When U.S. retailers launch global e-commerce efforts, they often start with countries that have a long-standing trade history with America. Shipments to Canada are soon followed by expansion into the United Kingdom, Australia or other English-speaking areas.
Some organizations stick with this strategy — where few barriers to entry, cultural similarities and overall market understanding provide for a “safe” selling environment.
Increasingly, however, U.S. retailers have discovered that more significant growth opportunities exist in the more up-and-coming markets, where e-commerce is taking off at record pace. For example, in countries such as Brazil, Russia and Germany, the combination of higher disposable incomes and a growing appetite for brand-named goods is creating high demand. The numbers speak for themselves:
Beyond these countries, e-commerce sales in smaller markets, including Mexico, New Zealand, Israel and the Philippines are adding up fast. To give you a sense of the opportunity overall: while some U.S. retailers were excited with the 18% year-over-year increase produced by Cyber Monday 2013, other retailers who are selling on a global basis are reporting annual growth rates of 40% or more.
However, adding new markets one by one can be a slow, resource-intensive process when relying solely on in-house capabilities. Countries take their import/export laws seriously, and if you don’t ship the right goods to the right people in the right ways, you could be subject to penalties or even denied entry to markets.
Consider Brazil. You’ll need to know what imports are prohibited — pre-owned merchandise, antiques and precious stones, to name a few. You’ll also need to know when to apply import duties, the Industrialized Product Tax, the Merchandise and Service Circulation Tax and other tariffs, as well as how to comply with country-specific forms, country-specific product coding and local shipping rules. Now, multiply that knowledge across every hot market in Latin America, Europe and Asia-Pacific. Do you need to collect passport information from your buyers? Are their monetary limits on what can be shipped to each household? What other country-specific rules are in play?
Clearly, those 40% growth rates don’t come without assistance. That’s why U.S. retailers who are ready to expand beyond the “safe markets” turn to third-party experts to provide the capabilities and the country-by-country know-how to satisfy both international buyers and local-market regulators.
So, what does it take to succeed on a global scale?
Selling in-language is certainly a best practice, but unless you are prepared to provide end-to-end support in a specific language (including customer care, FAQs and forms) you may be better off marketing your products in English. When it comes to language, it’s better to set realistic expectations upfront rather than to confuse online buyers with a change later in the process.
There are five other areas where you cannot afford to cut corners.