In the days when there was no Internet, nearly every business was local. There was no way small retailers could reach customers outside their geographical territory. But things changed dramatically with the emergence of the Internet and the advent of eCommerce. Nowadays when you decide to sell something online, you can have customers from any corner of the planet. Many retailers have an overwhelming urge to become global eCommerce brands; and why not? Every business needs more and more customers to grow, right?
But selling in the international market can be altogether different to what you may expect if you don’t have experience in cross-border eCommerce. You can not just make an international website for your US or UK business and expect to sell the same way in every country across the world. Having a multi-currency drop down menu on the website and accepting payments via credit card doesn’t make you a global seller. A lot more planning and execution work is required to develop an international market for your brand and it can be a long but rewarding journey for your eCommerce business. In this article, we want to provide advice about some critical steps involved in building a successful, global eCommerce brand.
So how do you do it? First of all, if you want to sell internationally, the question you need to ask yourself is not – “How do I internationalize or globalize my eCommerce business?”, but rather “How do I localize my business to the countries where I want to sell?”
Internationalization of your eCommerce brand will be a step-by-step process of localizing your brand to one market after the other. You will have to create new channels to sell in these new markets. So let’s dive right in and talk about some of the crucial phases of localization of an eCommerce business. It’s surely not an exhaustive checklist, but can give you a direction for a great head start.
1. Establish Your Business Locally
First thing first. Establish your business in your local market – make sure you’re profitable in your own country. That’s because entering a new market can be expensive, in terms of additional investment in website development, marketing, logistics, support, etc. Thus you must enter a new market with a proven business model. Selling an untested brand, products, and services in a new market will only lead you to making costly mistakes.
Avoid the thought of global expansion until you’ve grown enough domestically and know exactly what your brand and overall business stands for.
2. Pick The Target Country
Many startup eCommerce retailers don’t spend enough time educating themselves about global eCommerce trends. They have a vague idea about the countries to which they want to expand, but unfortunately, it doesn’t work that way. If you’re a typical startup, operating your business on a limited budget, it will be practically impossible for you to enter 10 new countries at the same time, because the online shopping behaviour of customers differs dramatically from one
market to the other.
Research and identify a new target market or country. Learn how things work in that market and build strong relationships with people on the ground. If possible, go visit the place or have someone local who can educate you about it. You need to have a clear idea of how you will connect with the target customers in this market through localized content and communication. Again, relationships are key – find local partners & associates with whom you have a shared commitment to create success in the new market.
3. Find Global Parcel Carriers
It’s definitely harder to ship globally than domestically. Therefore, before you accept a single international order, find a shipping partner who can ship to the destination country. You will need global parcel carriers to facilitate the process, and assist you with the import compliance regulations of that country.
In general, UPS or FedEx tend to be the best option for shipping international orders. Though they charge more than other service providers, they also provide better tracking and delivery guarantees.
All courier companies base shipping rates on a variety of factors, including: service level, weight of the package and/or package size, regional zonal pairings – departing country & destination country, tracking, insurance, and more. Global shipping rates also depend on package characteristics such as special handling charges, duties & taxes, restrictions that vary by country, as well as important terms and conditions that vary from one shipping provider to the other. Thus, it’s advisable to do a cost comparison before selecting your parcel international parcel carrier.
Fulfilment services: According to the country you choose to target, if you want to provide faster delivery of your products, you can also hire a fulfillment service provider such as Amazon or Shipwire to manage international orders. If you decide to work with a service provider, your inventory will be stored in their warehouse and as soon as a new order is placed, the order information will automatically be forwarded to them. Your fulfillment partner.will locate, pack and ship the purchased items on your behalf.
If you choose your fulfillment partner strategically and find a warehouse location that’s closer to your target country, it will allow you to ship your orders faster in that country. These companies usually charge a flat per order fee to manage packaging, labeling, shipping, and monitoring all the complicated international shipping rules and regulations.
4. Know The Local Sales Tax or Import Duties
Be aware that shipped packages can be held in customs for days, weeks, or even longer. Thus, it’s important that on your website’s shipping information page you communicate the possibility of delays in shipment due to reasons that are beyond your control.
Also, mention the local applicable sales tax & import duty-related liabilities for customers in your target country. Let them know if the shipped product will be delivery duty paid (DDP), meaning the custom duty & taxes are included in the final checkout price, or delivery duty unpaid (DDU), meaning the customer is liable to pay any local sales tax or import duties. If it’s DDU, you must receive the customer’s confirmation prior to dispatching the shipment to ensure they are fully aware of the DDU policy and the additional shipping cost. This will help avoid any last-minute, unpleasant surprises for your international customers.
5. Figure Out Payment Methods
For eCommerce businesses looking to sell internationally, the issue of payment methods is perhaps the biggest blind spot. Merchants assume their customers will pay via credit card, whereas in reality, the customers in the target country may not even have a credit card or may prefer using a different payment method for online purchases.
Always remember that preferred payment methods vary from one country to the other and ultimately can have a huge impact on your website’s conversion rate in that country. According to a recent study, in Western Europe, the percent of online shoppers who use credit and debit cards is approximately as follows: UK – 95%, Spain – less than 76%, Austria – less than 33%, Netherlands – below 15%, and in Germany – less than 14%.
If you’re a US-based brand looking to sell to Europeans, it’s important to know that:
- ~ 60% of online payments in Holland are via direct debit services
- ~ 50% of online payments in the Czech Republic are via cash on delivery
- ~46% of Germans use online bank transfers when shopping online
6. Provide a Localized Online Shopping Experience
To be able to effectively tap into a specific market, you should offer a localized online shopping experience to your customers in the region. This step has a big development cost associated with it, as it will require that you create a separate, dedicated website, but it will allow you to:
- Offer the website in the customer’s local language
- Display products according to local trends and weather conditions
- Show product pricing in local currency
- Offer the preferred payment methods in the region
- Run special marketing campaigns as per local events and holidays
- Provide merchandising experience in a way that customers are able to relate with the brand
eCommerce platforms such as Magento have built-in functions that allow you to create local chapters of your website for different countries and manage the entire content from a centralized content management system.
7. Get the Language Translation Right
Do you know that customers are 4 times more likely to buy from a website in their own language? Most retailers hire a specialized translation company to translate the product catalogues. Unfortunately, merchants often don’t check whether the meaning and tone of the text translated by these companies is in-tune with the personality of their brand, mainly because they don’t can’t read the final translation.
Thus, in addition to partnering with a great translation company, it’s best to have someone in-house, who is proficient in the language into which the website is being translated and who also has a firm understanding of what your brand stands for.
8. Invest in Local Customer Support
When your international sales grow, consider hiring people to provide customer support locally. Providing local customer support phone numbers can not only increase the conversion rate of first-time buyers but will also increase the conversion rate of returning customers.
Remember that even before your business came into existence, there were brands such as Samsung, L’oreal, and Nokia who managed to become powerful global brands in a far more challenging environment than yours. The fundamentals of building a global brand haven’t changed much with eCommerce; it’s still about localizing the business to grow in a local market.
About the Author
Pulkit Rastogi, Founder at ILoveFashionRetail.com
I specialize in Fashion Ecommerce, Conversion Rate Optimization and Brand Positioning.
Published writer. Available for Speaking and Consulting.