Webinar June 17, 2019 | Does the UN get ecommerce?
All right. Well, you know thanks for being in attendance to the today’s webinar on does the UN get e-commerce and part of the reason that we’re having this webinar is Patrick who’s with perimeter? Went to the UN e-commerce week, which was released in early April Patrick that correct that was and I had the opportunity to go out with Patrick to the UN and be on the panel.
I’m Clint Reid. I’m the CEO of Zonos founder and we are you know here today to talk a little bit about. What was the top might not be the type of e-commerce conference that you would reach, you know, I normally think and hoping that this kind of opened some eyes for those that are really in the e-commerce world to a lot of these governments and their perspective on a lot of the difficulties in.
E-commerce and cross-border. So, if you know before we get started I just you know, I want to say that the campus when I got to the UN was it was really cool. I did walk in the wrong building and I’m sort of walking down the hall and I stopped people sitting in their these offices with their doors open.
I saw this seems super unsecured, you know that I could just. And then again, I don’t know who was all working at all these different offices, but I guess they thought I just work there too. And then I went to the correct building. I had the total opposite experience. I was run after by guards, which is always open.
Really? Okay. Yep. And so I went on the right side then yeah. Well actually, you know, it was really secure getting it once I was in you just kind of that you’re in. You know, I think I must have looked more dangerous than you for sure Patrick. You know get why don’t you quickly give us some of your backgrounds and we’ve worked together for a while known each other for a little while now and then we’d love to hear about some of the objectives that talk maybe a little bit about the panel that we had it you any calmer sweet and some of your observations and we can kind of just jump into how that went.
Yeah first thank you for having me now. I’m in a salve a dual role. So I am a member of the getting to Global initiative getting to Global is an organization that brings together resources from the public and private sectors to help companies export and we were born primarily as a let’s say a think tank to think of new ways.
Companies can use e-commerce more specifically to start selling abroad and start selling overseas. In fact, our Moto originally would sell more online overseas. I’m the head of Perimeter, which is the product development Studio that is now working hand-in-hand with getting to level to bring to the market products that will help companies export.
So we are the creators of the getting to Global export accelerator and now we are launching tomorrow the getting to Global exports Marketplace and. We were invited by the United Nations conference on trade and development instead to basically host a panel and early April during instead e-commerce week and as you’ve mentioned this is not the type of e-commerce conference.
We were expecting obviously we’ve been to a lot of e-commerce conference and when we appeared very clear a few weeks before we got there that this was very much geared towards legislator and regulators. More so than targeting CEOs Saudi e-commerce week and general is a forum to bring together people from governments Ministries trade organizations trade promotion organizations foreign direct investment.
Organizations and bring them together to discuss the potential of e-commerce for trade for fostering trade and international Commerce, but also to empower emerging economies of loving countries and bring them into the sort of now digital global economy if you will so our panel was discussing them.
The potential of e-commerce primarily in the context of trade promotion. So in the context of getting companies to export their goods and initially that’s why obviously we brought Adolfo Fernandez from Google on board to talk to us about the great had the larger Trends in the digital economy. We also obviously brought the invited you Clint to join us on stage to discuss very specific challenges technical challenges that companies are.
Racing when when making sales online and then to bring the perspective of developing countries, we brought we invited and Chiapas from the International Trade Center to really and she is the person responsible for helping trade promotion organizations in developing countries build their capabilities, especially around e-commerce, and I think it’s going to be worth discussing how much e-commerce is interesting for developing.
And this isn’t the itcz it was interesting. She had mentioned that 50% of its own by the WTO. And then the other 50% is owned by Moonstone and the same exact answer to try to keep his neutrally is that was most kind of balance out I guess. You’re right. Absolutely. So once that is really they’re like the D the development aspect of wounds that isn’t as much more important than the trade.
They’re really there to help emerging economies through trade. Whereas the WTO the World Trade Organization is very much a Mercantile organization if you will, so they’re walking this very very thin line right really fine line. And so that they’re really at the. At the line between real development and pure trade so they have a really interesting approach.
I would say yeah, absolutely Odin and was amazing. So and was really well-versed on the developing nations and all of it was that it was very insightful. Yeah, and she brought a whole different. I was a perspective because you know where there were two technologists discussing how technology can do this technology can do that how we can streamline this and then she just you know razor fingers.
