The continued eCommerce shift has merchants — especially larger ones — pivoting to sell their products directly to consumers (D2C).
In that model, they’re eschewing third-party wholesalers or relying on local merchants to make inroads into new markets and new countries.
Levi’s has been accelerating its D2C activity — and eventually may see D2C account for half of its top line. Elsewhere, payments gateway Citcon is integrating its unified payments application programming interface (API) into Bold Commerce’s headless checkout experience. That combined solution will enable retailers and D2C brands to accept and process more than 150 payment methods.
In further evidence wind at its back, as shown by Israel-based Global-e Online’s latest earnings results released Tuesday (Aug. 16) show that larger merchants are finding value in partnerships and platforms to help satisfy the nuances and demands of being “local” on a market-by-market basis.
The headline numbers show that gross merchandise volumes surged 64% year over year to $534 million in the period.
And drilling down a bit into the ways in which cross-border commerce is moving to embrace the platforms on offer from firms like Global-e Online, we note that fulfillment services revenue growth strongly outpaced service fees. Fulfillment revenues grew by 63% to $47.9 million, accounting for 55% of total sales.
Management noted on the conference call that there had been an accelerated growth of the U.S.-outbound business, with revenues from that corridor up 104% year-over-year. CFO Ofer Koren noted on the call, too, that within Europe, though there had been weaker eCommerce demand in March and April due to the war in Ukraine, there had been a “significant recovery.” Demand rose in May and June and still is strong. More merchants, he said, have been embracing the shift to digital channels in a bid to reach consumers.
And during the call, CEO Amir Schlachet said that there still remains a “massive opportunity” for D2C commerce, particularly in regions such as APAC and the Middle East, where outbound GMV volumes soared by more than 215%. Drilling down into certain verticals, commentary on the call pointed out that there has been a “slight decrease” in sporting goods and sportswear sales as people are returning to work and to office environments.
D2C, management said on the call, is gaining a share of transactions, and larger merchants are pivoting to expand their own D2C offerings. In just one example, the firm is working with Disney in the APAC region to support the entertainment giant’s online merchandise operations there. In addition, the company also booked its first live orders as part of the alpha trials of the new white-label Merchant of Record solution on Shopify.
Merchants, said management on the Global-e call, are demanding advanced localization services from providers as they move into new markets. Earlier this year, Global-e said it had entered into an agreement with Pitney Bowes to acquire the global shipping and mailing company’s Borderfree cross-border eCommerce solutions business. That acquisition, and organic growth, have helped the firm guide to 72% GMV growth as the midpoint of its expected range for the current year. Looking ahead, Schlachet noted that there might be opportunities to acquire other firms as it builds out services, particularly tactical buyouts of smaller providers that, amid macro headwinds, are running out of cash.