With the search for global revenue growth extending to remote markets with often challenging infrastructures and service requirements, could it be that your e-commerce strategy is hindering your ability to capture your share of online revenue in your more mature markets? In a recent Euromonitor report on e-commerce market opportunities it is clear that the online share of retail spend continues to increase, but to capture those dollars you need to be able to serve customers across multiple markets.1
This growth is forecast to continue with online sales expected to account for 5.7% of Western European retail sales by 2016, and up to 10% of retail sales in the UK.
Serving a dominant home market is certainly a good first step in capturing the e-commerce opportunity, but the Euromonitor data indicates reluctance for shoppers to make cross-border purchases. While 36% of European citizens have made Internet purchases, only 9% have made what they consider to be cross-border purchases online.
Challenges range from language and cultural expectations, to perceived ease of returns processes, excessive shipping costs, managing duties, payment security and financial process. How many of you have seen global e-commerce sites that tout global reach, but shipping costs end up exceeding the product value and lead times extend to weeks? Just because you can ship to a market does not mean that you have enabled consumers to buy.
While I recognize that aggregate market data will break down very differently for specific products, take a minute to score your own company’s e-commerce market coverage in many of the mature markets that you serve:
• Are you guilty of underserving the online market opportunity in key markets?
• How many of even the top 7 country markets can you claim to properly serve with a localized e-commerce solution?
• How much could that be worth to your company to solve?
The trouble is that those difficulties experienced by the consumer with cross-border commerce become the same challenges brands must overcome if they want to effectively serve these markets. You need an infrastructure capable of dealing with local payment types, and in local languages, supported from a fulfilment and returns network that meets lead time and cost expectations. (Learn more in our white paper on the globalization of e-Commerce). For the brand, the choice is whether or not to commit to serving these markets and then making the business case to invest in capturing this market share. For the consumer, there is also choice and that is to move their dollars or euros or yen to the brand that best serves their needs.
Share with us your thoughts and experiences in this area.1. Euromonitor International, “Passport: European Digital Divide: E-Commerce Markets in Europe – Opportunities and Prospects,” November 2011.