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Exporting Boom is Powering Cross-Border Growth

Author: Avalara

Published: 03 Dec 2021

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Ecommerce is becoming truly global and businesses need to adapt.

Online retail is a five-trillion-dollar market – and it’s growing fast. During the pandemic, millions of house-bound consumers embraced ecommerce for the first time, delivering a decade’s growth in a matter of months.

The result? Consumers are getting braver. The benefits of greater convenience and choice provided by sellers from all over the world has triggered a boom in cross-border demand.

The global opportunity is huge, but uncertainty about customs clearance, taxes, and import restrictions in unfamiliar markets is dissuading many retailers from capitalising. Some retailers are choosing not to expand into new territories to avoid the extra cost of compliance and potential fines. And some are even turning off cross-border trade completely.

Red-tape headache

With governments introducing VAT rate changes to fuel growth through COVID-19, Brexit impacting European and UK trade, plus the introduction of both UK and EU ecommerce reforms, this year has brought a tidal wave of change like no other.

The newest start-ups want to scale without the fear of fines and penalties. Every retailer, big and small, wants to maximise the global opportunity without risking their reputation, ensuring customers receive the same smooth experience, wherever they are in the world.

So, while the promise of a global market is that new customers are only a click away, the reality is that each click is a compliance risk that many businesses are unwilling to take.

Getting tax right this holiday season

As the globe begins to find its new, post-COVID 'normal', and both consumers and retailers start to rebuild confidence, the 2021 holiday shopping season looks set to boom. An Avalara study in November 2021 showed four in five UK retailers (79%) are anticipating their biggest holiday season on record this year. However, many are not prepared to take advantage of the sales surge.

But, amid their anticipation, is trepidation too. Two fifths (40%) of retailers feel overwhelmed by tax and compliance obligations, 41% are worried about customs charges and hold-ups, and 43% are anxious about the current supply chain crisis delaying deliveries. Finally, two in five are also concerned that their backend technology won’t support a wave of orders.

Businesses should reach out for help and advice sooner rather than later to ensure they are meeting their obligations. There’s still time to get ‘holiday ready’ with an omnichannel indirect tax compliance strategy to win this seasonal shopping season.

To help retailers and tax teams navigate these pressures, Avalara has created a Holiday Readiness Guide, designed to help businesses get their omnichannel indirect tax strategies in place so they can take advantage of the holiday shopping season boom. Click here to learn more.

*The views expressed are the author’s and not ICAEW’s.