How Should Brands Think About Cross-Border E-Commerce Amidst Uncertainty?

Yahoo

2 days ago

Cross-border e-commerce is likely to face heavy impacts from the changing global trade landscape, particularly as U.S. President Donald Trump's tariff strategy remains in flux.
Data from FlavorCloud, which helps optimize cross-border shipping and returns, shows that apparel's cross-border conversion rates dropped by 5 percentage points—from 13 percent in February to 8 percent in March, when Trump started introducing, and in some cases soft-launching, what would end up being, in some cases, double or triple-digit duty rates.
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Right now, the tariffs Trump set forth on 'Liberation Day' are on pause for most countries. Rathna Sharad, CEO and founder of FlavorCloud, said she anticipates that, once that pause is up—barring any further court intervention for overreaching, that is—Trump will introduce lower tariff rates on most countries.
'At the end of 90 days, I expect [rates] to be something more reasonable. We may have seen the worst of [it]. The 145 [percent tariff on China] was enormous, and it has impacted pretty much every single brand in a lot of ways,' Sharad said.
Nonetheless, she advised that companies hoping to continue building out their cross-border business stop to consider their sourcing patterns, as so many companies have been since Trump began his second term. If prices on goods increase because of country of origin, and sending goods internationally is already more expensive, that could see companies passing a higher portion of the cost on to their international customers.
Sharad said the smartest companies had already started building out a multi-sourcing strategy.
'It's not easy to implement alternative sourcing within a month or two. It takes a while to do that, but what is really important is that those that have made inroads [by] already thinking about multiple suppliers—or that were considering alternative sourcing options before—were able to make that switch relatively easily,' Sharad said.
Fashion and apparel, as a category, has already been struggling when it comes to growth for cross-border e-commerce; FlavorCloud's data shows that, while other categories—like beauty, health and wellness, have seen rapid growth between 2024 and 2025, apparel and fashion has seen a 3.3 percent decrease. That pales in comparison to health and wellness' 201.2 percent increase and beauty's 46.6 percent uptick.
Sharad said that slump could be attributable to two main factors: longevity in the cross-border market and price fluctuation.
'[Apparel] has grown over the years pretty significantly, whereas these other categories are still brand new for cross border, so they're emerging,' she said, noting that apparel has also seen 'more significant price point and margin issues' than other sectors growing rapidly.
For apparel companies, Asia, Africa and Latin America could be opportunity zones for further sales; in each region, apparel ranked the number one cross-border category in 2024. The report suggests that, while apparel is a top category in many markets, its stronghold varies by location based on pricing and delivery, which FlavorCloud contends should vary by region.
Sharad said the company helps its clients determine those exact considerations, which she expects will only become more important as final—or semi-final—tariff rates come from world leaders.
For apparel in particular, getting the mix right on products could help foster loyalty, which seems to be top of mind for many brands and retailers amidst uncertain economic times. Sharad said that, like domestic customers, international customers expect fast delivery, free or low-cost shipping and easy returns to stay truly connected to a specific brand. To be able to deliver on those considerations is likely to help retention rates, she said.
'They're coming back because they love the products, because they're not getting those products locally,' Sharad said.
As she thinks about what's coming down the pike, she said unreliability continues to loom—so diversifying sourcing strategies would be a wise move to help make pricing most palatable for customers, and for brands themselves.
'Moving to multiple sourcing partners is an important thing for brands to invest in in the long term, because you don't know when the tariff implication is going to hit you. The one thing we know for sure is that the U.S. is front and center, and tariffs are the household name right now, simply because of the pace with which the changes came and…the magnitude of it,' Sharad said.