Overcoming Logistics Challenges for International Expansion
Richard Hong, founder of Pangaea Holdings, a leading e-commerce brand specializing in men’s personal care products, had an easy time gaining international customers. However, he soon realized that getting the merchandise to them was a different story altogether.
"We found that logistics pack compliance, product compliance, and marketing had no localization technology," Hong told TechCrunch. "We had to build a lot of those capabilities in-house to be able to scale."
Hong’s e-commerce company, Pangaea Holdings, eventually scaled to the point where a majority of revenue – well into nine figures – was coming from outside of the United States. This experience sparked an idea in Hong and his co-founder Darwish Gani to help other e-commerce businesses expand internationally without facing similar obstacles.
The Birth of OpenBorder
In March 2023, Hong and Gani spun off the technology business into a separate entity called OpenBorder, which raised $10 million in seed funding. At the time, the company had five merchants on board, but it has since grown to nearly 70 merchants in just a year’s time.
OpenBorder’s cross-border trade concept is centered around providing e-commerce merchants with instant access to international customers through the automation of certain logistical needs. These include shipping, trade, tax and duty compliance, product localization, and international marketplace listings – all from one software platform.
Merchants using OpenBorder can also sell on Amazon and regional marketplaces with a two-day, Prime-like experience, Hong explained. This level of convenience is crucial in the e-commerce industry, where speed and reliability are paramount.
The $2 Trillion Cross-Border Market
The cross-border market presents a staggering $2 trillion opportunity, which OpenBorder is well-positioned to capitalize on. Other companies, such as Nocnoci and Keeta, are also working to address this need by providing merchants with easier access to international customers.
OpenBorder’s board includes prominent investors like Peak XV Partners (formerly Sequoia Capital Southeast Asia), Capital 49, and Harlem Capital. Eurazeo, a leading consumer merchant investor, has also joined the board, bringing its vast experience in the consumer segment.
Growing International Revenue
Many OpenBorder merchants start by generating 4% of their revenue from international sales but eventually grow to 15% or even 20%. Pangaea Holdings was able to reach over 50% of its revenue coming from non-U.S. customers, and OpenBorder aims to help other merchants achieve similar results in just a few years.
"With us doing it, that tells us there is truly a potential for other merchants to get there," Hong said. "But the question is, ‘What does it take to get there?’ We have the obvious answer to that question and want to help every merchant access every consumer around the world."
The Future of Cross-Border Trade
OpenBorder’s mission to simplify cross-border trade has the potential to revolutionize the e-commerce industry. By providing merchants with a single platform for managing international logistics, OpenBorder is making it easier for businesses to expand globally.
As Hong noted, "We should all be paying more attention to the PDD-Alibaba rivalry," highlighting the growing importance of cross-border trade in today’s global economy.
Conclusion
OpenBorder’s innovative approach to cross-border trade has already gained significant traction, with nearly 70 merchants on board and processing volumes increasing by 10 times. With a strong board of investors and a clear mission to simplify international expansion, OpenBorder is well-positioned to capitalize on the $2 trillion cross-border market.
As Hong and his team continue to develop their platform, they aim to help other e-commerce businesses achieve similar results in just a few years. By providing merchants with instant access to international customers through automation of logistical needs, OpenBorder is making it easier for businesses to expand globally and tap into the vast opportunities presented by cross-border trade.
Key Takeaways
- OpenBorder’s innovative approach to cross-border trade has gained significant traction.
- The company provides e-commerce merchants with a single platform for managing international logistics.
- OpenBorder aims to help other e-commerce businesses achieve similar results in just a few years.
- The $2 trillion cross-border market presents a vast opportunity for OpenBorder and other companies working in this space.
