As shopping online from foreign retailers becomes more common, many e-commerce companies are jumping on the opportunity for global expansion. In the next few years, global e-commerce sales are expected to increase nearly 56 percent and hit about $8.1 trillion, according to Statista.
Of course, going international with your business is a huge undertaking that requires an immense amount of research, planning and preparation. Not every online business should expand globally. For some, the product is simply unnecessary or not popular in foreign markets. For others, the cost of production and shipping simply do not make sense. However, if your company is confident that international expansion is the right move then here’s how to launch your brand into global markets in four simple steps.
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How to expand your e-commerce business globally
1. Invest in a global-friendly website
Obviously, your e-commerce site is going to play a key role in the success of your global expansion. Therefore, the user experience that it provides to your new customers should be a top priority as you begin to expand to further markets. To make sure that your website is optimized for international business, you will need to know which features are essential for a smooth customer experience (CX).
The best strategy here is to partner with an international e-commerce platform like Shopify that is designed specifically for global reach. Be sure to look for one that has location settings to customize your website based on where your customers are shopping from. Everything from the language to the price to the shipping rates will change depending on the market, so your best bet is to go with one that can adjust for all of this automatically. [Related article: Open for Business: 5 Options for Setting Up an Online Store]
Always translate your website into the local language. According to a survey by CSA Research, 76 percent of consumers only make purchases from websites that display in their own language.
Another important feature to keep in mind is how quickly your website loads in different countries. For example, if your main server is located in the United States, but a customer clicks on your link in India, it could take several seconds for the page to load entirely. While this doesn’t sound like a huge deal, it could lose you that customer. According to Google, more than 50 percent of customers will exit a site that takes longer than 3 seconds to load.
Use a host that includes content delivery networks to speed up your website. This strategy means that your website’s pages are distributed globally through a connected network of cache servers to boost loading speeds.
The quality of your site will affect the bottom line, so take care with the design and features that it provides. Make sure that your e-commerce host is ready to handle a global market and can support a better CX for higher conversions.
2. Gather a diverse marketing team
Perhaps one of the trickiest parts of expanding globally is gaining brand recognition. To start turning a profit from international sales, you will need to build this sooner rather than later, but getting your name out there in the global market will require specialized marketing strategies.
Your best bet here is to gather a globally minded marketing team that is up for the challenge and highly knowledgeable about each international target market. Since your online customer base will be dramatically expanding, the demographics, preferences and needs of your audience will shift.
Furthermore, there are some channels (through which you can reach global customers) that are not available or popular in places like the U.S. For instance, there are some that are extremely popular internationally. QQ/QZone is a common chat app used in China and Taringa! is one of the most popular social networks in South America. Failing to utilize these channels properly could impact your reach and slow down your brand’s growth.
When you are ready to launch in a new market, be sure that your team has an understanding of the culture and consumer behavior. A good plan of action is to hire local freelancers for each area of expansion to ensure that your advertising messages are written properly and are effective.
3. Ensure consistent quality across markets
Another major issue that international brands run into is ensuring a consistent experience, no matter where their customer is. This gets far more complicated as the company expands to markets that are further away.
For instance, it may be much cheaper to partner with a local dropshipper that is located overseas and closer to your new market. However, with the lower price also comes lower quality. If your international customers are receiving products that are even slightly poorer quality than other markets, it could hurt your brand’s reputation, especially since it could lead to negative reviews. Therefore, it is especially important that your company finds trustworthy partners around the globe to handle the quality of your products and service.
The quality of customer support that your company offers may be affected as well. For instance, you will likely need to hire an international customer service team that can speak the various languages of your global customers. However, if they are not trained properly, they could also hurt your business’ reputation with ineffective service.
As your business continues to grow, be sure that quality assurance checks are conducted regularly to assess things. Stay on top of your customer reviews and address any issues as quickly as possible before things get out of hand.
4. Track progress relentlessly
Going international can be a little bit of a risk, especially if your brand name is relatively unknown in a vast new market. There is always a chance that things will not pan out or gain traction. Therefore, your team must track the numbers relentlessly to be sure whether or not this global expansion is the best move for your company.
Of course, sales numbers are an obvious metric to keep an eye on, but other numbers can signal whether or not your brand is gaining acceptance. For instance, website traffic, social media following and repeat buyers will show that your customer base is actively growing and your brand is breaking into the new international market.
Remember, it can take time before you start to see any fantastic results. However, if things start to slow down or remain stagnant for a long period of time, it could be a sign that you should look elsewhere. Thankfully, with e-commerce and online selling, this is fairly easy to do. If one country or international area doesn’t work out, try another.
