Vauxhall, the huge UK car company tried to sell its popular car, the Nova, in Spain. It didn’t sell, because Nova in Spanish means ‘Does not go’. Failure to see a product from the customer’s perspective has resulted in some very funny situations, and that is why you must research international markets before embarking on a global expansion of your ecommerce business.
First of all, you have to decide whether it is a good time for expanding into another country’s economy. If you’ve had a great run in your home country, it doesn’t necessarily mean that the success will transfer over to international markets.
But let’s put any negative thoughts aside and take a look at the potential that global expansion offers to ecommerce businesses.
Current business operations
There is a need to audit all aspects of your current online business, from the ecommerce platform you are using, logistics network, payment and order fulfillment process to the marketing, sales and customer service departments.
All of the above will require some changes and additions in order to function properly in international ecommerce.
Is your ecommerce platform globally friendly?
Your online shoppers will be using your entire website to view and purchase products, so it is vital that it offers the best user experience for international business.
Primarily it is important to find out how shopping online is completed — on mobile devices or home computers. Your e commerce business needs to use the right ecommerce platform that seamlessly supports all screen sizes and ratios.
A choice of English as well as the local language on your ecommerce website is vital when deciding on which foreign markets will be the main focus for your goods.
Additionally, the price of your goods or services must be offered in the native currency as well as the home currency.
Alibaba is a good example of this. It is fully aware that it has international customers and helps them to change to a local language and currency to make ecommerce sales easier.
So an English speaking customer who works in Germany but has an English credit card can make an order without fuss.
Payment culture
There are many different types of payment plans used all over the world, and some of them are not compatible with a western payment gateway.
The vast majority of ecommerce sales in the west are completed using bank cards or digital wallets.
In fact, with the advent of NFC in phones and other types of wearables, digital wallets are looking at dominating the payment options. Not so in other places. Different countries have different payment gateways.
Recurring payments are difficult to process in India, due to the Reserve Bank of India adding an extra layer of protection to transactions.
These transactions are normally fully automated in the West, but in India they would need to be re-authenticated each time. That means problems for any service that is subscription based.
In Southeast Asia, for example, there is little acceptance of credit and debit cards, and around 85% of transactions are completed with cash. In fact, many people don’t have a bank account.
The only options for the majority of customers would be Cash on Delivery or using a prepaid card or voucher.
It would be disastrous to launch your products into a new international market that is unable to pay for them.
It is absolutely critical to understand the payment culture of your global customers and find the preferred payment options.
Prices: How a penny makes a big difference
In these fully global times, it is vital to understand different cultures and their communication styles.
There are some cultures that use low context communication and others that use high context communication and this affects their approach to money.
Low context cultures
Communication is expected to be precise and explicit, without room for misunderstanding or confusion. Typically western, the USA, United Kingdom, Canada and Australia are good examples, placing a high priority on written communication.
In these cultures, products seem to have a more attractive price when they finish in 9, like 12.99.
High context cultures
In these cultures, most people will have the same level of education and will share the same religion and history.
There is almost a preference for nonverbal communication and the use of body language. Underlying context and tone is more important, not just words.
France, Italy, Brazil and China are some excellent examples of high context cultures, and they prefer to see prices ending in 0, like 13.00.
Server speed and page loading times
It is a well known fact that if a page takes longer than 3 seconds to load, it could equate to a lost customer.
Internet users are not a patient group, mainly thanks to the incredible speeds offered by the big companies like Google and Amazon.
People expect all sites to run that quickly, even though it is more expensive than most online stores are willing to pay.
If your ecommerce platform has trouble keeping up during high traffic periods, it is time to switch to one that offers increased speed, perhaps via a Content Delivery Network.
Content Delivery Network
This is a network of geographically placed servers that each contain a cached version of information on the main server.
The idea is similar to mobile phone signal towers, which are dotted around the place to be able to get the best signal to your phone.
Ten years ago, if you were in Budapest and wanted to view the Harrods online store, it would normally have taken quite some time for the pages to load.
Nowadays, it is almost the same speed as if you were in London, courtesy of these CDNs.
The only problem might be if something is changed on the main server, it must be changed or updated on the CDN as well.
Logistics and Shipping
Hidden fees
The costs of international logistics, getting a product to the buyer’s front door, are not always obvious if a company has only ever delivered locally.
The expression ‘Landed Cost’ is one to be wary of. It is the total cost of a product from its manufacture to its arrival at the buyer’s destination.
It includes inland and waterway transport fees, customs, taxes, duties, tariffs, insurance and other fees.
To put it mildly, there is no possible way for a company to keep on top of all of these fees manually, without hiring a crew of accountants.
It is critical to calculate the landed costs of your products or services to establish the correct sales prices and work out the profit margin.
Free delivery options
If an ecommerce store offers free in-country delivery on its home page, it should try and offer the same on its international website.
Since courier services decide on the cost of delivery, it might be an alternate idea to partner with dropshippers, fulfilling international orders for you, closer to your target customers.
Many shopping carts are abandoned when the customer works out the total cost of purchase and delivery, and the opposite is true when free delivery is offered, even though the price may be higher.
Trustworthy partners are critical to the success of your global ecommerce business.
Customer service and marketing
Even though your potential customers are based in another region of the world, it does not give you the right to treat them any differently from those in your home country.
Not only your products but also your business image is at risk if your foreign customers are treated with less respect or sold shoddy products.
Quality assurance must be guaranteed and backed up by the support team.
However, a specialist team of customer service agents with expert knowledge of the local language is required to deal with any problems or complaints.
A good ecommerce business will understand that there are cultural and language differences that can make or break a good relationship.
By doing plenty of market research, it should become clear as to how to find new customers in the target audience.
Some cultures are very impressed and swayed by influencer marketing, giving a cult hero status to actors and singers.
A quick way to get 225 million views would be to get the Indian music video Youtube channel ‘T-series’ to promote your product.
The marketing team should be diverse and highly knowledgeable about your international ecommerce aims and specifically, the local market you are entering.
They will need to find out if there is a unique social media platform for each particular country and how to use it. Additionally, who are the A listers and who are popular with your target audience.
As always, local talent is the best option, and finding good local influencers will help you build up your brand.
Conclusion
With everything happening in the world at the moment, some might argue that it is not the right time to look into entering foreign markets, but others will disagree and say that it is precisely the right time for international expansion.
People around the world are becoming more used to online shopping and e commerce, and the global marketplaces just keep growing.
If your position is to expand globally, all I can say is research, research, research and good luck!
Originally published at https://iteo.com on November 4, 2022.
