Claire Prance, Commercial Director for Warehousing, Distribution, and E-Fulfilment, at SEKO shares insights on expanding market share overseas to overcome domestic market challenges. 

Consumers are tightening their belts, posing a significant challenge for fast-growing businesses, says Claire Prance, Commercial Director at SEKO. Fuel prices are rising, and next year, many will see their fixed-rate mortgages come to an end. These factors will make it harder and more costly to retain and acquire customers.

“Even in these challenging economic times, businesses aim for profitability,” Claire says. “A common strategy is to focus on gaining market share initially and then shifting towards profitability. To achieve this customer experience is paramount. It involves having a good product at the right price and delivering excellent service.”

In this article, Claire explains why cross-border shipping stands out as one of the best ways to mitigate domestic market difficulties.

 

What are cross-border logistics strategies?

Cross-border logistics strategies are approaches and tactics used by businesses and organisations to expand their operations, reach, or influence beyond their home country's borders. These strategies are typically employed when a company seeks to enter new international markets or conduct business activities in multiple countries. Successful cross-border strategies often require careful planning, market research, and a deep understanding of local conditions and cultural differences. 

 

What are the benefits of cross-border strategies?

  • Market diversification - Expanding internationally allows businesses to reduce their reliance on a single market.
  • Increased revenue and growth - Access to new markets can lead to revenue growth, increased market share, and profitability  
  • Economies of scale - Operating in multiple markets can lead to cost savings through increased procurement efficiencies, and distribution optimisation. 
  • Competitive advantage - Entering new markets can provide a competitive edge by offering products or services not readily available to local competitors.
  • Resource optimisation - Cross-border strategies can help businesses make better use of resources, including tech, expertise and intellectual property.
  • Brand building - Expanding internationally can enhance brand recognition and reputation, both locally and globally. 
  • Diversification of risk - Operating in multiple countries can mitigate risks associated with economic, political, or market-specific issues. 
  • Global network and partnerships - International expansion can lead to valuable partnerships, collaborations, and networking opportunities. 
  • Enhanced profit margins - Entering markets with favourable economic conditions or pricing structures can lead to a higher profit margin.
  • Regulatory arbitrage - Businesses can benefit from differences in regulations, tax policies, or trade agreements between countries. 

 

New frontiers: finding the right 3PL provider for you

Cross-border trade involves selling goods from a domestic country to another party abroad, whether between a retailer and consumer (B2C) or between businesses (B2B). According to McKinsey, only about 8% of total SMEs in the EU, less than half of online businesses, sell to other EU countries, but adds that it is essential for their prosperity.

“Cross-border trade is about finding and growing your market share in non-domestic markets,” Claire explains. “In the UK, we often target English-speaking or European markets due to cultural or geographical proximity, respectively. It's about gaining resilience against domestic economic forces by finding new customers in those markets and cross-border logistics companies and services facilitate selling and delivering products to these markets.”

Claire highlights that logistics providers like SEKO have a robust global network for eCommerce order facilitation. Products can be shipped either from your domestic warehouse or 3PL warehouse. Choosing the right logistics provider is vital.

“If you're a medium-sized business with global ambitions, you're seeking a provider with both a global reach and a responsive approach, valuing your business as a significant client. Being lost among huge brands is a concern. It's about choosing a company eager to cater to you.”

 

Unlocking more markets, maximising returns

Cross-border trade negates the need to establish physical stores, find local distributors, or navigate some local tax complexities, all of which can be costly. It’s an effective way to maintain profit margins while minimising capital outlay.

Though not without challenges, cross-border trade may result in longer transit times for customers in remote regions. Here, Claire underscores the importance of managing customer expectations, providing effective communication, and offering comprehensive tracking, a streamlined returns process and transaction refunds.

“When you notice particular interest in a market, businesses can set up a regional stockholding. If your customers frequently shop from Germany or the USA, it’s an excellent way to dip your toe in the water and boost market share. One of my favourite examples is a business called Manscaped, which established a distribution centre with us in the UK to serve the EMEA region,” she explains. “They found success in both the UK and Europe. Recently, they opened a SEKO warehouse in Rotterdam, the Netherlands, to achieve quicker transit times for EU customers, enhanced service, and financial benefits.”

 

Future trends and opportunities in cross-border logistics

SMEs looking ahead need to prepare for forthcoming challenges. The European Commission predicts average growth for the 27-member Eurozone at 1% in 2024, although many anticipate a worse scenario as the effects of higher interest rates permeate the economy.

We have outlined the possible future trends in cross-border logistics below and the impact these might have on businesses.

 

Increasing demand for eCommerce

The demand for eCommerce and online shopping continues to grow and as a result, so has the demand for cross-border logistics. As more and more people seek products from other countries, the need for transporting goods across borders increases.

Claire advocates that cross-border eCommerce logistics solutions are a great way to mitigate the risks posed by future challenges for SMEs. 

“Many young, fast-growing businesses that found their customers online, usually via marketing or social media like TikTok, have experienced substantial growth in recent years. However, upcoming economic challenges could potentially stall that growth. By finding international customers, you can maintain the momentum and position yourself strongly for more favourable economic conditions.”

 

Utilisation of data and analytics

With data analytics tools now readily available, it is becoming easier for companies to extract and extrapolate data about the effectiveness of their cross-border logistics strategies. 

Analysing data can give companies insight into their processes and help them make informed decisions about optimising and improving operations and supply chain performance. 

 

Advancements in technology

Advancing technologies such as robotics and Artificial Intelligence (AI) are also likely to impact cross-border logistics. 

As processes become increasingly automated, the way companies transport, store, and deliver goods will change. AI will also make it easier for companies to optimise transport routes, reduce delivery times, and minimise environmental impact. 

Technological advancements will ultimately help businesses operate more efficiently and improve the speed and accuracy of their operations.

 

Increasing focus on sustainability and the environment

People are becoming increasingly concerned with the environment and there is higher demand for companies to operate in an eco-friendly way. 

Implementing sustainable practices into supply chain processes such as using electric vehicles and renewable energy sources will have a positive impact on the environment whilst also boosting your reputation as a business.

 

SEKO Logistics: speak with our logistics experts today

With over 40 years of expertise, SEKO is committed to offering client-first solutions to your logistics issues. Our advanced technologies and extensive global network allow us to provide end-to-end logistics solutions and help make your global expansion simple.

For further insights on how SEKO can assist your business with cross-border strategies, reach out to a member of the team.