Mistakes to avoid when taking your e-commerce business international
Taking your e-commerce business into other countries can expand your market, but there are also significant risks involved. Avoid these common mistakes when going global.
Not doing sufficient research
Before launching your business in a new international market, research that market thoroughly to make sure that your product or service has a good chance of success in that area. Research the following topics.
Demand: Is there enough demand in this market for your product? Look at competing products to gauge if there is ample need, especially at the price point you are intending to use. Remember to factor in any additional costs associated with doing business in that market to arrive at a price and then compare that figure with competitive products. Assess if your product provides something new or is it just another lesser-known version of something people already have.
Additional costs: Doing business in other countries involves a lot of additional costs that you don’t have when selling domestically. For example, foreign exchange rates can fluctuate and rapidly eat into your profit margin. Physically getting products to foreign countries is more expensive because of additional shipping expenses and tariffs, taxes and customs fees. Have a firm handle on these extra costs to ensure that your venture in that market can be profitable.
Laws, regulations and political stability: Foreign countries have different laws and priorities than those in the U.S. For example, the European Union has much more regulation around data use and privacy as well as sustainability and genetically modified organisms (GMOs). Make sure that your product meets any regulatory requirements in its makeup and packaging and that your data and security policies are in line with applicable laws.
Other countries may see American businesses as threatening to their domestic industries and could put restrictions on U.S. companies that want to sell there. For example, China sometimes gets into trade wars with the U.S., causing it to raise tariffs or stop importing American goods. In addition, if the Chinese authorities feel that anyone in your company has said something negative about their government, they can stop you from operating in the country altogether. In countries that are politically unstable, your business operations may be interrupted by civil unrest, political upheaval or a new government with different priorities. Make sure you know the risks and have contingency plans for various scenarios.
Reliability of international partners: You are likely to need a local partner for logistics, customer service or even manufacturing. Since they are so far away, it is more difficult to keep tabs on their operations or assess their financial stability. In addition, you may run into issues with time zones, communication and culture. If possible, visit prospective international partners before hiring them. Get references, especially from firms they have done business with in the U.S., to identify any potential difficulties.
For information about how to ship to different countries, one good (and free) resource is DHL’s country guides.
Sensory preferences: Consumers in other countries may have different preferences and expectations than U.S. consumers. For example, if you are selling a scented product like soap or perfume, you should be aware that consumers in Japan prefer much lighter scents than Americans.
Colors in other countries also have a different connotation than here. For example, in the U.S. and Europe, red is correlated with excitement, danger, love and sensuality. In former Soviet bloc countries in Eastern Europe, it indicates the repression of communism. Likewise, in the U.S., green evokes the environment, progress, luck and wealth but in Indonesia, it is an extremely negative color representing exorcism and infidelity.
>> Learn More: International Business Etiquette From Around the World
Trying to do it all at once
A lot goes into launching in another country successfully, so it makes sense to take your time and do it right. If you try to launch internationally all at once, you are bound to cut corners and fail to analyze and set up each new market properly. Instead, create a strategic plan for your international expansion. This will give you a roadmap to follow so that you can roll out each new market, make adjustments as needed and become profitable before moving on to another location.
Not understanding your target market
You may have a great understanding of your U.S. market, but this does not translate automatically into comprehending the characteristics of your new target markets. While some places may offer similarities to American customers, there will be differences. If possible, contract with a local market research firm to learn about the target market in each country or review existing studies on them. Talk to your international partners to get a better handle on conditions, such as the economy and cultural trends that may impact product demand.
Neglecting to collect required taxes
Just like you need to collect appropriate sales tax in each state you do business in, you are required to collect all applicable taxes in every country. Failure to do so can get your company in some trouble with the local taxing authority. Be sure you know the amounts and nuances. For example, in the EU, there is a value-added tax for all imported products sold to EU citizens, but the amount varies by country.
Not offering preferred payment methods
It’s a fact that companies that accept the type of payment methods preferred by customers make more sales. In different countries, customers prefer other forms of payment, so it is important to accept those types. For example, in Germany, Giropay, a payment method that utilizes customers’ online banking accounts, is popular. In Asia-Pacific, customers tend to prefer bank wire transfers for online purchases.
Listing your prices in your home currency
Chances are that you don’t always know the exchange rate between dollars and other currencies, so why would you expect your customers to? In each local market, display prices in the local currency for a seamless shopping experience. It will reduce your bounce rate and improve your conversions.
Going global is a fantastic adventure for online brands and it can truly expand your horizons in many ways. Of course, before you make this decision, be sure that you do lots and lots of research to find the markets that will be best for your brand. Invest in the right tools and focus on creating an experience that will delight your new customers. Remain consistent, seek improvement and watch your results to be sure that this is the best path for your company.
Taral Patel contributed to this article.