Say what? Half the population does not even have internet access. They don’t have access to email they well. Yes, they pay with mobile phones, but they’re using mobile phones that don’t even you know offer the ability to see a website. So what’s your solution and so it’s a really a sobering she brings the sun sort of covering perspective to everything.
But you also had a great a few great insights to share with the crowd over there. No, I agree. I think a lot of the crop to relate a lot of what she was talking about. So. To the crowd a little bit there because it was very, you know, bureaucrat that what TPO right you’re going to use that term you have.
Can you just dive into a little bit of what is a trade for more promotion organization? And what are their roles for? For the in these countries. Well the role of a TPO first and foremost if you oversimplify everything is to help companies in the country export to other countries and to do so profitably and safely and their role.
It really is to help on paper any companies sell more of their goods their production overseas, whether its products or even services that being said typically a trade promotion organization in debt and a developed country will focus. A lot on the larger deals. So I think we discussed that earlier.
You know, when a TPO can invest its time signing 150 million dollar deals or you know, or the or to focus on closing ten thousand five dollar deal a five thousand dollar deal. For them, the math is really easy. They’re always going to go with the big deal with the deals and the transactions that moved at the economic impact need a lot more.
So that’s what you see in developed countries and then in developing countries, you’ll see them being more on the a, you know, they’re not really trying to export anything. They’re trying to. Money from the UN from the WTO from the oecd. They’re trying to get funding to then build the capabilities in the country to increase productivity improve production to eventually 5 years 10 years 15 years in the future really, you know work on exporting more than their local Productions of fruits or minerals or things like that so that and that’s it.
And that’s the challenge of yours right at getting the global is educating. TPO is around more than just. what almost seems easier to focus on it just a massive deal for you know, one or two organizations that have limited number of SKUs that are they’re exporting versus focusing on the thousands of online retailers that are trying to export.
It sounds like that’s definitely got to be a challenge for getting global. It is a challenge. It is a challenge primarily for about for all T peels really because T POS are measured on they have conflicting objectives. So the first objectives are economic impact where the big larger transactions will always win but are also.
Measured their impact is measured on the number of companies. They’ll help. So when this in one case the more companies you have that you will not find 50 million dollar deals all the time. Right? So when they have to focus well, obviously one is easier in terms of efforts and the cost-benefit of a large transaction makes sense, but then they’re being incentivized for completely something completely different and usually mutually exclusive.
So a lot of our Focus has to be on. How we can bring some level of Automation and of self-service and their transactions within this case for example and US businesses. So it’s always a challenge. We always have to walk them through how technology can help them serve more us businesses serve them faster double the output without doubling the size of their team.
So yeah, it’s always an uphill battle. I would say because they’re just being incentivized for ultimately the wrong things and there. And I think this brings us to an interesting topic is their most TPO S&D us Europe Canada there I’d say they were more technically Savvy but still for them e-commerce is completely alien half of the time so you’re always fighting this fight against.
You know difficult or mutually exclusive objectives and then just this lack of general knowledge on e-commerce and it’s more practical aspects like duties and taxes shipping in that. I think I think that was one of the big challenges are surprises for me when I went is I definitely knew the audience was very was government oriented and there be the TPS but also the those that are.
And you know with it with the WTO or you know, I let me I guess to give an example of one of you know the type of attendees that I ran into we I was going through security on the second day. This is the day that we did our session and I had I ran into right and security a lady that had been on a panel of the day before and that panel the entire, you know, well first, you know the WTO was represented on that panel.
And the WTO talks a lot about trying to improve streamline the whole HS coding and classification process because that is definitely a barrier to selling internationally. And then that that but the biggest point of the conversation was all about consumer protection, you know. I where’s the state of being held and it just to me to shove it like GDP are all over again for e-commerce and I brought this up to the to the lady once I had the opportunity.
I said look, I want a watch your panel yesterday. And is that really all of your constituents or the the the consumers in your country are looking for is are they really you know is privacy their number one concern because we work with. Hundreds of online retailers and get feedback from thousands and thousands of customers and they’re worried that the process is so untrustworthy when you buy cross-border that you nothing is transparent, right?
Everything is confusing. They don’t think if they’re getting him to duties and taxes when it arrives and I’m educating her like these I feel like I am, you know educating her on the perspective of the online retailers. That that we deal with in their customers and what they’re saying, which just tells me like the basics like, you know, yes, I think they’re worried about privacy everybody is but I was a little bit worried that that was a very major focus of so many of them.
