Internal and External Factors Affecting Sustainability in Cross Border E-Commerce

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For online sales-oriented businesses such as e-commerce and e-export, question marks may arise from time to time regarding sustainability.

Like in every other sector, questions are raised about the sustainability of online-focused businesses such as cross border e-commerce from time to time. E-commerce businesses sometimes end in disappointment both in our country and the world despite having advantages like not being limited by physical outlets, the ability to reach a wider audience in a short period and rapid growth compared to traditional sales channels.

This kind of unexpected ends could be related to external factors or managers’ inaccurate strategies, and in some cases, both of these can happen and result in poor crisis management. So, what is the state of sustainability in e-commerce in Turkey and the world? What are the things that should be paid attention to survive in cross border e-commerce ecosystem for the long term? Here are the answers…

External Factors Preventing Sustainability in E-Commerce

It is possible to separate the factors that threaten the sustainability of e-commerce as “external factors” and “internal factors”. Whether you do domestic or overseas focused e-commerce, there might be some negative effects outside of your control due to some significant changes. Because of these changes which are impossible to guess or prevent, it is necessary to think about what to do when they happen.

Economic Recession:

2008 Economic Recession affected e-commerce negatively in the world and our country in the last few years just like many other factors. The effects of the financial problems that caused a lot of ventures and mainly a couple of big e-commerce sites to shut down still continue. In a situation like this; flexibility, and being prepared for new ideas and actions play a crucial role. For example; product diversification, making overseas sales or offering discounts and promotions are essential to preserve customer loyalty and attract new potential customers.

Developments in the World:

Although “developments in the world” is a general idiom, it affects the people in cross border e-commerce more. If you are especially doing business with a country that has political, geographical or economic risks; a political dead-end, a military coup, a natural disaster or an economic crisis can impact your trade severely and if your business is limited to only a few countries, it might halt your business altogether. Similar situations can also be observed in different cities in our country.

For example; a terrorist attack or a strong flood might affect the logistics of a city negatively and stop businesses temporarily. Even it is hard to say what is going to happen in which city or country, it is beneficial to know places where the commerce is going to happen, not being limited with only one country and always to have a B plan.

Relations between Countries:

Our country’s close relations with any country leads to strong commercial relations, low or no taxes and easiness in customs transactions. However, when the exact opposite happens, the sustainability of online commerce businesses gets threatened. The tension between countries makes it difficult for people or organizations who make a trade within those countries. Naturally, this type of situation is one of the factors that threaten the sustainability of e-commerce. This also creates one of the riskiest sides of working with only one country or region in e-export. When working with as many as countries possible, a relations crisis between countries only affects a part of your earnings rather than all of it.

Internal Factors Preventing Sustainability in E-Commerce

There may be no way to prevent external factors but one of the main reasons that an e-commerce site comes to a dead-end, is uninformed, inexperienced management or wrong strategies, and with the use of some methods it is possible to prevent these internal mistakes from happening. Although the internal factors that threaten the sustainability of e-commerce seem competition related, they might also happen because of different reasons.

Being Unable to Cope with Competition:

In the early 2000s, e-commerce was an alien concept to many people. Those who had successfully implemented their system in that period are among today’s biggest shopping sites in Turkey. Because of the few alternatives in both e-commerce and cross border e-commerce, limited competition, and curious customers, everything about the operation was perfect for both the suppliers and consumers until 2005. There were only a few e-commerce sites in the whole country. Customers were slowly but surely beginning to trust online shopping. This lasted until 2005 at most, and after that, it became more and more various with the emergence of second-hand sellers and those who sell what they want in their shopping sites. In the meantime, the competition got fierce day by day. But today, a cross border e-commerce site can only make its name known if it manages to create a difference in terms of price, product or process. Otherwise, a shopping site tends to disappear among thousands of similar sites.

Reaching Potential Customers is Getting More Difficult:

In the early years of online commerce, the people who know shopping online only knew a couple of internet sites and almost all of them shopped from those sites. For this reason, making its name known and reaching potential customers did not require that much effort. Even though there are tools that make it easier to reach potential customers, such as digital marketing and social media in today’s world, customers do not pay regard to these initiatives because they are subjected to a great variety of stimuli.

At this point, choosing promotional activities that can go viral, and making a difference in price, product or delivery processes to turn potential customers into customers instead of preferring one of the thousands of similar advertisement projects is essential. For example, the delivery process in our country can still take too long and troublesome. An e-commerce site that guarantees delivery in two days can distinguish itself among others.

Unplanned Growth:

One of the main mistakes that start-up or newly founded firms make are unproductive resource utilization and other operational deficiencies. When starting a business, the tendency to buy the best office equipment, careless resource usage, and many others, create a wrong strategy right from the start and when things do not go as planned all of these efforts go to waste. Instead of this, getting just enough equipment and personnel needed to run the business is crucial for sustainability in online commerce.

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