 7 years. She is based in the United Kingdom and since 2006, Gabrielle has been writing articles, blogs and news pieces for a diverse range of publications and sites. You can read "Gabrielle’s blog here.".