Representatives there at the UN you are absolutely right. And you know, this is the same. This is the same kind of conversation. I’m having all the time and to my point I the point I make usually or the in my opinion to matter and that’s what research has demonstrated that. You’re for a consumer.
They’re not really focused as much obviously they need you to need to hit some level of data privacy protection that you should always strive through to achieve. But what they’re really concerned on is with is Simplicity transparency and overnight shipping if they can get something overnight, you know what they’ll like I said, they’ll send you their DNA sequencing if that’s what they need to do, but and I think that raises an interesting point is in their approach at most of the people.
Where there were some people from the private sector, I think we were some of the representatives would say maybe 10% from the private sector, but everybody that was there was either from a government from the UN from the WTO from the world’s cost the world Customs organization and. Enter them everything always came down to regulations either more or less of and it made every single conversation about regulation.
That’s something I deal with on a daily basis when I’m talking to T POS, but you know, they’re always asking us, you know, should there be more should there be less and in my opinion there are. It should just be stable and leave the regulation as is provide us with a good Bedrock of strong Fair secure guidelines and then let us through technology work our magic and will make sense of it will figure out a way to make that more user-friendly more transparent more useful and more streamlined.
But really the last thing I believe we need in this contact is. Is more regular or not silly more regulation, but more talks of regulations. We know what’s not working. Well, let’s we all agree and I think the. The Next Step I think in 2021, they’re coming up with a refreshed harmonized schedule Code system.
That’s one example where we can make a lot of difference and I don’t think focusing so much on privacy now that we have GDP are in place and already strong guidelines. We can focus on something else. I think that’s exactly like, you know, you don’t need to create another gvr GTRs out there friend.
If they do, you know, keep going down the route of addition, right, you know more regulations with cross-border because across borders is different. I mean, how does that affect these developing nations that are just trying to start gett getting pissed trying to get there, you know. Feet under him to start doing cross-border.
I mean, we especially the United States we have the chance to really live the wild west era of e-commerce where you know don’t didn’t really have to charge any sales taxes. You could ship anywhere and you would obviously pay some place some fees but where it was fairly simple now if you’re just starting out as a country in e-commerce, you’ll find that there is a large body of Law and regulation.
That really gets sun in some cases gets in your way. Not because you know philosophically I think it’s fine. It’s just from a logistical and from a complexity standpoint. You’re forcing the need for a or you’re creating a huge learning curve for people that sometimes don’t have access to the kind of education that we have here.
So it’s creating a would say two-tiered access to e-commerce 140 developed. Trees and one for developing countries that because of this complexity always end up on large marketplaces and are not really don’t have the opportunity to build their own online presence which you know sort of prevents them from communicating an interesting brand mess of stronger brand messaging and things like that.
So there it’s a whole missed opportunity in mine. All right. Let me just make sure I’m chairing the right screen. Am I sharing my notes or the which I think you’re showing your notes? Yeah, I don’t think we’re more interesting than the current slide. Anyway, that’s an easy fix. All right. I’m well like this is much of this is way less interesting my notes.
Can you see this? Females. Yeah, we can see United Nations building in Geneva, by the way, beautiful building beautiful compound. The city itself is amazing. And once you get over the fact that I don’t think you can eat under $50. It’s a fun city to be and really yeah. Yeah. It was what you know, I got to go visit one of our customers out there and it was that is actually in Geneva, which was unexpected.
Acted on that, you know because the majority of the retail teamwork with their in the US, but I’ll tell you their biggest concern which also was in talks a lot about the conference was Brexit and they were so concerned about how Brexit was going to affect their e-commerce business that was shipping from Switzerland into the UK and.
That was a huge pain point for them. Was that uncertainty, right? Like I said like to thank you. I mean you just said which is so important is that stabilization is what’s really needed people just want their expectation set and know what they keep it as simple as possible and breaks. It’s just a bunch of uncertainty right now for all retailers and.
I know and I think yeah, I think it really slows down adoption of even e-commerce in certain European countries. But this raises the point egg uncertainty is one thing the unknowns are also one big factor that prevents businesses from Auntie peels really from embracing e-commerce as much as they could.
You know, we were sitting and the room and we were talking. I think it’s it was you clean that covered more some of the more practical of the problems that you can face in your eCommerce Endeavor and then Commerce Journey. And I think that a lot of people in the room were just I never heard of having to pay duties and taxes, you know when you get a package delivered to you never really there are so many things that they did not know they did not know that.
