A cross-border business is any company that operates in more than one country. This might involve trading goods and services internationally, making investments in foreign markets, or setting up operations such as manufacturing or service provision in multiple locations.

The internet and digital technology have made it much easier for businesses to become cross-border, with global cross-border e-commerce market value expected to increase from US$551 billion in 2025 to US$2 trillion by 2034. By expanding beyond their home country, businesses can access new customers, diversify their operations, and potentially benefit from lower costs or different regulations.

While cross-border businesses offer many opportunities, they also present unique challenges. These can include navigating different legal systems and cultural norms, managing fluctuations in exchange rates, and ensuring compliance with regulations in multiple jurisdictions. Despite these challenges, the potential rewards of tapping into global markets continue to attract companies to cross-border operations.

Below, we’ll explain how to start a cross-border business, the potential benefits and challenges of selling across borders, how to decide which countries to sell in, and cross-border selling options.

What's in this article?

• What is cross-border e-commerce?
  
• What are some examples of cross-border commerce?
  
• Benefits and challenges of selling across borders
  
• How to decide which countries to sell in
  
• How do I start a cross-border business?
  
• Cross-border e-commerce glossary
  
• How Stripe Payments can help
  

What is cross-border e-commerce?

Cross-border e-commerce is the sale of goods or services between a business and a customer located in different countries. Essentially, any transaction that crosses an international border falls under this umbrella.

For modern businesses, cross-border commerce is a core strategy. By removing geographical boundaries, the internet allows companies of any size to launch globally from day one, expanding their total addressable market from a single country to the entire world.

Cross-border sales are growing faster than domestic e-commerce. Businesses that optimise for international buyers open up entirely new revenue streams that aren't tied to the economic conditions of their home market.

What are some examples of cross-border commerce?

Cross-border commerce refers to transactions in which the buyer and seller are located in different countries. Here are some common examples of cross-border commerce.

E-commerce platforms

• International retailers: Companies such as Amazon and Alibaba facilitate the sale of products across borders. Customers can purchase goods from different countries and these platforms handle logistics, payment, and customs clearance.

• Niche marketplaces: Platforms such as Etsy or Farfetch specialise in specific categories (e.g., handmade goods, luxury fashion), connecting international buyers with sellers from around the world.

Digital services

• Software-as-a-service (SaaS): Businesses such as Salesforce and Microsoft provide software services globally, allowing users in different countries to subscribe and use their software online.

• Content streaming: Services including Netflix and Spotify offer digital streaming, and are available in many countries. These services adapt content to regional languages and preferences.

Supply chain and manufacturing

• Outsourced manufacturing: Companies such as Apple design products in one country and manufacture them in another to take advantage of lower labour costs and expertise in manufacturing.

• Automotive industry: Major car manufacturers such as Toyota and Volkswagen operate production facilities in multiple countries, assembling vehicles and shipping them to many different markets.

Financial services

• Cross-border banking and payments: Banks and financial institutions offer services that facilitate international trade and commerce, including foreign exchange services, international money transfers, and cross-border banking solutions.

• Cryptocurrency transactions: Cryptocurrencies enable direct, peer-to-peer transactions across borders without the need for traditional banking systems.

Tourism and travel services

• Booking platforms: Companies such as Booking.com and Airbnb enable travellers to book accommodations and experiences in different countries and support multiple currencies and languages.

• International airlines: Airlines operate internationally, selling tickets to customers from different countries and navigating complex international aviation regulations.

Professional services

• Consulting and legal services: Firms including McKinsey, PwC, and international law firms provide consulting and legal services to clients globally. Often, this involves cross-border legal, financial, and Business strategies.
  

Educational services

• Online education platforms: Coursera and edX offer courses from universities worldwide, allowing students from any country to enrol and learn remotely.

• International student recruitment: Universities and colleges market their programs to international students, providing education services across borders.

Benefits and challenges of selling across borders

Selling across borders can create benefits for your business – and some challenges.

How to decide which countries to sell in

Deciding which countries to sell in involves a strategic assessment of your business's objectives and capabilities, as well as the relevant features of each potential market. You'll need to ensure that the chosen markets align with your long-term business goals and strategic direction. You'll also need to ensure that you have the resources necessary to enter and sustain operations in these markets, including financial resources, access to employees, and local partnerships.

Here’s a brief overview of what to research and assess when considering new markets.

• Consumer demand: Identify markets where there is a strong demand for your products or services. Use market research data, consumer trends, and competitive analysis to gauge interest.

• Product fit: Consider whether your offerings meet the needs and preferences of customers in these markets.

• Economic stability: Look for countries with stable economic conditions, as they are more likely to provide a reliable environment for business operations.

