While the internet creates the illusion of a borderless world, e-commerce businesses still have to understand the peculiarities of each country, choosing their market for export. However, expanding an online business globally today seems more realistic than ever.
DHL logistics company forecasted the cross-border e-commerce market would grow by 25% by 2020.
E-commerce markets continue to expand, especially those in niches such as:
- Beauty and cosmetics
- Pet care
- Food and beverage
- Sporting goods
According to Shopify research, more than 63% of European consumers make purchases from overseas retailers, overpaying for delivery and tax levy. Whereas, 21% of Brits don’t purchase abroad because of the lack of brand recognition.
How can your e-commerce business attract international customers and increase brand recognition overseas?
Create a detailed cross-border digital marketing strategy.
If you have a plan, it’s much easier to allocate your time, sort out priorities, and reach the desired outcome quicker.
Almost every brand can sell internationally if they realize the potential demand and are brave enough to put in the work necessary for success.
How to Prepare Your Business for E-Export
See where there is a demand for your product using digital tools (e.g., Google trends, Consumer Barometer)
Examine obstacles by researching your competitors and making sure you're complying with the target country's importation laws
Localize your marketing strategy to the host country (e.g., language, payment method, size charts if selling clothing or shoes, and graphic design)
Audit your processes and make improvements
Step 1. See Where There Is a Demand for Your Product
Businesses should first identify which countries have a demand for the products you offer.
If have already found your “Zag,” or what sets you and your products apart from everyone else, then you’re ready to analyze:
- Demographics of your website’s visitors
- Engagement rate
- Conversion rate
- Cart abandonment/bounce rates
This first step will help you select the regions for future analysis.
If you are still in the “Zig” position or selling ordinary products with additional value, and you don’t have enough organic traffic from other countries, then digital tools can help you gain insights that can inform your next steps.
Google Trends is a free tool designed to help retailers examine the most popular queries across different markets.
Using Google Trends service, you can compare the statistics of up to 5 keywords to reveal how often these are used in different regions, find out the related queries and track in which categories users search by them more.
Be aware that by checking a query in English, the system will only track exact-matched words and phrases, and most consumers from your potential countries for export can use their native language instead.
Google Shopping Insights
In case you are planning to export your e-commerce business to the United States, use Google Shopping Insights as a tool for in-depth research on market trends (since it is currently available only in the U.S. regions).
The service allows you to find out not only the query statistics data, but also reveal your main competitors and analyze searches by device.
Moreover, the new Google feature helps study trends within a specific shopping category and compare the demand.
Keyword Tool is another interesting tool, succoring to find the particular interests of consumers in a market you want to penetrate.
The ability to research close to your keywords queries not only within Google search, but also on YouTube, Bing, Amazon, eBay, Play Store, Instagram, and Twitter is its main advantage.
You can also find indicators of the average CPC and the competition in the number of advertisers bidding, how the search volume has changed over the last 12 months, and most used hashtags of your e-commerce contenders.
Please note, however, that the Keyword Tool is only partially free.
Assume that you have selected 1-3 countries you possibly can succeed in exporting your e-commerce business. The next goal is to go deeper into market insights.
For this purpose, you can use Consumer Barometer, a Google tool which provides you with information on online user behavior at different stages of the purchase funnel.
For example, you can reveal when they start researching a product you want to export, what devices and methods they usually use, or how many brands they consider before making a choice. Moreover, you can find consumer attitudes to international purchases — their fears and issues, most popular product types, or usage of translation services.
Market Finder is another Google tool, which can help you find market insights and provide you with useful recommendations on localization, payments, customer care, logistics, requirement, and tax and legal aspects.
Using Market Finder, you can also create an export marketing plan.
Along with that, to dive into inner country statistics and to see how the market has changed over the last year is highly recommended. As an example, you may find the overall economic growth, average salaries, or tax dynamics. For these purposes, use various researches of local consulting companies.
Using tools like these can help you examine the demand for your products in other markets and help you determine which market presents the most potential.
Step 2. Examine Obstacles
Before you expand into new markets, you need to know what you’re getting yourself into.
Examine potential challenges such as competitors and local import/export laws of individual countries that could slow down your momentum in these new markets.