I think creating or creating or removing this fear of the Unknown by telling them at least about some of the basics really went a long way in. Making them understand the value of e-commerce for their clients. Yeah. I know. I think you know, I hope I hope you’re right. You know my observation was once.
I bit. You know II had prepped kind of just I made some assumptions that I probably shouldn’t assume one is that they knew wouldn’t be Commerce platform was or did they do we want Shopify was or Magento and I would say the majority of people now honest probably did not and that was surprising but I’m like, okay.
Yeah. This isn’t a technology, you know focused. Conference necessarily but a part-demon eCommerce, but the part of the blew my mind was what you just said. I don’t think actually fully understood the process for low-value good to getting shipped cross-border and that how that process affects the consumer how it affects the business right?
It’s getting hit with chargebacks because the person won’t pay for the duties and taxes. It’s clearing customs and. And so yeah, it was definitely a where I thought I was going to kind of be able to focus a lot more on. How do you solve this problem so much of it was just focusing on education around what is the problem and?
So that was by far. I think the most surprising thing for me about the attendees was the lack of understanding of how different low-value eCommerce cross border is then high-value cross-border e-commerce. I completely agree. I’m this is you know, I’ve been more involved in let’s say a global trade technology for three years four years now and that is the thing that amazed me.
Most well, it still amazes me every day. I’ll sit down with the TPO and nowhere in their thinking is there mention or even an ocean of e-commerce and small transactions? They are still very much in the mindset of moving millions of dollars worth of goods. Through you know sea lanes and the mindset and very much in the business to a business setting and they’re not thinking about the potential for smaller transactions things that fly under the de minimis and I can really be a really effective first contact with International sales for the company.
I mean do most of them know it the minimum of the de minimis is what de minimis is. I would say I don’t want to offend anyone here because I’m working out. I’ll say it’s 50/50. Okay, how does it 20% do so you’re pretty generous as good, you know and. and then you know there that you know, there’s so much talk about, you know, then they do want to simplifies the harmonization system.
When a lot of countries have already I think I’ve come up with. You know some things to streamline the consumer side of cross-border and not everybody knows right that you know if India when it is a low-value good attack that calculations can actually turn out to be pretty simple. Once it goes over certain value gets more complicated.
And that’s that’s even without having a low de minimis value. So I think there’s kind of those two stages that can be looked at to streamline. The cross-border e-commerce one is de minimis value has the most by far the biggest impact because if you can just clear Customs without getting having to figure out what the duties and taxes are but the second is.
Having fun of a centralized system that applies a simplified Duty rate and I do think there’s four just e-commerce. I think there are opportunities for countries to look more closely at that. But we do see that and I and with countries like Australia coming out with their low-value GST law that’s been now in place for.
Almost a year and I think more laws like that are going to happen where the onus is going to be turning more to the retailer to pay the duties and taxes. The exporter versus are the taxes in this case with Australia versus the Importer. So I think what you know over the next year. Yeah. I assume you’re going to be heading back probably next year to the e-commerce week again.
And getting the Global’s going to continue to try to educate as much as possible the T POS and these. These type of people about these challenges. I’m correct. That is correct. I mean, we’ll always be happy to join any Forum where people are willing to discuss simplifying trade and making sure that more companies Go Global every day.
I mean, this is our mission and that’s what we’ll continue doing both with both by educating companies and inspiring companies by showing them that it can be easy to go Global but also by educating and working and building tools for trade promotion. Okay, great. So if anybody has any questions for Patrick or myself.
You know, maybe maybe I missed some questions that were in the note so you could have already seen maybe those were answered and then but my email is Clinton’s almost.com. There’s Patrick’s email right there as well and you know, feel free to reach out. We’re happy to. You know give any additional insights on some of our thoughts about the UN e-commerce week or how these some of these conversations might affect you as an online retailer if you’re going to go global.
Well Patrick, thank you for taking the time today. I think that was extremely insightful. And again, thanks for the invite and going to I think you did a well I’d I told everybody. At Joe knows about the conference and a lot of other people in the industry and just said you did a great job on the moderation on that panel and a lot better job than I did today.
So he’s kind of thing flips use a little bit. But yeah, I appreciate you coming on my pleasure Clint and it’s been a pleasure to have you in Geneva with me. All right, okay. Thanks, Patrick. Talk to you soon.