The way people around the world discover products is changing. Successful businesses are keeping up with these changes to help their products find people in more places.
Throughout history, humans have shared an innate need to discover opportunities beyond their borders. Through trade, people not only shared goods and services, but also ideas. While the Phoenicians were trading dye and other goods, they also spread their alphabet. Since then, cross-border business has been, and still is, transforming every aspect of our lives—from economies and industries to businesses and people.
Cross-border business creates better living standards resulting from new job and business opportunities. Economist Fredrik Erixon documented that this change has “increased real wages by lowering the cost of consumption” and “improved the quality of management in firms and the working conditions for people”.1
Today, thanks to advancements in technology, people are experiencing moments of global discovery online through their mobiles without the need to travel. People are discovering more goods of better quality, and businesses have access to larger addressable markets, can achieve economies of scale across the value chain, and can diversify their risks.
These wide-ranging benefits are part of the reason cross-border business keeps growing. In fact, the world could see cross-border transactions grow from $29 trillion in 2019 to around $39 trillion by 2022.2
Changes to the way we shop
Global shopping is continuing to grow in popularity. Cross-border ecommerce is growing at 15% compounded annual growth rate, compared to local e-commerce which is growing at a 10% compounded annual growth rate.3
So why are people increasingly shopping across borders? There are different factors motivating people to buy products from foreign markets, including availability, price and quality compared to the local market.
For example, 41% of people who buy from other countries online, shop for things that are less expensive than local products.4 But they’re not just buying the things they need, they’re buying the things they love. Around one third of these shoppers buy in the hopes of discovering new and interesting products.4n
These moments of global discovery are bringing joy to online shopping. The joy of someone who has been looking for the perfect stylish, or the joy of an aspiring fashion designer when they discover hand-dyed fabrics that can be shipped anywhere in the world.
How cross-border commerce helps businesses
But what does this mean for a business looking to expand into new countries?
The internet has democratized access to global commerce. Anyone has the tools to create and publish content. Anyone can set up an online storefront and accept payments in a number of currencies. This means that businesses can more easily reach the people who need them, wherever they are in the world.
This democratization of access has leveled the playing field for businesses of all sizes. It allows businesses to expand more quickly into global markets, to scale brand awareness, and to diversify their risk.
Using technology to engage new international customers
Today, businesses are meeting customers’ needs by making shopping experiences more personalized and engaging. To support them, platforms are increasingly building customer experiences that drive product discovery in creative ways.
This has opened up a new kind of marketing called ‘discovery commerce’. With discovery commerce, businesses go beyond traditional marketing: not just meeting customers’ needs but anticipating them. For customers, this feels serendipitous. Behind the scenes, marketers are driving discovery across borders through four key strategies:
Personalization
Machine learning helps fuel personalized marketing. It can reach new customers by matching your brand—across different markets—with people most likely to love it. By choosing a broad international audience, businesses can reach the most relevant people, regardless of where they are located and what is motivating their purchase.
Localization
Once you find your customers, localized content can help build deeper connections. For example, 55% of people prefer ads on social media to reflect their country’s culture.4 This goes further than just translating text in social ads. It’s about working with partners to develop a variety of creative outputs based on customers’ diverse motivations.
Frictionless shopping journeys
Removing friction points from a shopping journey also helps people make a purchase. Surveyed consumers highlighted multiple factors that they deemed to be very important when making a purchase decision from foreign countries with 78% mentioning delivery tracking, 76% reasonable shipping time, 76% easy return and refund. As businesses plan to expand across borders, it’s important to create a seamless end-to-end experience for customers by converting and delighting throughout the purchase journey.
Measurement
Measurement helps understand the impact of this marketing. Research shows that companies that develop the capabilities to understand what’s working with their digital advertising can expect to see up to 40% improvement in spending efficiency—and as much as a 10% increase in marketing effectiveness.5 Testing and learning allows businesses to sharpen and evolve their global expansion strategy.
Meta offers solutions to businesses across all of these areas. For example, NEOM, an ambitious project to create a new model for sustainable living in the north-west of KSA by 2030, ran a cross-border campaign with Meta using video ads on Facebook and Instagram to raise awareness of its ambitious city-building project, THE LINE, around the world. This resulted in the campaign effectively reaching over 68 million people from all over the world.
The world is waiting
By building a business model that supports discovery commerce across borders, companies have a chance to reach new audiences and drive incremental sales. The way businesses continue to connect with people is always developing. At Meta, we want to do everything in our power to help businesses thrive across borders, because the world is waiting for their business.
