Interviews, insight & analysis on Ecommerce

Taking the leap into global Ecommerce

By Vladi Shlesman, Managing Director, EMEA at ChannelAdvisor

With the global population continuing to grow and technology introducing new ways to connect people and businesses, it’s unsurprising to see just how strongly the global Ecommerce industry is performing.
In fact, in 2021 alone, cross-border Ecommerce sales hit almost $3.2 trillion and experts estimate that number will increase again this year, as 74 per cent of retail professionals predicted the pandemic-induced rise in e-commerce will be permanent.

Cross-border commerce isn’t without its risks and complications however. The global shortage of semiconductors caused by the pandemic is proof of that as it’s hit multiple international industries harder than many could have fathomed just two years ago. The Sony Playstation 5 gaming console was released in November 2020 yet to this day it’s reported that demand is infinitely higher than can be matched by production schedules, so much so that the company’s CFO has implied that the issue is likely to continue into H2 2022. 

The automotive industry has arguably been hit even harder, with latest figures seemingly highlighting a $100 billion loss last year due to the shortage, with almost 4m fewer vehicles produced in 2021 than planned.

However, as we continue moving away from the pandemic such issues should begin to diminish so with careful planning and execution, domestic brands can continue to reap the rewards of moving to a global business model.

Taking the global Ecommerce opportunity with both hands

Businesses which have successfully sold domestically may view setting their sights on international markets as the next logical step. There’s the potential to reach untapped markets, expand their global footprint and delight new customers with the unique selling points of their products and/or services.

This isn’t a decision to be taken lightly though, as the aforementioned issues showcase all too obviously. Cross-border Ecommerce can be both expensive and time-consuming and sales could even fizzle out entirely without intentional, intelligent planning.

With that in mind, there are four key considerations any business should bear in mind before taking their Ecommerce offering global.

  1. Gauge demand and pinpoint your value proposition

While excitement for a new market is good, entering it without caution or in-depth research could ultimately result in failure. It’s vital to choose foreign markets with the strongest likelihood of success, which can be understood via a detailed demand analysis. If results show the market is over-saturated by competitors it could be a sign to target other locations, or really question how products and services stand out from the competition. The resale market in prospective target countries is also a strong indicator of latent demand for products where customers could be engaged through better service levels and product quality.

  1. Seek out compatible marketplace partners to build a strong foundation

Even the most prepared brands and retailers  lack the regional expertise of a company that’s been operating there for years. It’s therefore wise to engage with a partner located in target markets to get ahead of important details such as last-mile logistics, the country’s retail trends and steps to build brand recognition.

For many, a digital marketplace is the perfect cross-border partner due to the pre-existing digital infrastructure and install base. When selecting such a partner, it’s important to verify the level of control available as while some marketplaces exercise significant control over branding, others such as Zalando, that allows companies to design their own virtual shop environments and influence the overall customer experience. It’s also important to ensure partner and company values align to avoid unnecessary or unsavoury surprises.

  1. Understand challenges that can impact pricing

Selling cross-border means dealing with a potentially complicated web of red tape and underestimating the costs can seriously impact the bottom line of a business. It’s not as simple as passing on the cost to the customer either, as presenting an unexpected fee just before checkout can stop a sale cold. Instead, businesses should look to invest in digital tools that automatically handle adjustments so companies can be transparent about the fees customers will incur.

4. Expand your digital marketing footprint

A cornerstone of any Ecommerce operation is digital marketing. Before expanding your business physically into other territories, it’s crucial to gauge if there is desire for your products and services. The Asian market presents a huge opportunity for UK brands to grow their business but without the customer data and insight, making strategic decisions becomes a blind choice. Take logistics for example, without understanding which products will sell well locally, warehousing, order fulfilment and delivery becomes an almost impossible task. 

It’s important to develop an understanding of cultural nuances, how to use language and what messaging is likely to land with consumers. In the long run this can save a business time and money while increasing its regional reputation. Once the desire for a product or service has been established, cross-border expansion becomes a much more integrated and seamless experience. 

In the hyper-connected world we live in, there’s never been a better opportunity for domestic retail brands to branch out globally. However, doing so without taking stock of the business, prospective markets and potential challenges ahead could prove to be the undoing of retailers looking to scale-up. With the right preparation however, now is the time to seize the global Ecommerce opportunity.

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