By Kenny Tsang, Managing Director at FinTech Unicorn, PingPong Payments unpacks current trends in the ecommerce space, and what SMBs can do to scale up their operations.

In the current landscape, ecommerce is no longer made up of losers and winners. Businesses and e-sellers, big and small, are today reaping the rewards of staying vigilant during the holiday season, making for a spectacular start to 2022. Ecommerce sales have amounted to $257.62 billion in the last quarter of 2021, up 9.2 percent compared to the same period in the prior year. With almost half of the US ecommerce sector being dominated by Amazon, where over 55 percent of small and medium e-sellers operate, third-party merchants are now looking to scale up their operations. But while the opportunity for growth is there, inflation reaching a four-decade high raises questions around consumer spending and the ability for businesses to maintain momentum. US ecommerce sales are forecasted to cross $1 trillion for the first time in 2022, but who will be there to cross the finish line?

New opportunities in the global market

Domestic businesses going global is the key to success when speaking about expansion. While the growth in the US ecommerce space is undeniable, relying on one market can quickly become the nail in the coffin for many enterprises. After successfully conquering the US shopper, businesses make the mistake of often overlooking expanding markets. In Asia, the ecommerce sectors in China and India are forecasted to reach $3.3 trillion and $120 billion respectively by 2025. China already dominates 40 percent of the global market, with approximately 782 million online consumers, which merchants can win over.

While global markets can seem a daunting new venture, small and medium-sized businesses (SMBs) can today use new tech capabilities to build a robust ecommerce infrastructure. SMBs need to think out of the box, and explore new solutions for ensuring accessible and efficient services to every partner they work with, and their international customers. Country borders should not hinder business growth.

Time is the most precious asset

In the fast-paced world of ecommerce, good timing is what helps businesses operate smoothly in spite of many variables in the global market. Currently, it takes approximately 66 days for payments to go through worldwide and this has an impact on paying partners, staff and suppliers, slowing down operations. Businesses run the risk of building relationships with leading suppliers that do not stand the test of time. The right payments company can help SMBs to stand out from the crowd, by ensuring international transfers are made quickly, in the supplier’s preferred currency. This facilitates the prompt turnover of current and new products, which keeps consumers engaged with the brand. Time is precious for both customers and suppliers and, this is how businesses can capitalize on it.

Mid-market velocity without mid-market headcount

Promoting internal efficiencies leads to substantial operational savings. Scaling payroll and taxation processes into a modern day component of overall utilization, rather than independent solutions, lowers operating costs and pushes SMBs to a level of supplier functionality. Delayed payments, expensive wire fees and complex local legislation are some of the issues businesses encounter when utilizing traditional payroll processes. With VAT added at every stage of the supply chain, tax payments can be hard to track, making it difficult to ensure the right amount is paid on time. Sound payment providers will allow businesses to navigate these complexities, and opting for an all-in-one service that combines such solutions is the way to move forward. This way, businesses can scale up without major investment.

The world moves faster than local banking

When expanding globally, businesses are faced with the dilemma of securing a local bank account and following region specific regulations. To set up an international bank account, suppliers previously needed to have established business components such as staff, tax IDs and a brick and mortar place of business. Setting up all of these elements can take up months, and even when they are ready to set off, SMBs are faced with the fact that banks cannot keep up with their activities. Traditional banks do not operate in the required way to fund suppliers, or keep up with the agility of international sales, often getting lost in the components of the supply chain. Because of this, it is hard for banks to support retailers’ activities. Thankfully, because of emerging fintech solutions, businesses no longer have the same challenges and obstacles in securing traditional banks accounts. Today, there are cross-border payment providers that allow enterprises to set up virtual accounts, along with AWS receiving accounts, in a matter of minutes. SMBs should also search for payment providers that understand the intricacies of ecommerce and have capabilities which have been built with their pain points in mind.

While the last quarter of 2021 is an omen for prosperity in the US ecommerce sphere, reliance on one market is not for those who dream of expansion. By entering the global market, enterprises can improve their product supply and gain new customers. Time becomes a valuable asset when converting a businesses from national to worldwide, and global payments are the common denominator in keeping consumers and suppliers happy. But it goes beyond this – leaders in the ecommerce space will understand the importance of an all-in-one solutions provider who pushes businesses to optimal internal efficiencies. The world is moving at a faster pace than ever, and traditional banking is no longer fit for the ecommerce sector, so enterprises need to redirect their attention to innovative payments solutions.