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This article is an extract from the Winter Edition of MER Magazine published in August 2018. You can read the full article as well as other articles from MER for free by visiting digital.mailandexpressreview.com.

Ana B. Hinojosa, Director, Compliance and Facilitation Directorate, World Customs Organization explains how its new Framework of Standards, published in June 2018 is driving the global cross-border e-commerce agenda.

E-commerce has come a long way since Michael Aldrich created online transaction processing in 1979. Today, the e-commerce landscape is dynamic, multi-faceted and rapidly evolving.

The growing trade in cross-border e-commerce has generated enormous opportunities for the global economy, providing new growth engines, developing new trade modes, driving new consumption trends and creating new jobs. This unprecedented growth has revolutionised the way businesses and consumers market, sell and purchase goods, providing wider choices and advance shipping, payment and delivery options. It has also opened up global economic opportunities to micro, small and medium-sized enterprises (MSMEs) in terms of wider access to overseas markets by lowering entry barriers and reducing costs.

Rapid diffusion of the Internet, smartphones and mobile applications has added a new dimension to this phenomenon in terms of turning e-commerce into what is now known as mobile-commerce (M-Commerce). There are approximately 3 billion Internet users worldwide, and mobile Internet penetration is forecast to reach 71% by 2019. Currently, some 4.6 billion people worldwide are estimated to possess a mobile phone, with half of them being smartphone users. There are other emerging e-commerce channels as well, such as the use of social media (S-Commerce).

Cross-border Business-to-Consumer (B2C) e-commerce is expected to reach to USD 1 trillion in 2019, with a growth rate of over 27%. At present, approximately 1.6 billion consumers make online purchases and this figure is estimated to grow to 2.2 billion consumers by 2022.

This rising ‘tsunami’ of small packages at borders is straining the facilitation and control operations of customs administrations.

Emerging dynamics

Growing e-commerce has provided unparalleled opportunities and has become a game changer in the international trade arena. It has revolutionised the way businesses and consumers are selling and buying goods, with more extensive choices and advanced shipping, payment and delivery options. At the same time, e-commerce, and particularly B2C and Consumer-to-Consumer (C2C) transactions, is presenting several challenges to governments and businesses alike.

This rising ‘tsunami’ of small packages at borders is straining the facilitation and control operations of customs administrations, as well as logistics service providers including parcel carriers and postal operators. The legal and regulatory frameworks, systems and procedures designed to support business-to-business (B2B) transactions are not able to deal with the new realities. It is well known that technology often leapfrogs ahead of existing regulatory frameworks, leaving regulators to play catch-up.

Governments and businesses need to understand the current trends in order to stay ahead of the curve. We need to look forward 15 to 20 years from now and develop more agile and future-oriented solutions to support e-commerce. Aligning the regulations, rules and procedures with the new realities presented by the digital economy and cross-border e-commerce will enhance trust and confidence of consumers and stakeholders, economies of scale, structural transformation and efficiency and productivity gains, thus benefiting producers/manufacturers, consumers, e-commerce operators, logistics operators and governments. In this rapidly changing trading environment, ‘agility’ and ‘adaptability’ of regulatory processes are the key words…

This article is an extract from the Winter Edition of MER Magazine published in August 2018. You can read the full article as well as other articles from MER for free by visiting digital.mailandexpressreview.com.