• Purchasing power: Prioritise markets with higher customer purchasing power to maximise revenue potential.

• Trade laws and regulations: Understand the legal framework of each market, including import and export regulations, tariffs, and taxes. Consider countries with more straightforward regulatory environments.

• Intellectual property protection: Ensure the countries have strong laws to protect your intellectual property.

• Level of competition: Analyse the competitive environment. A market with fewer competitors, or where competitors are not fulfilling customer needs, could represent a good opportunity.

• Barriers to entry: Consider markets with lower barriers to entry to reduce initial costs and complexity.

• Cultural barriers: Evaluate cultural differences that might affect the marketability of your products or services. Consider language, customs, and customer behaviour.

• Localisation needs: Assess the extent of product adaptation required to meet local tastes and legal requirements.

• Supply chain infrastructure: Choose countries with reliable infrastructure for logistics, including transportation, warehousing, and distribution networks.

• Shipping costs and times: Consider the impact of logistics on cost and customer satisfaction.

Marketplaces to consider

When choosing a marketplace for cross-border e-commerce, consider your specific business needs and goals. Choose marketplaces with a strong presence in regions where your target customers live and platforms that support your product type and brand image. Evaluate the costs of listing and selling on each platform – including commissions and shipping fees – and evaluate the back-end support, ease of setup, and the level of customer service that the marketplace provides.

Here are some of the major online marketplaces for cross-border e-commerce and
what they offer.

• Amazon: Amazon has a strong global presence, with specific platforms for the US, Canada, the UK, Germany, India, Japan, and more. It's best for a wide range of products including electronics, apparel, and home goods. Key features include strong logistics (fulfilment by Amazon), a large customer base, and Prime membership benefits.

• eBay: eBay has a global presence in over 190 markets. It's suitable for a wide range of items, from new products to secondhand goods and collectables. Key features include an auction-style sales model in addition to standard product listings and a broad array of categories.

• Alibaba/AliExpress: Alibaba/AliExpress are China-focused with a growing international presence. They're best for manufacturers and B2B sales, though Alibaba is popular for B2C with over 200 million active buyers worldwide. Key features include access to a large manufacturer base and bulk purchasing options.

• Rakuten: Rakuten has a strong presence in Japan, with additional presence in the US, Europe, and other parts of Asia. It's best for a variety of products, similar to Amazon, but with a substantial focus on Japanese customers. Key features include a loyalty points system and personalised storefronts for sellers.

• Etsy: Etsy has a global presence that's particularly strong in the US, the UK, Canada, and Australia. It's best for handmade goods, vintage items, and crafts. It's known for supporting small artisans and crafters, and for its strong community environment.

• Mercado Libre: Mercado Libre is dominant in Latin America, including Mexico, Brazil, and Argentina. It's best for a wide range of products, similar to Amazon, and features an integrated payment system (Mercado Pago) and logistics services.

• Shopee: Shopee has a strong presence in South-East Asia and Taiwan, and it is expanding its Latin American presence. It's best for electronics, fashion, household goods, and more. Key features include a mobile-centric marketplace, free shipping, and promotional support for sellers.

• JD.com: JD.com is mainly in China, with some international shipping options. It's best for high-quality goods – from electronics to luxury items – and its features include a direct sales model, strong quality control, and strong logistics infrastructure.

• Zalando: Zalando is primarily focused in Europe, and it's best suited for fashion and lifestyle products. Features include a large customer base interested in fashion and partnership with local and international brands.

• Cdiscount: Cdiscount has a strong presence in France, with offerings to other European markets. It's best for a broad range of products, similar to Amazon, with a focus on French customers. Key features include competitive prices, strong seller support, and a loyalty programme.

Cross-border selling options

When it comes to cross-border selling, businesses have a few different platforms to consider.

• International marketplaces: Platforms such as Amazon, eBay, and Alibaba have a vast reach and established customer base, making it easier for businesses to enter new markets. But competition can be fierce and sellers on these platforms might have limited control over their branding and customer experience.

• Localised websites: Creating dedicated websites for each target market gives businesses greater control over branding, messaging, and the overall customer experience. However, it also requires a bigger investment for translation, localisation, and marketing efforts.

• Third-party e-commerce platforms: Platforms such as Shopify and BigCommerce offer a range of tools and features to support cross-border selling, including multicurrency support, language translation, and international shipping integrations. These platforms can be a good option for businesses that want a simpler approach.

• Direct-to-consumer (DTC) model: Selling directly to consumers through your own website or online store gives you full control over the customer experience and brand image. But it requires major investment in marketing, customer acquisition, and fulfilment.

