Expanding global e-commerce to any country comes with challenges and complexities. Here’s how to do it right. [Klaus Vedfelt / Getty]
The benefits of expanding global e-commerce are obvious: access new markets and revenue streams, increase brand awareness and improve your bottom line. While it’s tempting to go full speed ahead to capture your global potential, it’s important to be strategic. There are many considerations (and dangers!) to be aware of.
Before joining Salesforce as Senior Director of Success Architecture, I managed direct-to-consumer channels for two fast-growing US companies. Through trial and error, I learned how to map out a successful global trading strategy.
While every business is different, I’ve found that there are five key steps to international trade success:
Identify the potential of the international market.
Understand the challenges of international e-commerce
Locate by market
Determine payment methods.
activate and launch
Let’s examine each one.
1. Identify the potential of the international market
It’s easy to find the volume of digital transactions in a given country, but that only provides a starting point. Look deeper: compare that volume to the size of the population. Check if digital and logistics capabilities can support further growth. Scan the geopolitical environment to make sure the conditions are right.
Understanding the level of brand awareness is also critical. If your brand is relatively unknown, consider the cost, time, and effort of building awareness.
It’s easy to find the volume of digital transactions in a given country, but that only provides a starting point.
This exercise will help determine the fertile countries for growth:
Look for consumers abroad who know your brand.
Capture as many data points as possible.
Drill down into web tracking data to learn where people are browsing your site.
If you have non-transactional sites in the countries you’re considering, analyze traffic volume and trends.
Include referrers and social media signals in these markets.
2. Understand the challenges of expanding international e-commerce
Expanding global e-commerce to any country comes with challenges and complexities. For example, a US retailer looking to expand into Canada (with a forecast of $33 billion in e-commerce sales in 2024) must consider customs, duties, and taxes. Taxes can be very complex depending on the legal status of your brand in certain provinces. Similarly, businesses in China face challenges including performance, data residency compliance, and the difficulty of integrating with local Chinese platforms.
In my experience, it is more effective to first target a small number of strategic countries with high growth potential.
In my experience, it is more effective to first target a small number of strategic countries with high growth potential. Fill the remaining markets with a verified third-party international fulfillment service. You can connect to your own payment experience. Salesforce Commerce Cloud customers can take advantage of the AppExchange and Commerce Cloud Partner Marketplace for pre-certified fulfillment partners and faster integrations.
The partner you choose must manage all back-end fulfillment on your behalf. Your capabilities should include payments, compliance, duties, customs, and tax compliance. They should provide a low risk option for testing in many markets.
3. Locate by market
Once you decide that a market opportunity exists, dive into the consumers. Providing a localized experience goes far beyond site translation, though even that has nuances. A “sweater” in the US is a “jersey” in the UK, for example.
Language is the most important consideration for localization. A bad translation can be a big barrier to conversion on foreign sites. Other factors include different address formats and various payment preferences.
Usability also plays a role in a localized experience that resonates with customers. Consider separate product photos showing local models or close-up shots of seams and labels.
Identifying popular social channels in the region you are targeting is a key factor in localization.
Identifying popular social channels in the region you are targeting is a key factor in localization. For example, social media has been the primary channel for e-commerce in China for several years, but the platforms that are commonly used in China are not available in the US. With social commerce on the rise, it is important to understand the complexities of social platforms. in different regions.
Finally, campaigns may need a local makeover as part of an international e-commerce expansion. Some countries start end-of-season sales earlier than others. Weather conditions in different hemispheres trigger the need for different clothing.
Your localization checklist
Decide your approach for campaigns and promotions. Is it a unique model or specific to each country?
Consider your product catalog and inventory mix. Is there a central warehouse that sells the same products in all target countries or are there exclusive products per country?
Develop your pricing strategy. Will the price of the item be the same in all regions?
Determine the shape and size of your teams. Will there be individual teams in the respective countries? What is your size and level of web management skills?
Identify the prevailing social media platforms and trends in the region you are targeting.
4. Determine payment methods
Payments and taxes are two of the most complex factors affecting the expansion of global e-commerce. Address these locally based on legislation, diversity of payment types, and consumer preferences.
Analyze your target market to understand and offer the best payment mix. Many consumers in the Latin American market use a payment system called DineroMail. After making a purchase, buyers are directed to a DineroMail site. They print out a payment slip, then take it to an OXXO or 7-Eleven to make their purchase.
Salesforce Commerce Cloud natively supports currency and payment plugins from leading providers. This makes it easy to quickly launch relevant payment providers in the country or region of your choice. Customers can pay in their local currency using their preferred payment method.
Brands should also consider capture and settlement when it comes to foreign payments. During the investment phase of your expansion, you can spend money on currency exchange fees if you pay local partners and employees in local currency but settle digital revenues in your home country.
In some countries, the complexity is increased given Internet and consumer regulations. In others, you may face a volatile currency. If you are going to be trading in local currency but want to capitalize on your local market, you need to watch the exchange rates carefully. You may even consider evaluating the risks and potential insurance options.
In addition to that, you may need to establish a local bank account abroad. Be sure to complete the entire application process as soon as possible to ensure all systems are in place when your site is ready to go live.
5. Activate and launch
Brands may want to take advantage of a minimum viable product approach to accelerate the expansion of global e-commerce. Companies could consider working with existing vendors as a low-risk option to test markets. Before hiring new partners, check existing third-party logistics providers (3PLs). A payment gateway in Europe can also support payments in Latin America. Run a full assessment with all vendors to determine their capabilities.
Make sure all 3PLs comply with local requirements. For example, can your CMS handle European umlauts and Asian characters? There are a million things that can trip up your launch, frustrate your customers, or put a dent in your plans.
Prepare for what’s next in international trade
As I discovered in my previous roles, Commerce Cloud’s multi-site functionality makes it easy to create and manage local site instances and implement localized marketing messages and promotions, global content strategies, custom price lists, and more. Additionally, you can find pre-certified translation providers on the Commerce Cloud Partner Marketplace to help you implement professional, automated translations directly into your site and marketing efforts.
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