International e-commerce is the business of selling a product through an e-commerce website to buyers in foreign countries. As the proliferation of digital tools increases internet availability worldwide, any company can sell online, making international e-commerce easier than ever before for both pure play companies and brick and mortars. For traditional retailers, e-commerce can also serve as a testing ground to determine whether new, foreign markets will be successful before opening a physical location there.
While it’s tempting for e-commerce professionals to assume expansion into a country with a similar culture will require less work, the word “international” is key. No matter how much countries have in common, each one is unique. Canada is not the United States, Belgium is not France. Every global market deserves its own methodical planning and consideration.
Four Areas to Investigate Before International Expansion
In addition to financial investment, building an international e-commerce presence takes effort. That’s why marketers, logistics professionals, and others must ensure the timing is right. How do you know the business is ready?
1. Start with operations
International expansion doesn’t necessarily need a brand new pool of resources, but it does take commitment from the ones you already have — namely, people and finances. Regarding human resources, executing marketing and operations on a global level requires a unique skillset. Employees should either have international experience already or be willing to learn something new. If they aren’t, consider hiring new staff or shifting certain individuals into domestic-only roles. From a financial standpoint, it is recommended that business with global aspirations carve out an international marketing budget separate from their domestic marketing budget — depending on overall growth strategy and market conditions, of course.
2. Weigh product demand with international supply.
Google Insights and similar SEO measurement tools can track how often consumers search for certain items, as well as measure existing foreign traffic to your site. High conversion rates and/or average order values from a particular region are strong indicators as well. Additionally, examine international e-commerce figures that measure which products consumers in the target country are accustomed to buying online: For example, 47 percent of India’s online spend goes toward electronics, the country’s most popular e-commerce category. But in China, clothes and paper towels are hot ticket items, selling better online than in-store.
3. Look for a competitive vacuum.
In developing countries, new markets show sharp increases in the number of consumers using mobile to go online. Before, traditional retailers made the mistake of ignoring these markets in lieu of focusing exclusively on growth in markets with established, physical operations. Even in their own countries, they failed to see e-commerce’s potential, making it harder to later gain market share. In Belgium, for example, German, French, and Dutch companies actually have larger market shares than Belgian retailers for this very reason: Domestic businesses were too concentrated on brick and mortar while foreign competitors seized the online opportunity. International e-commerce allows smaller, more agile companies to enter emerging markets and establish themselves early as market leaders.
4. Determine the scope of expansion.
International growth is typically much easier for e-commerce operations than for brick and mortar. Will the company need to open physical locations? Or does international growth simply mean adapting web design, payment, and shipping for global shoppers? As with any other initiative, the better the company defines its needs, the more likely it will succeed. It’s important to decide early on what global expansion looks like for your business.
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