Cross-border selling: Comparing Singapore to Australia

Cross-border selling: Comparing Singapore to Australia

How expanding your sales cross-border can provide sustained growth

During the ongoing pandemic, cross-border payments have increased significantly, as trade across national borders helps fulfill local demand. This boom has been equally beneficial for consumers and sellers alike. For sellers who’ve been able to reach these overseas markets and expand into cross-border selling, substantial sales growth has followed.

To kick-start and maintain growth today as we near a less volatile, endemic COVID era , sellers must ensure they are positioned for continued expansion into new overseas markets and territories.  Looking at the longer-term perspective, having a solid cross-border strategy is widely seen as an essential component of a sustained growth plan. Myriad businesses utilize this strategy, achieving greater sales and increase in the overall resilience of their business-model.

The reasons for expanding your sales into new markets are compelling; by extending your reach to new customers, you gain a rapid expansion of sales volumes and a fresh source of loyal customers.  E-commerce sales in the APAC region alone are expected to double by 2025 (reaching some $2,000 billion USD), and marketplaces are taking a growing share of the total online spend. For retailers and brands, this means marketplaces are the most strategically relevant place to target expansion efforts.

Marketplaces are a critical ingredient in successful cross-border expansion because they make new markets much more accessible. This is true of both established brands in new markets, and new brands looking to launch internationally. These brands get to stand alongside established merchants in an environment (including sales terms, delivery and payment methods, etc.) that shoppers already trust. This substantially lowers the bar to new market entrants in new overseas markets, a far easier and more successful option than establishing the same trust with their own webshop. There is also less risk involved, as sellers can try out and perfect their product offering, service provision, assortment and content, before scaling-up.

The question is, how can you make your cross-border expansion as efficient and successful as possible, be it at launch or expanding an existing business in a post-pandemic world from day one?

Make it a success from the beginning

While there are incredible opportunities, considerable challenges await those making cross-border sales a success. These include setting-up provisions for customer service, returns, shipping, logistics, and issues like sales tax and import duties, amongst others. This can be a steep learning curve for brands considering cross-border sales for the first time. Once the above systems are established, and the wrinkles ironed out, it becomes a much more manageable endeavor.

For this reason, it's recommended (and more effective) to begin cross-border sales with a strategic 'pilot scheme' – choosing one country within a new geographic area and utilizing one or two marketplaces. After you have established the parameters for success, the way is clear to duplicate that successful model across new marketplaces, and subsequently, new overseas markets.

How Singapore and Australia are ideal matches for cross-border expansion

Selecting just one 'similar' market to begin your expansion reduces the work required, with l refining needed for your product offerings, descriptions, and sales terms. This translates to a greater opportunity for success.

Similar trading requirements between countries also means administration and legal compliance are less of a concern than more dissimilar markets. Singapore and Australia are well-matched in this respect; both countries have well-developed and cosmopolitan societies and a global outlook.

This has benefits for selling in both markets:

  • For sellers based in Singapore, the Australian market is an ideal stepping-stone to a broader world of  'western' markets like New Zealand, the USA, Canada, and the EU.
  • For sellers based in Australia, Singapore offers a well-developed market of relatively comparable customers with similar market demands while making an ideal testing ground for further expansion into other Southeast Asian (SEA) markets like Malaysia, the Philippines and Vietnam.

Singapore and Australia boast well-developed economies and use English as a primary language, making both countries well-suited as trading partners. Numerous other similarities make Australia and Singapore attractive markets for marketplace sellers to expand into, and these features contribute to stronger odds for success.

Similarities between the e-commerce markets in Singapore and Australia:

