By Paul Watson, CEO, Volo.
Ecommerce is transforming the world into one global marketplace and a growing number of online retailers are looking at international markets for new growth opportunities. The European market is particularly attractive as it offers access to over 500 million potential customers.
At the moment Britain is the world leader in ecommerce, with its share of total retail sales expected to increase from 14.5% in 2015 to 19.3% in 2019 and the market's total value estimated at £60 billion for 2016.
Before setting sail to new horizons make sure you have mastered domestic channels and local marketplaces to their full potential. To do this, you need the people, software and automated processes to make your business as efficient as possible. Ask yourself, what marketplaces bring me the most success? Is my sales management efficient? Are all my listings correct and user friendly? Are my warehouse processes in order? Do I have a clear reporting process on all channels, stock and growth opportunities?
Once you have these elements under control and running like clockwork, you can start looking further afield. Despite its growth the UK market is approaching maturity and most online merchants are finding it difficult to deliver double-digit growth rates; the competition is fierce and buying habits are diversifying. Also, with only 7% of British retailers selling online in the EU, there is plenty of room to grow by applying the extensive knowledge you have acquired on the domestic market.
Spreading your wings
So, what should a business consider to successfully navigate the nuances of local customs, tastes, price expectations and product requirements? All the while delivering a high quality shopping experience for potential new customers?
Start with the basics and undertake extensive research on your target markets. Try to understand the cultural differences and shape your expansion strategy accordingly.
Some of the essential elements you need to consider when planning to sell abroad are:
- What are the tax requirements for the target countries?
- How do we deal with international deliveries and returns?
- What are the legal fine points that need to be considered when entering a specific market?
Once you figure these out it's time to get your products online. Sales channels work differently across various countries. In the UK, eBay and Amazon are clear leaders in the ecommerce world, however it is not as clear-cut in mainland Europe. This makes the region harder to succeed in, especially if your company's experience lies solely with eBay or Amazon.
Speaking the same language
Perhaps one of the most significant aspects that retailers overlook when expanding into international marketplaces is product listings.
Don't simply assume that everyone speaks English or that 'Google Translate' is sufficient for prospective customers. You need to clearly communicate the unique selling points of each product and make sure they stand out from the crowd.
As most people prefer to buy in their native language, a small investment in native translation could give you a significant competitive edge.
Positive reviews are also a great resource to leverage as they have a major influence on buying decisions. Offer some small incentives to encourage your customers to post reviews and make sure you address any potential issues in the shortest time possible.
Order fulfilment is another area you will need to consider before expanding your company internationally. Depending on the region you want to move into, you need to carefully consider what country to send parcels from and where stock will be held.
Amazon 'FBA' (Fulfillment by Amazon) can manage fulfilment in a number of countries, and specialist fulfilment companies provide a similar service of managing an end-to-end supply chain globally.
When setting up shop in a different country, make sure that you don't overlook tax and compliance differences. It is critical to assess local regulations and ensure that your invoices comply with the local regulations. At the same time, tread carefully with the foreign currencies as they can fluctuate and affect your bottom line.
Expanding to new countries can seem intimidating even for a seasoned online retailer, but with a good team, an efficient software platform that automates key processes and these basic tips in mind, you'll be able to successfully conquer new territories and see your business grow at an impressive fast pace.