Limited accessibility to overseas good-quality products online, real-time and cross-border logistics
It is common that products listed on e-commerce websites contain fake product labels, misleading product descriptions, fake product reviews, false claims, etc. Bad actors can open many new accounts on different e-commerce platforms and marketplaces to sell fake products. Counterfeit items have become a major concern for both brands and consumers all around the world, especially on social e-commerce platforms. Fake product reviews have a negative impact on customer purchase decisions. 82% of online consumers have read a fake review in the last year and 62% of consumers have experienced significant variations between online reviews and actual product quality (Invesp, 2020). As a result, consumers might spend more money on low-quality products when it comes to reading reviews for buying decisions. On the customer side, despite paying a large amount of money, they get a low-quality product which exacerbates their online shopping experience. On the brands’ side, online merchants will suffer a plunge in sales.
Nowadays, consumers seek a distinctive value proposition for almost everything they buy online. A good example is the bulk purchase of items that incur a higher cost due to local tax rules or a perceived intrinsic luxury value. In this sphere, customers search for great deals from wholesalers and supermarkets to online apps. Consumers share resources to buy high-quality, brand-familiar products online at prices that cannot be beaten by supermarkets or wholesalers. Group gathering to purchase larger quantities of items enables consumers to share the benefits of an appealing overall discount that substantially reduces the unit cost.
In particular, customers who love to buy good-quality items are now defined and shaped by youth culture: GenZ and Millennials - high earners, not rich yet; however, when deciding where to shop, their primary motivator is price. Making high-end products more affordable and sourcing high-quality goods for this customer segment requires a disruptive approach from social e-commerce platforms.
On the other hand, it’s no surprise that online consumers love low prices, fast and free international shipping. Shoppers also want to know the exact delivery, cost, VAT & import duty charges at the time of the purchases and constantly care about shipping status to keep them assured. However, slow, late and costly deliveries are one of the primary problems for e-commerce businesses around the world. In an international environment, it is generally strenuous to fulfill on-time delivery at a predictable cost because customs regulations and processes worldwide are usually designed for large-scale, repetitive industrial shipments, not for small, unique orders. As the delivery process involved with many parties and middlemen is often fractured and the order-tracking is handled manually, it’s difficult to guarantee a coherent information flow in international online trades. Due to different geographic locations, a streamlined supply chain and automation are costly and not easy to build for online merchants to ensure good quality services. In addition, offering exchange and returns of goods are usually hectic, time-consuming, and dispute resolution is often biased in cross-border e-commerce. Customers have to wait for days for customer support to respond, wherein the majority of cases customer plea for product replacement or order cancellation is even rejected. Customers who experience bad service are less likely to use the same e-commerce brand again, but they are also more likely to give negative feedback that can impact a company’s reputation. These logistics and delivery issues are seriously causing cross-border merchants such consternation and negative customer purchase preferences.