It’s predicted that, by 2012, the US will only represent 14% of all online users, and increasing adoption of online purchasing around the world makes international expansion increasingly attractive for ecommerce businesses looking to grow.
But going global doesn’t mean guaranteed success. If you’re considering international expansion, whether it’s tackling the whole globe or just one other country, there are a number of things to think about.
I might be wearing a Captain Obvious name tag, but research is essential. You can’t just rely on market size, Internet usage and dollars spent online. The majority of ecommerce around the world is tickets – for travel and entertainment – so it’s important to understand the new market’s demand for the products you sell, not for ecommerce in aggregate. Understanding the potential cultural issues, like perception of your products, is also important. For example, what passes for acceptable dress in the West may not be embraced by more conservative cultures.
Investigate attitudes and expectations around pricing and shipping. For example, some countries expect to see prices inclusive of shipping charges, not shipping charges added in the cart. Overstock learned this of the UK market after receiving complaints. Knowing what international customers are willing to pay for shipping is also important, is the threshold in the range you can afford?
You’ll also need to do competitive research, both for competitors in your “home” country that have forayed into the new market, and the new market’s domestic players. Consider the strength of the domestic brands – will your brand be recognized? Is there a domestic brand you could acquire? Have your home country competitors successfully built awareness? Are they mentioned in social media? Do their localized sites attract customer reviews?
Your own web analytics can provide some insight on traffic from different countries and site behavior, but it can’t tell you about customer experience, attitudes and preferences. Market surveys, customer surveys, Forrester Reports, Compete.com data and consultancies that specialize in global expansion like JC Williams Group can
help fill in the blanks.
Again, Captain Obvious on deck, but regulatory issues exist and legal counsel is a must. Make sure you cover sales tax collection and disclosure, pricing, merchant account, payment collection, security and privacy regulations. For example, it’s common practice in North America to pre-check email subscription boxes (though I don’t recommend it), but it’s illegal in the EU – a violation of user consent.
Logistics is key – how will you fulfill your product? Do you drop ship and do you need to source out local vendors? Can you fulfill locally from landed warehouses or retail stores? Would partnering with a company like E4X / Fifty One, which specializes in cross-border logistics be the best for your company?
Will your global teams be centralized, located abroad or a combination of both? If both, which decisions will be made centrally and which locally? Do you have existing human resources or will you need to hire? Consider the nuances around customer service staff (language, time zone), site copy translation, marketing / messaging, search marketing, etc. Will you need to partner with local usability firms, SEOs, copywriters and email marketers?
Does your existing platform support international expansion? Can you add multiple stores using your current license? Can the platform handle foreign character sets, multiple currencies, date formats, checkout fields (postal code format, VAT etc), new payment methods or single sign-on for customers who wish to shop both your .com and local sites? It might be time to replatform. How long will that take?
What 3rd party technologies like geolocation and content delivery networks are required to deliver tip-top user experience?
If you’ve been counting, you’ll notice that’s only 5 points. I promised 6.
The sixth consideration comes when you’re confident international expansion is right for you. You must decide whether to serve the world from one site, or create separate sites for local markets, is the best approach. This deserved it’s own post, you can read about it here: Global Ecommerce: One Store or Multiple Stores?
While you're in suspense, sign up for our next webinar with Zia Daniell Wigder of Forrester ResearchTapping into the International Online Consumer: What Every Enterprise Needs to Know About Going Global.
Key webinar takeaways:
* Market Prioritization - Determine which international markets you need to be in and the ROI of upside revenue versus the costs from the added complexity. What hurdles to success exist in some of the key ecommerce markets of Europe, Asia, and Latin America?
* Scalability - How can you prepare and organize your global business to efficiently manage and operate across multiple markets?
* Customer Experience - How do you optimize the online experience for markets where high speed internet, next day delivery, and customer service levels vary?
* Payment Types - Not every online user has a Visa card. Germany, China, Japan, Brazil and many other large international markets transact online in ways that we may never have thought.
It's happening Wednesday, October 27 at 9am PST / 12pm EST. Reserve your spot today.