The world is getting smaller — at least from the perspective of manufacturers and retailers selling goods to consumers.
Scott Galit, chief executive officer of Payoneer, the New York-based e-commerce payment supplier and a member service provider of MasterCard, said online marketplaces such as Amazon and Alibaba as well as Azada in Indonesia and Jumia in Africa are transforming how products are sold globally.
“There’s an incredible amount of change occurring around the globe, and it is impacting how consumers buy goods,” Galit said adding that e-commerce sites are evolving into robust business-to-consumer platforms where goods are sold without holding any inventory.
Galit noted that year-over-year cross-border sales volumes have swelled 208 percent from 2014 to 2015. The bulk of the sales are from Asian companies to buyers and consumers across the globe. Galit said the sales momentum includes both goods being shipped out of Asia as well as Asian consumers buying more products from U.S.- and European-based suppliers.
Payoneer expects e-commerce sales to reach $3.5 trillion over the next five years, which would be just more than 12 percent of total, global retail sales. Global e-commerce sales currently garner about 10 percent of total retail sales, according to eMarketer.
China continues to dominate with the most volume growth. In 2015, cross-border sales volumes from China via online marketplaces experienced a 230 percent growth rate, which is on top of a 207 percent gain in 2014. This compares to a 62 percent sales volume gain in Japan. Regarding relative size of the market, Payoneer said cross-border sales from China in 2015 were 10-times that of Japan and 35-times that of South Korea.
But Galit said new markets are emerging in Malaysia, Thailand, Indonesia and the Philippines, which are all seeing year-over-year cross-border sales volumes gain more than 120 percent.
Also, it is not just manufacturers and suppliers selling directly to consumers all over the world, but traditional retailers with well-known brands as well as smaller, niche companies. And fashion apparel brands are gaining importance in these marketplaces. In China, for example, e-commerce companies such as JD.com have experienced triple-digit growth in apparel and footwear, which is why the company has expanded with online flagship stores for Calvin Klein and Gap, among others.
For Payoneer’s part, the company is positioning itself as a “leading online payments” firm that makes cross-border payment transactions safe and easy for the consumer as well as the supplier, which includes a growing number of smaller-sized entrepreneurs. Galit said many of these small businesses have seen sales expand rapidly because Payoneer removes the barriers previously associated with international payments.
For example, a low-volume apparel supplier in Malaysia would need a U.S. bank account to receive payments from consumers or merchants in the U.S. But Payoneer removes that barrier.
The company operates in 200 countries, and accepts 150 currencies.