By Marius Costin, Head of EMEA High Velocity Sales & US Global Account Team at PayU

As many parts of the world begin to emerge from the COVID-19 pandemic, one thing is certain: e-commerce is here to stay. In fact, reports have shown that by the end of this year, global online sales may reach upwards of $4.2 trillion. As such, many retailers the world over have naturally switched focus to online channels since the onset of the pandemic. But in order to truly leverage the boom in e-commerce, retailers must ensure that digital solutions remain at the heart of any growth strategy.

Another key area for merchants to consider is looking beyond their own borders, and seeing how they can tap into high-growth markets. In regions like Latin America and Africa, the e-commerce opportunity can be huge if approached correctly. For example, PayU’s recent report, The Next Frontier: the most promising markets for emerging e-commerce leaders in 2021 and beyond, found that there has been significant e-commerce adoption in high-growth regions that are often overlooked in favour of more traditional, Western markets.

While it’s true that e-commerce has seen huge growth in exciting markets around the world, as a global phenomenon, it can be a daunting and laborious task for merchants who have little experience in cross-border sales and payments. Merchants must first familiarise themselves with a range of factors, from local regulation and preferred languages to currencies and payment methods. Only by doing this will they successfully penetrate any new market.

Understanding market nuances 

The first step of entering any market is establishing the growth opportunity present. Take Latin America – e-commerce demand was already witnessing a rapid rise before the pandemic and 2020 pushed revenue even further, with the market expected to reach $160 billion in online retail by 2025. PayU data suggests that beauty and cosmetics retailers would benefit the most from a Latin America expansion. In fact, the sector has grown by 133% in Latin America and reached nearly $3.8 billion in the past year alone.

While appealing, merchants must also recognise that expanding their customer base in foreign regions is complex and requires in-depth knowledge of the local payments ecosystem. Take Brazil as an example. In February 2020, Brazil’s central bank vowed to bring financial system interoperability by reducing consumer barriers to financial inclusion while also reducing costs of accessing financial systems for consumers. As such, it launched QR-based instant payments which are expected to become so popular that they will account for 25% of all online payments within three years. To ensure a high rate of sale conversions, merchants looking to tap into the Brazilian market should offer solutions that enable consumers to use these QR code-based payments.

Meanwhile, in other high-growth markets like South Africa, governments are creating innovative trading environments for merchants to operate in. Merchants who already operate in the region as well as those new to  the market, can capitalise on the new African Continental Free Trade Area (AfCFTA) agreement, offering an easier and less costly route to accessing these new markets.

Understanding market nuances and customer preferences can be a monumental and costly task for many merchants, particularly those who are new to international sales. Therefore, it is in their best interest to find the right partners within the market that help make the process as smooth as possible.

Choosing the payments provider for you 

A key element of expanding into new markets is finding the right payments partner. However, identifying the most appropriate partner can be confusing, especially when considering the myriad of options to choose from. That said, the benefits of an integrated and holistic solution that offers consumers and merchants a seamless and efficient transaction experience will not go unnoticed.

When faced with making this decision, merchants should carefully consider a payment partner’s cross-border knowledge and their ability to provide innovative technology and payment solutions. For example, the PayU Hub gives merchants access to over 50 markets, the ability to process over 400 local and international payment methods instantaneously while also settling transactions in different currencies.

While the above is important, it’s also crucial to consider a payment provider that guarantees security over consumer data. Research by TransUnion has revealed that global online fraud has increased by 46% since the COVID-19 pandemic. With more consumers reliant on digital payments than ever before, merchants must ensure that every aspect of the payments ecosystem includes protection over customer data.

Recognising the future of international e-commerce 

As an end to the pandemic becomes increasingly possible, cross-border e-commerce will be key for reaching a new growth trajectory. Those equipped with unrivalled market knowledge and tech offerings that cater to each unique and nuanced market will be the ones that succeed.

Tapping into high-growth markets like Africa and Latin America offers merchants access to billions of potential consumers. But in order to ensure success, merchants must look to payment providers that offer a frictionless payment experience and local market expertise that simplifies the process of international expansion.