Research Your E-Commerce Competitors
There are three types of rivals, whether this is your home market or not.
- Primary — These are your direct competitors with the same target audience, product range, and prices. Pay special attention to large marketplaces here as they usually rank first in the search results and have the highest CPC.
- Secondary — These are companies with a similar assortment but a different audience.
- Tertiary — These are retailers indirectly related to you; however, they may become competitors if you expand your line in the new country at a later date.
Primary competitors require the most attention at the beginning of your expansion endeavors.
You can use a number of tools to identify and research these rivals. For example, SimilarWeb allows you to find out the website traffic data, including sources, regions, and referring sites. It also analyzes display advertising, website content, country and category ranks, pages per visit, bounce rate, as well as similar sources.
Additionally, SEMrush and Alexa let you compare several websites or categories simultaneously and check the information on consumer behavior data, popularity, paid and organic traffic shares.
Organize your competitors into categories and tackle the ones closest to your brand first.
Make Sure You Comply With Export Controls in the Target Country
Every country has its own export regulations.
If you are planning to export to EU countries, consider the new EU VAT rules (called “e-commerce package”) that will come into force in January 2021. These rules aim to combat fraud.
According to these rules, marketplaces or platforms will be deemed for VAT purposes to be the supplier of goods sold to customers in the EU.
Consequently, e-exporters will have to collect and pay the VAT on these sales.
Additionally, companies that sell export goods to European customers online will be able to deal with their VAT obligations in the EU through one easy-to-use online portal OSS in their language and their country.
Also, don’t forget that every member state has its own VAT rate, fluctuating between 17% to 25%, a list of prohibited and restricted goods, and many other subtle aspects.
Make sure you educate yourself on your target country’s laws to avoid penalization.
Step 3. Localize Your Marketing Strategy
The target country where you expand your business will have at least four “distances” from your home market:
- Cultural (e.g., language, ethnicities, religions, and social norms)
- Administrative (e.g., lack of shared monetary association, and political hostility)
- Economic (e.g., differences in consumer incomes, cost, and quality of HR resources)
- Geographic (e.g., physical distance, lack of common border)
To make these distances less drastic, consider localization.
Localize for Language
Most e-commerce exporters consider localization the biggest hurdle when expanding into a new market, especially language.
Seventy-two percent (72%) of users spend the most of their time on sites in their native language, and 82% of customers are more likely to purchase a product if advertising is in their native language. Localizing for language helps build trust with potential customers.
It’s important to hire a quality translation agency or a digital marketing agency that specializes on SEO localization. Alternatively, you could hire a freelance translator and copywriter.
This is critical to efficient ranking on the local market SERPs.
Localize for Transactions
Payments are one more crucial element of export business localization. More than two-thirds of online shoppers (67%) abandon carts because a site doesn’t support local payment methods.
For example, in the UK, almost all consumers use credit or debit cards, as well as PayPal to buy online while 41% of German shoppers pay on account.
Consumers in China prefer to pay online via AliPay and UnionPay while Brazilians choose credit cards and Boleto Bancario system.
Your e-commerce website must support multiple payment methods to succeed.
However, localization is not limited to language and currency. It can also involve:
- Tailored size charts (especially, if you sell clothes and shoes)
- Graphic design of your ad display
- Video creatives (including brand ambassadors and actors).
If you don’t have a strong brand, the best solution at the early stage of selling abroad is to find a trading partner who will help you and provide advice.
This can be large marketplaces or multi-brand stores.
Step 4. Audit Your Processes and Make Improvements
At the fourth stage, you should go back to your initial findings and improve them.
Revisit your goals and see if your current processes are allowing your business to meet them,
Although the marketing strategy may not differ drastically from the one you use domestically, the performance of your website may differ.
Regularly check analytics data and be flexible to adjust the plan at any moment.
Develop a Cross-Border Marketing Strategy
Preparation for exporting e-commerce business is a time-consuming process. However, this is a challenge that may demonstrate excellent results and take you to the next level.
The more attention you give to research, the less complicated your expansion effort will be. Believe in your product, optimize your e-commerce website, and consider the internal country rules to expand your e-commerce business successfully.