Prospects in  cross-border  e-commerce

The global cross-border e-commerce market was valued at $578.57 billion in 2019 and is expected to reach $2.248 billion by 2026, expanding at a CAGR (compounded annual growth rate) of 17.4 percent, based on the data from

An UNCTAD report supported these figures with a report that showed that the average share of internet users who made purchases online increased from 53 percent before the pandemic (2019) to 60 percent following the onset of the pandemic (2020/21), across sixty-six countries with statistics available.

This significant uptick in consumer e-commerce activity fueled by the COVID-19 pandemic was sustained in 2021, further to the UNCTAD report, with online sales increasing markedly in value, despite the easing of restrictions in many countries.

Southeast Asia is a hotbed for cross-border ecommerce. It is estimated that by 2023, the region’s cross-border ecommerce gross merchandise value will reach $12 billion, accounting for more than 40% of the total regional E-commerce market.Singapore and Malaysia account for more than 50% of the total cross-border e-commerce, according to a study by Accenture. The report cites Vietnam and the Philippines as two potential cross-border E-commerce markets.

But micro, small, and medium enterprises (MSMEs) in the Philippines have not yet fully leveraged on the potential of cross-border ecommerce. In fact, Amazon described the Philippine ecommerce as “relatively new, but rapidly developing sector.”

Based on the Cross-Border E-commerce Awareness and Perception Report by Amazon in 2021, local MSMEs cited the three critical barriers when selling globally.

First is the difficultly in managing cross-border supply chains and logistics, where 53 percent of Filipino MSMEs surveyed cited this as their top barrier. Second is the high operating costs in selling overseas via ecommerce. Third is the intense competition from international sellers, wherein 71 percent of the MSMEs surveyed admitted that they are not well-prepared to meet the demands and preferences of consumers overseas.

For local MSMEs to take advantage of the growing cross-border ecommerce, they need to adapt to the trends and shits that are shaping the global and regional ecommerce landscape.

First on the list is to learn about consumer and business-to-business market preferences in the regional and global markets. One trend that MSMEs need to consider is that the pandemic has impacted consumer and buyer behavior. Successful ecommerce sellers are now targeting Generation Z and millennials who drive majority of the buying process.

Another is the growing and developing global cross-border payment options. Local MSMEs need to learn and onboard new payment options to reach a broader market. In today’s market, it is not acceptable to offer only single payments options via bank transfers, but consumers expect flexibility in the method of payment. Consumers expect a cross-border payment experience to be secure and transparent.

Local MSME’s can also explore joining regional and global marketplaces that already have access the wider markets. Marketplaces that cater to fashion and design, consumer goods, and other products. Provide the flexibility and reach for sellers from the Philippines.

Lastly and probably the most important, is for local MSMEs to update their digital presence. They need to update their websites to cater to a global market. In addition, their social media presence, such as LinkedIn and Facebook, need to be updated to reach the business and younger market segments.

Indeed, there is enormous potential for local MSMEs to take advantage of the huge cross-border ecommerce market. But they need to be enabled and capacitated as well. Government agencies such as the Department of Trade and Industry (DTI) are continuously running their programs to help local MSMEs build their competencies to compete in the global marketplace.

The author is the Founder and CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the Chairman of the Information and Communication Technology Committee of the Financial Executives Institute of the Philippines (FINEX). He is Fellow at the US-based Institute for Digital Transformation.He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at