Similarities between the e-commerce markets in Singapore and Australia

  • Transport: Both countries are well-connected, relatively nearby, and have regular transport links. The transport infrastructure and fulfillment options in both countries are well-developed.
  • Tastes and demands: Consumers in Singapore and Australia have similar tastes and demands. Brands are always appreciated. Quality goods will always find a buyer in both countries.
  • Product categories: Fashion and Lifestyle are strong product categories in both countries. The Australian market also makes a prime target market for technology and electronics products from established brands in Singapore.
  • Shipping: Singapore and Australia have a variety of logistics options to choose from, including warehousing and Third-party Logistics (3PL) providers which can offer end-to-end services. Due to the significant distance, goods must be shipped to customers from within their own country to meet their expectations. Inventory will need to be located in the destination country using your own solution or providers in the ChannelEngine ecosystem. Customer expectations are also very similar; they expect clarity and communication regarding shipping times and shipping rates either included in the price or set at a very low level.
  • Import Duties: Trade agreements between Singapore and Australia, primarily the Singapore-Australia Free Trade Agreement (SAFTA), make trading between the two countries very easy. There are no import tariffs on goods sold or shipped between the countries, provided the products originate in two countries. Different rules may apply if the product originates elsewhere, partially or wholly.
  • Taxes: Goods and Services Tax (GST) will generally apply to all sales within a country, and this can be automatically calculated and summarized by the ChannelEngine system. Using a Merchant of Record is key to making the financial administration as cost-effective as possible as this simplifies the process and saves many hours of work.

Selling to the Singapore market

Selling to the Australian market 

  • The biggest marketplaces in Singapore are Shopee, Lazada, and Amazon. Both Shopee and Lazada require sellers to use specified 'last mile' delivery providers. This needs to be considered when establishing partnerships with a 3PL provider.
  • Amazon is a smaller player here but still has a respectable market reach. If you're already selling via Amazon in Australia, expanding into Singapore using Fulfillment by Amazon (FBA) is very easy. If not, it's equally easy by connecting with ChannelEngine and using partners for third-party services (like logistics and warehousing) from the ChannelEngine ecosystem.

  • Another key difference is the influences behind consumer behavior. This is driven by the consumers themselves in Singapore, who have strong demands that shape the market. They appreciate quality, imported goods - and brand names are desirable.

  • Australia has a more 'open playing-field which gives fantastic opportunities to 'new' brands looking to make an impact on a new audience.

  • There are many marketplaces, which equate to more market niches and opportunities to find a suitable customer base more efficiently.

  • The consumers are more strongly influenced by the sellers and the products on offer – they are welcoming of new items and brands, and the market has an entrepreneurial quality. This makes it an excellent place for smaller brands to establish themselves.

  • Australians are also conscious consumers who prefer goods with a reliable and ethical provenance. They expect quality manufacturing that respects both people and the environment, so brands offering low-carbon-footprint goods have a fantastic opportunity here.

  • There are many ways for sellers to use partners for logistics and warehousing in Australia. There are not the same restrictions we see in Singapore regarding last-mile delivery. eBay now offers an end-to-end 3PL solution via their partner Orange Connex (based in Sydney), and Amazon also offers their FBA solution, for example.

How to kick-start cross-border selling in 7 steps:

  1. Choose your new 'forward base': Singapore (to expand into SEA, with larger volumes, more growth potential) or Australia (easier GTM because of western culture, but smaller market, higher average order value)
  2. Set up your legal entity in that country, or use a Merchant of Record
  3. Choose/set up your fulfillment/shipment (3PL, own fulfillment/warehouse, fulfillment by marketplace, Merchant of Record)
  4. Marketplace set up: Activation of your marketplace account, Product Listings, Marketing activities, and promotions. Set up Customer Service (incl. Returns), and start selling.
  5. ChannelEngine implementation: Integrate your existing backend and inventory with ChannelEngine. This will streamline optimization processes (incl. Product content, Categories, and Pricing) from the beginning by using the dashboard insights and automation tools. ChannelEngine makes the expansion of sales on multiple marketplaces even more manageable going forward.
  6. Measure your successes: Identify what works and use your knowledge to expand better, moving forward.
  7. Scale-up: Grow your successful sales rapidly across multiple new marketplaces, and expand into additional markets, using your new knowledge and market-optimized listings/offerings. ChannelEngine makes this incredibly easy to manage and offers the support of an ecosystem of global partners who can fill the gaps where needed. This can include expert advice, shipping, logistics, warehousing and fulfillment, amongst other services.

Once you've dipped your toe into your new market of eager customers, you will have a clear picture of how it can boost sales. You'll also have gained a clear vision of how to overcome the challenges involved in making this a success. By starting your market expansion in a country that has a lower threshold to entry, you gain the experience and knowledge you need to plan further development and make it more successful with minimal risk.

Does this sound like a great opportunity for your business? ChannelEngine’s complete e-commerce and marketplace management suite, strong partner ecosystem, and the local team will help you rapidly grow your customer base and sales. Request a demo and learn how to make a smooth connection to some of the most promising global marketplaces.

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