Analysis of multiple risks and information leakage issues in cross-border e-commerce transactions

Cross-border e-commerce, as an important bridge connecting trade between different countries and regions, has developed rapidly in recent years. However, along with this prosperity, a series of potential risks and challenges have also emerged, including competition risks, exchange rate risks, uncertainty in world economic development, and information leakage.

Competitive risks

In the domestic market, as more and more traditional manufacturing and foreign trade companies transform into cross-border e-commerce, coupled with the increasing number of trade sellers, market competition in the entire industry has become extremely fierce. This not only leads to the further division of the total market share, but also makes small sellers face the dilemma of having no orders to accept, while large sellers may fall into an awkward situation of no profit.

At the same time, at the international level, the competitive pressure faced by China’s cross-border e-commerce is also increasing. Due to the rise in domestic production costs, various expenses including labor, land, raw materials, etc. continue to rise, which gradually causes the original price advantage of Chinese products to be lost. In contrast, Southeast Asian countries such as India, Thailand, Vietnam and other places are gradually becoming emerging sources of cross-border e-commerce sellers due to lower labor costs.

Exchange rate risk

Exchange rate fluctuations are one of the risks that cross-border e-commerce cannot ignore. Changes in exchange rates not only directly affect the pricing strategy of goods, but also bring uncertainty to the profit margins of enterprises. Especially at the level of small and medium-sized enterprises, they must not only cope with fierce market competition, but also bear the additional pressure brought by exchange rate changes. If they are not careful, they may be eliminated from the market.

The instability of world economic development

The unstable global economic situation also brings challenges to cross-border e-commerce. Although the U.S. economy is expected to maintain moderate growth, the Eurozone economy is recovering slowly due to various factors; growth in emerging markets and developing countries is also showing a slowdown. In addition, the rise of the “anti-globalization” trend has challenged the multilateral trading system, which is undoubtedly a major disadvantage for cross-border e-commerce, which is in the growth stage.

Information leakage

Information leakage is another major risk faced by cross-border e-commerce. On the one hand, due to insufficient network security protection measures or weak personal security awareness, important information of enterprises and individuals is easily obtained by criminals; on the other hand, attackers can illegally intercept sensitive data through eavesdropping or intruding into databases. For example, the large-scale user data leakage incident at Facebook in 2018 is a typical case.

In addition, identity forgery and information tampering are also common information security threats. Criminals often use stolen personal information to engage in fraudulent activities and harm the rights and interests of consumers. For example, many American netizens have reported that they received packages of goods they did not order. In fact, this was caused by a “fake order” operation after personal information was stolen. For another example, in B2B transactions, it often happens that hackers control corporate email addresses and send false payment accounts to buyers.

In short, facing the complex external environment and internal challenges, cross-border e-commerce companies need to continuously improve their competitiveness, strengthen risk management and information security construction to cope with the increasingly severe market environment.