Canada Posts Sells Borderfree Ecommerce Division to FiftyOne

On March 1st, 2012, FiftyOne Global Ecommerce announced that March 1st, 2012 they had purchased the Borderfree ecommerce business unit from the Canada Post Corporation.  This acquisition comes as a surprise to many because, as a Canada Post business unit, Borderfree was part of an asset of a Crown Corporation. Not only that but it was a profitable business unit with a bright future.

Since joining Canada Post in 2002, Borderfree worked to break down the barriers of cross-border shopping between Canada and the United States. Borderfree was the first to create end-to-end ecommerce solutions for American merchants wanting to increase penetration into the Canadian online retail market.  These solutions sound simple now but it took years to perfect the integration of technology, government regulation and Canada Post logistics. Borderfree integrated Canadian pricing and delivery schedules into top US merchant websites thus allowing Canadian online shoppers to see all of the costs, including all shipping fees, in Canadian dollars at the point of checkout. This transparency, coupled with the broker-free hand-over from the United States Postal Service to Canada Post made Borderfree client companies very attractive to Canadians online shoppers. The list of clients was impressive, at one time it included such names as: Eddie Bauer, Sephora, eBags, Bare Necessities and Foot Smart.

As successful as Borderfree was, what it lacked was a presence in the US retail industry. Always an outsider, Borderfree found it difficult to break into the American online retail market.  It is this vital connection that FfityOne has in its favour.

FiftyOne Global Ecommerce is also in the business of eCmmerce and shipping, much the same as Borderfree. What they bring to the table is an impressive client list made up of the top US online retailers. Their service currently allows merchants to sell to 106 different countries in 41 different currencies. From the FiftyOne website: FiftyOne is the recognized market leader in international eCommerce and operates a technology and services platform that enables U.S. retailers with international ambition to transact with consumers in more than 90 countries worldwide.

FiftyOne CEO Michael DeSimone is up beat about what this means for Canadians:

“Canadian consumers win big. High shipping costs are the single largest factor in Canadian shopping cart abandonment. I’m pleased to tell you that this transaction is only the start of our newly expanded relationship with Canada Post. Over the coming months, we will be rolling out a new Canadian logistics platform truly optimized to the needs and wants of Canadians shopping online. Faster, cheaper, with more choices.”

With the ink still not dry on the contract, it is impossible to say what this means for Canadians. The upside to the deal is that Canadians now have a major American player who is motivated to breaking down cross-border shopping issues. The down side is that Canada Post given up Canadian control by selling the lion’s share of the business to American business interests.

Hopefully, as a result of this purchase, Canadians can look forward to seeing more transparency at the checkout of more American websites as well as easier and cheaper shipping from the US.  The short-term result is actually the opposite and Canada Post has removed all references to Borderfree from their site. Most notably, they have quietly removed the popular Borderfree shopping site (goshopping.canadapost.ca) from their web site leaving Canadians with no direct way to access Borderfree merchants.