What is Your International Expansion Strategy for e-Commerce?
There is no doubt in my mind that the Internet has made the world a little smaller. It has also created a lot of opportunity for businesses to expand globally. Internet Retailer published a story last week titled: Beyond North America and Europe: Catering to online shoppers throughout the globe. The article does a good job of outlining online shopping activities for markets in Asia, Latin America and the Middle East. As you probably suspect, there is no one-size-fits-all option when it comes to selling online internationally. Each country has unique requirements and habits.
For example, the article provides some insight into online shopping habits in Brazil where installment payments are the norm and consumer electronics and large appliances are top sellers. The article also points out that in South Korea digital content is a huge seller, such as music and video downloads.
The Logistics and Fulfillment Challenge
Aside from the differences in buying behaviors and product preferences internationally, there is a host of logistical and technical aspects to be considered. For example, how do you get your product to the local market? Earlier this month, I came across an interesting e-commerce statistic that stated nearly 75 percent of retailers send merchandise to overseas customers from a distribution center in their home country. This is most likely due to the challenges and costs associated with having multiple distribution centers. This could easily be solved by partnering with a supply chain company that has the right global footprint and scalability.
In addition to product distribution, you also need to consider what payment methods you should offer and how can you manage those transactions. As mentioned above, each country may have different norms when it comes to buying items online. Think about how you can manage the payment process to ensure a seamless experience for your customers. Depending on which markets you are targeting, working with a partner may be helpful. If you offer payment options that shoppers are not familiar with then they may never complete the transaction and abandon their shopping cart.
In addition to this, there are also local tax implications. Taxes vary by country and you should work with a partner who is an expert in the country you plan to do business with to ensure you are in compliance with the local tax rules. When a shopper checks out at your e-store their bill of sale should show the amount they are paying in local currency and detail any taxes that are being paid.
You also need to consider localization for language – both for the web store and for customer support. Not only do buyers from around the world have different shopping habits they also speak many different languages. The language barrier is probably the reason why most North American companies choose Canada or the UK as their first international venture for online commerce expansion. There is a huge market beyond these countries if you build your site correctly and customize appropriately for language.
This topic is broad and there are many things to consider when planning an international expansion strategy for e-commerce. Ultimately, as with any business strategy, it is important to do your homework so you can make educated decisions about when and where to expand your e-commerce activities.
What other considerations do you think are important for international e-commerce expansion?
Want to learn more?
Download the Gateway to Global e-Commerce white paper that explores the process of global e-commerce expansion and addresses key challenges.