According to the U.S. Department of Commerce, U.S. online retail sales nearly quadrupled in the decade from 2005-2015 and is projected to surpass 600 billion dollars by 2019. The rapid expansion of the Internet, the use of mobile devices, better payment options and advanced shipping are all contributing to the rapid growth of the eCommerce market.
However if you delve deeper into the data, online sales are growing in the emerging markets of Brazil, India and Russia at a faster rate than North America, with China alone expected to surpass the US market by the end of 2016.
Where some businesses have looked to carve new niches or throw their lot in with the big online marketplaces, many businesses are now looking further afield in an attempt to drive growth, increase online sales and tap into the opportunities of these emerging markets.
However with a variety of payments methods, cultural differences and language barriers to contend with, the key to international eCommerce success is to think local. If you haven’t done so already, here are a few reasons why you should consider localising your eCommerce website.
Boost your earnings and your website
It’s an obvious point, but a crucial one: by only addressing the English speaking internet population you’re immediately limiting your reach. Almost three quarters of internet users do not speak English as a first language, and even those who know some English may be stumped by unfamiliar interfaces and technical language.
It’s important to ensure that the various search engines across the world understand your website’s target market. Most eCommerce platforms can help to facilitate geo-targeting via the creation of sub-domains e.g. de.example.com or sub folders e.g. example.com/de. If you’re targeting multiple countries then your website structure may look something like:
- example.com/de (targeting Germany)
- example.com/fr (targeting France)
- example.com/it (targeting Italy)
Content, products and language can all be tailored for local markets, ensuring that your website has the best chance of being found by the search engines in each country. The result is a whole new audience to pitch your product to. Unless you’re selling a purely digital service there will be considerations to taking transactions and shipping abroad, and you may need help to navigate the various tax arrangements (see the recent EU VAT directive). But if it ultimately means more profit and more exposure, that can only be a good thing.
Build familiarity and trust
Your business may already be conducting some trade internationally; it may even be doing superbly. But the key to building any brand for the long haul is trust and familiarity. Without feeling like a local venture that understands and caters to its audience, your online business will lack the staying power to hold off competition. A homegrown business that undercuts you and sells the same products is not going to have a hard time competing if you don’t even serve customers in their language.
Take the time to analyse the different markets you do business in, and tailor the shopping experience to what those audiences like and find convenient. Make sure the language you use is familiar and pertinent, and work with translators to optimise content to local jargon and technical terms. It’s likely that you’ll find that your brand recognition and sales will improve, and the security that positive experience provides will stand you in good stead through any economic bumps.
Customising payment solutions for local customers
One of the most important factors to encourage and increase sales is having a variety of payment options (PayPal, Amazon, credit card etc..) during the checkout process. Online shoppers want access to the payment processing solutions that they’re accustomed to. For example in Japan and Mexico cash on delivery is common for eCommerce purchases, 60% of transactions in the Netherlands are made through iDEAL and in Brazil, merchants have a long history of accepting installments for purchases.
If you’re serious about international expansion then the most likely process will be to establish an international merchant account, providing payment processing, fraud prevention and currency conversion for deposit into your U.S. bank account. It’s also important to note that Visa and Mastercard require a company to be based in Europe to receive European transactions. The UK is often held as the easiest EU destination for company formation – and under Visa and Mastercards’ guidelines, it will remain part of their European zone even after Brexit.
Test new markets without physical presence
The great advantage of e-commerce businesses is the ability to cut down on physical assets in the early stages. You don’t have to be an Uber or Airbnb that’s essentially location independent, but localization can allow you to expand into new countries on whatever scale suits your business. Opening your business up to these new customers and cultures quickly highlights which products and services work well in that locality.
It’s also important to distinguish localization from translation. Simply translating your slogan or products can lead to awkward misunderstandings, as many an internet list piece can attest. And while there may be added difficulties in customer service, those interactions can teach you a lot about etiquette and the subtler demands of selling internationally. This knowledge will set you in good stead should you expand to more concrete locations in future, and begin to build more intimate relationships.
Niche products and niche countries
It stands to reason that most companies looking to expand overseas will research the competition, determining whether their products are already available and possibly diversifying their product range to take advantage of any niche opportunities not currently being served.
However an alternative strategy will be to examine niche countries. Depending on your offering, you may find that your product range will already have strong competition in the relatively mainstream countries of the UK, US or Germany, but there may be countries where you product is still viewed as unique.
For example Croatia may not be a country that immediately springs to mind, but three quarters of the population already buy products online from overseas companies. There’s less resistance to buying goods from non-local organisations and there’s less competition. Even Amazon hasn’t made its way there….yet! Making a shortlist of countries that suit your needs first, rather than exploring the various competitors in the obvious locations may help you uncover where the best opportunities are.
While many view the eCommerce market as saturated, it’s important to remember that the Internet is still relatively new, and there are still plenty of opportunities for those willing to expand overseas. Creating a localised version of your site and targeting that country could allow you to beat the competition, and lead you to a level of dominance abroad that you could never achieve at home.