Facilitating global footwear business growth with DNBC’s cross border payment solutions

The global footwear industry is dynamic and competitive. These companies must keep finding new ways to stand out. Mastering cross border payment solutions is a key factor for footwear companies looking to expand globally.

As the footwear industry grows, efficient payment solutions are crucial. DNBC’s cross-border payment solutions provide network international payment solutions for streamlining financial transactions.

In this article, we will delve into the trends and future of global footwear trading. Also, we will discuss the challenges and chances of these global manufacturers and traders in cross- border payment and how to overcome these.

Major trends and future of global footwear trading, especially in the EU

The global footwear industry is marking a great shift. Indeed, the EU market stands at the forefront of several key trends. They are reshaping the way footwear is produced, distributed, and consumed.

Basically, the European footwear market size was valued at over US$235.4 billion in 2020 (source: Transparency Market Research). It’s expected to reach 8.5% from 2021 to 2031.

Similarly, according to a 2023 study by Research and Markets, the global smart footwear market is projected to reach USD 98.4 billion by 2027. This forecast highlights the increasing focus on innovative footwear in the market.

Here’s a look at these trends and how they might affect the future of footwear trading in the EU:

1. Prioritizing sustainability:

EU consumers are prioritizing sustainability. This drives demand for footwear made from recycled materials, manufactured with minimal environmental impact, and produced under fair labor conditions.

A 2023 McKinsey & Company report indicates that 70% of European consumers are willing to pay a premium for sustainable products. This shift in consumer behavior creates a massive opportunity for footwear brands prioritizing eco-friendly practices.

2. E-commerce boom:

Online platforms provide convenient shopping and a wider product selection, driving the e-commerce boom for footwear in the EU.

Europe’s online footwear market is poised to surge to €84.5 billion by 2025, according to Statista. This rapid growth highlights the importance of a strong online presence for footwear brands.

Moreover, a report by Digital Commerce 360 shows that D2C sales in Europe are expected to grow by 18.7% annually, showcasing the potential of bypassing traditional retailers.

Direct-to-consumer (D2C) brands bypass traditional retailers to offer competitive pricing and a more personalized experience, attracting EU consumers. D2C brands are disrupting the traditional retail landscape.

3. Personalization and customization:

Consumers are seeking footwear that reflects their individuality. This trend opens doors for customization options, on-demand production, and products catering to specific needs.

Additionally, advancements in 3D printing and digital design tools enable personalized footwear, catering to unique foot shapes, desired styles, and performance needs.

4. Technological innovation:

Technological advancements are leading to the development of new materials with improved performance, comfort, and durability.

For example, integration of technology like sensors and connectivity into footwear is opening possibilities for data-driven training, injury prevention, and personalized experiences.

What are the challenges and opportunities of these global manufacturers and traders in cross- border payment?

Challenges:

Currency fluctuations: The Eurozone uses the Euro, but some EU countries still have their own currencies. Fluctuations between the Euro and other currencies can greatly impact profit margins.

Currency fluctuations can greatly impact trade, with the IMF (2021) estimating a 1% swing leading to a trade volume variation of 0.5% to 1%.

Transaction fees: Traditional bank transfers can incur high fees, impacting profits. These fees can be a fixed amount of the transfer value, and can vary depending on the sending and receiving banks involved.

In 2020, the World Bank reported that the global average cost of sending about 10% of remittance, with corridors exceeding 20%.

Lengthy transfer times: Traditional bank transfers can take several days to complete, delaying payments to suppliers and impacting cash flow management. Delays in receiving payments can disrupt production schedules and strain relationships with suppliers.

A 2022 survey by the European Payment Council revealed that cross-border payments within the Single Euro Payments Area (SEPA) can take up to one business day, whereas transfers outside SEPA may take even longer.

Complex regulations: EU regulations regarding money laundering and foreign exchange controls can be complex and lengthy to navigate. Breaking these rules can lead to penalties and slowdowns.

Hidden costs: Unexpected fees like beneficiary charges and intermediary bank fees can further erode the transferred amount. These hidden fees can significantly impact profitability, as they are often not factored into initial calculations.

Digging deeper, a 2021 World Bank report estimates hidden fees add an extra 2-4% to the total cost of cross-border payments.

Opportunities:

Hedge against currency fluctuations: Financial instruments like currency forwards or options can help manage exchange rate risks. These instruments allow companies to lock in an exchange rate at a specific point in time, mitigating the impact of fluctuations.

Compare and negotiate fees: Researching and comparing different payment providers can help find the most favorable rates and fees.

Indeed, several online platforms compare different providers and can help identify the most cost-effective option for a specific transaction. A study by Coalition Greenwich in 2022 found companies that compare providers can potentially save up to 30% on cross-border payment fees.

Explore alternative payment methods: Faster and potentially cheaper options like international wire transfers or specialized payment service providers might be beneficial. These services often offer faster processing times and potentially lower fees compared to traditional bank transfers.

Partner with a financial service provider: Collaborating with a company experienced in international money transfers can streamline payments and provide guidance. These providers can handle the complexities of regulations and currency conversions, saving manufacturers and traders valuable time and resources.

A 2023 report by Accenture estimates that FinTech solutions can potentially reduce cross-border payment processing costs by up to 70%.

How can DNBC services boost their business development in the global market, especially in the EU?

Expanding into the global market, especially the EU, can be challenging. DNBC is one of the most suitable cross border payment solutions that can help businesses navigate these obstacles and achieve success.

Smooth cross border payment solutions are vital in the EU market, where transaction speed is crucial. DNBC ensures smooth transfers, and avoids costly delays with global payment accounts.

Multiple payment options

Understanding diverse customer preferences in the EU is key. DNBC offers a variety of payment methods (Business Account, Personal Account and Prepaid Card), allowing businesses to cater to different payment habits and enhance the overall customer experience.

Clear pricing and transparency

Transparency builds trust in any global payment company. DNBC provides clear and upfront pricing for all services, enabling businesses to manage their financial operations effectively and build strong relationships with customers.

Customized financial solutions and 1-on-1 support

DNBC’s cross border payment solutions go beyond generic services. They offer personalized financial advice and solutions tailored to the specific needs of each distributor. This ensures businesses receive focused support and optimize their financial strategies for success in the EU market.

DNBC provides 24/7 support and personalized assistance. This dedicated support ensures smooth operations for businesses entering the EU market. Any unforeseen issues can be addressed promptly, minimizing disruptions and maintaining business continuity.

Enhanced security and regulatory Compliance

Robust security measures are essential for any business. DNBC implements advanced cybersecurity tools to protect transactions and sensitive business information, minimizing risks and ensuring peace of mind.

Eventually, it’s challenging to navigate the ever-evolving world of financial regulations. DNBC stays updated on all global financial regulations, particularly those pertaining to the EU. This ensures businesses operate compliantly, avoiding potential penalties and delays.

Related Articles:

• Cross-Border Business: Opportunities and Challenges in the Global Marketplace
• How a Business Account International Payments Streamlines Your Operations
• Unlocking global chances: international payment solutions within European businesses