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Kenny Tsang

Innovation

E-commerce Innovations Online Businesses Can Capitalize on in 2022

Online vendors must be prepared for an increasingly unpredictable year ahead

Published: Monday, March 21, 2022 - 12:02

The e-commerce industry is forecast to see substantial growth in 2022. Retail e-commerce sales in 2021 totaled $4.9 trillion, and may reach $5.42 trillion this year. Exponential growth in the sector has given rise to an ecosystem of millions of third-party sellers on sites such as Amazon that make up more than 55 percent of all sales, all vying to source and sell as quickly and cost-efficiently as possible.

However, traditional banks have failed to service sellers’ needs. Moreover, the added pressures of shipping bottlenecks and warehouse disruption have contributed to a harsh logistics environment for vendors, so much so that Lake Superior State University chose the term “supply chain” for its Top 10 “Banished Words List” in 2021.

Online vendors must be prepared for an increasingly unpredictable year ahead, in which anticipating the challenges of tomorrow will define success. These are some of the innovations sellers can use in 2022.

An innovative supply strategy

The longer a product takes to get from supplier to consumer, the less likely the customer is to repurchase from that seller, which will delay capital realization. This issue has hit the pockets of online sellers across the country during the supply chain crisis of last year, with the U.S. government recently spending $241 million attempting to ease the squeeze on ports.

As the crisis enters a new year, e-commerce vendors must prepare for renewed supply chain pressures by diversifying their strategy. Increasing the number of global suppliers a business relies on lessens its supply chain risk and allows the seller to access an eclectic variety of markets. For example, although China is the sourcing capital of the world, countries such as Vietnam, Bangladesh, and Thailand are opportune destinations enjoying supplier booms.

Sellers also need to consider critical cutoff dates for the fulfillment of products before major shopping holidays, as overstocking can be as big of a problem to businesses as understocking. Forward-thinking retailers will ensure the fulfillment of their inventory using tech-enabled tools to track and anticipate purchasing trends, using an end-to-end, cross-border payments partner to streamline and expand their supply chain in 2022.

Cross-border growth

Cross-border selling is an expanding phenomenon in the e-commerce world. For example, 50 percent of the top 500 North American online sellers now sell their products across multiple marketplaces, up 32 percent in 2020. This upward trend shows that merchants rapidly realize the opportunity that selling internationally presents.

The dynamic, cross-border merchant can sell products to an audience of more than 500 million customers globally and reach 170 countries at the click of a button. Taking advantage of markets outside the United States could prove invaluable to hitting profit targets. The United State accounted for only 19 percent of all retail e-commerce sales in 2021, with the United Kingdom, China, Japan, and Germany all paving lucrative roads for marketplace growth.

As merchants look for customers globally in 2022, cross-border selling has become a necessity rather than an option for any ambitious business. Identifying product trends and the most popular marketplaces in key e-commerce growth regions can take retailers to the next level.

Changing payments methods

U.S. inflation is set to spike again this year, with the consumer price index jumping 7.3 percent in January compared to a year ago, the largest yearly advance since 1982. This additional expenditure can affect online sellers’ profits; stunted growth and loss of valuable customer traffic could demote them to the back pages of marketplaces like Amazon and eBay.

Costly, traditional cross-border payment methods, such as international banking transactions, meant e-commerce vendors were exposed to unpredictable variables and arduous paperwork, and were at the behest of banking intermediaries charging arbitrary fees for their service. However, digital methods of payment can safeguard sellers from the inevitability of inflation and currency fluctuation; businesses can redirect funds back into their operation and save time on unnecessary paper-based processes.

Modern cross-border payment methods, such as business e-wallets and international-supplier payment solutions, can revolutionize the payments process by keeping the cost of transferals low and speeding up an end-to-end process that has historically faltered. The diversification of supply chains and a prompt payments infrastructure can improve the trust in meaningful supplier relationships worldwide—all crucial factors in an increasingly globalized world.

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About The Author

Kenny Tsang’s picture

Kenny Tsang

Kenny Tsang is the U.S. CEO and managing director of fintech unicorn PingPong Payments.