Managing Risk and Supporting Growth in the E-commerce Era

Treasury and Trade Solutions 1 Profound changes in the business environment, rapid adoption of new technologies and evolving customer preferences mean that e-commerce growth is becoming a strategic objective at board level for companies across many sectors. By 2023 global e-commerce sales to consumers is expected to reach $6.5trillion and account for 22% of global retail sales. 1 While it is true that e-commerce accounts for less than a tenth of sales in most traditional sectors today, it is growing much more rapidly than other sales channels: many businesses’ future will be driven by e-commerce. Introduction Within many multinational companies, treasury finds it challenging to fully appreciate the materiality of e-commerce because of insufficient interaction and connectivity with relevant parts of the business. While treasury at many companies plays an increasingly strategic role in advising the business, this is seldom the case in relation to e-commerce, despite its fast growth. Consequently, treasury’s vital perspective is missing as companies pivot to an online world. This paper examines the rise of new e-commerce business models, explores the treasury implications of these new models, explains why it is essential that treasury collaborates more effectively with the business on e-commerce initiatives, and outlines strategies to achieve such an outcome. Lola Adebanji Director, e-commerce solutions lead for EMEA, Treasury and Trade Solutions, Citi