• Partnerships with local distributors: Partnering with local distributors or retailers can help businesses overcome logistical challenges and gain access to established distribution networks. But those businesses might have to share profits and yield some control over the brand.

How do I start a cross-border business?

Here are some tips for how to start a cross-border business.

• Conduct market research: Determine where there is demand for your products or services. Learn about cultural norms and consumer behaviour in the markets you are targeting, and examine the legal and regulatory framework of the countries where you plan to operate.

• Develop a business plan: Create a market entry strategy, deciding whether to enter through a subsidiary, a partnership, or direct exports. Prepare detailed financial forecasts including costs, revenues, and break-even analysis. Identify potential risks and develop strategies to mitigate them.

• Establish legal and tax structures: Choose a business structure (e.g., foreign branch, subsidiary, joint venture). Research tax regulations in each market where you’ll be operating and secure your intellectual property rights in every jurisdiction.

• Set up banking and finance: Set up bank accounts that can handle multiple currencies and understand foreign transaction fees. Research options for funding including international loans, venture capital, or government grants.

• Build a global team: Build a management team with international business experience and consider hiring local employees who understand the business environment. Provide cultural sensitivity training to your staff to improve communication.

• Create a logistics strategy: Develop a strong supply chain that can handle international shipping and customs. Establish efficient distribution channels to ensure your product reaches the market.

• Develop a marketing strategy: Adapt your marketing strategies to fit cultural preferences and local market conditions. Use digital marketing and social media to reach a broader audience.

• Implement technology solutions: Invest in technology that supports international operations, such as enterprise resource planning (ERP) systems. Ensure compliance with data protection regulations across different countries while using these systems.

• Manage compliance and quality control: Regularly review and comply with local and international regulations. Maintain high-quality standards for your products or services to build and retain trust.

Cross-border e-commerce glossary

Here’s a glossary that covers key terms in cross-border e-commerce.

A

• ATA Carnet: A document that allows a business to import goods temporarily, without paying duties and taxes.

• Ad valorem tariff: A tariff based on the value of the goods.

B

• Bill of lading (BOL): A legal document issued by a Carrier to a shipper, detailing the type, quantity, and destination of the goods being carried.
  

C

• Customs clearance: The process by which goods are inspected and approved for entry into a country by the customs authorities.

• Country of origin: The country where the goods were manufactured or produced.

D

• Duties: Taxes imposed by a government on imported or exported goods.

• Delivered Duty Paid (DDP): An Incoterm where the Seller assumes all responsibilities and costs of transporting goods until the Buyer receives them.

E

• Economic Operators Registration and Identification (EORI): A system for registering and tracking operators who are involved in customs activities within the EU.

• Export license: A government document that authorises the export of goods in specific quantities to a specific destination.

F

• Free trade agreement (FTA): A pact between two or more nations to reduce barriers to imports and exports among them via elimination or reduction of tariffs, quotas, and duties.

• Fulfillment: The process of storing, packing, and shipping merchandise to customers.

G

• Gross domestic product (GDP): The total value of all goods and services produced over a specific time period within a nation’s borders.

• Global value chain (GVC): A series of activities involved in designing, producing, and marketing a product on a global scale.

H

• Harmonized System (HS) code: An internationally standardised system of names and numbers to classify traded products.
  

I

• Incoterms: International commercial terms from the International Chamber of Commerce that define the responsibilities of buyers and sellers involved in international transactions.
  

L

• Landed cost: The total price of a product once it has been delivered, including the original price, transportation fees, customs, duties, and taxes.
  

M

• Market entry strategy: A planned method of delivering goods or services to a new target market and distributing them there.

• Multichannel retailing: The practice of selling merchandise on more than one sales channel.

P

• Payment gateway: A service that authorises and processes payments in e-commerce transactions.

• Pro forma invoice: An invoice sent to a Buyer prior to the delivery of goods, detailing the kinds and quantities of goods to be sent.

R

• Rules of origin: The criteria used to define where a product was made. These are important for implementing trade policies such as tariffs and quotas.
  

S

• Supply chain management (SCM): The management of the flow of goods and services, including all processes that transform raw materials into final products.

• Stock keeping unit (SKU): A unique identifier for each distinct product and service.

T

• Tariff: A tax imposed by a government on goods or services imported from other countries.

• Trade barrier: Any regulation or policy that restricts international trade.

V

• Value-added tax (VAT): A tax on the amount by which the value of an article has been increased at each stage of its production or distribution.
  

W

• Warehousing: The process of storing goods within a commercial building to accommodate bulk import, export, wholesale, or distribution.
  

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods and Link, a wallet built by Stripe.
  
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Learn more about how Stripe Payments can power your online and in-person payments or get started today.