E-commerce has become, for many companies, a so-called ‘safe haven’ and a way to survive the lockdown. The dynamic development of online sales has caused the situation that the factor to determine a success of a business is now entering the international markets.
The European e-commerce market remains leading in the global manner. About 90% of the population of the Europe admits being users of the Internet. According to the RetailX Global 2021 Ecommerce Report, in Germany, as much as 85% of people are shopping online, and the majority of the Germans of age from 25 to 35 spent at least 120 € per month online. On the other hand, in the UK, which is the largest European e-commerce market, the traditional high-street shops note a significant decrease, and as a result of it are closing permanently.
When it comes to other e-commerce giants, North American Countries, mainly the USA and Canada, they sport the highest proportion of online shoppers – 66% of any of the regions of the world. In the US, which is the second-largest e-commerce market in the world, a significant pandemic-driven growth is observed since 2020. So, there is probably no person in the world who is actually surprised about the tendency of the online sales to be opening up to new, international markets.
According to Statista, in 2021, e-commerce retail sales worldwide reached about 4 million of dollars. It is already foreseen to increase by 50% within the next 4 years and to reach about $5.7 million by 2025. It is hardly surprising that the global development opportunities attract entrepreneurs. More and more e-businesses are deciding to enter the international markets. They want to increase their profits and become more competitive.
Start with the analysis.
The first aspect to consider before deciding to sell on international markets is the choice of the country. Moreover, the thorough analysis of a given market, and consumer habits is crucial to achieve success. Creating a sales strategy should be based on the analysis of preferences of the local e-consumers, market-specific trends, and social and cultural aspects. It is also worth considering the quantitative data, e.g., demographics, percentage of consumers performing online shopping, and the qualitative data, i.e., customer requirements, e.g., standards of customer service, sought-after assortment, preferred time of waiting for the shipment, or online payment methods.
Another thing is the competition, one should get to know the market and determine the players in their field of the market. That means to understand the strengths and weaknesses, find place for the products, and verify the saturation of the market. It is important to make the price real, bearing in mind that there is a ban on price discrimination in the European Union. Prices may not be affected by the country in which the customer resides.
Knowing the rules is essential.
Both the local, and international legal regulations are extremely important elements in planning the marketing strategy. The European Union has facilitated international trade and standardised legal requirements for different types of business activities. One should get familiarized with the obligations of sellers to buyers. These guidelines can be found in the EU Consumer Rights Directive, and concern, among other things:
- Including legible regulations and conditions of purchase and return of goods on each page of the e-store.
- The obligation to inform the consumer about the conclusion of a sales contract along with the possibility of confirming the willingness to conclude it.
- The obligation to inform the customer about a full price of the goods, including shipping costs, and extra paid services.
Another important directive is the prohibition of price discrimination, which also includes the issue of geo-blocking. In the European Union, it is prohibited both to make the price of products and services dependent on the country of residence of the customer and to limit the access to them due to the user's location.
Each country also has the right to introduce local regulations, which the seller is obliged to follow. One of the more important issues is the VAT rate, which varies not only from country to country, but also from one product group to another. Local regulations also set the threshold of sales turnover. Once the level has been exceeded, the entrepreneur is obliged to register their business activity in the country of sale.
Europe covers not only countries of the European Union. The business activity can also be expanded to other large European countries, such as Switzerland, Norway, or the United Kingdom. However, it is worth remembering that the requirements for customs clearance must also be fulfilled. This entails registering in the appropriate system, placing documents on the packaging of the parcel, or paying additional fees.
The right sales platform.
Entering the foreign market is associated with the proper adaptation of the online store so as to facilitate the development of the business. This is a crucial issue when it comes to e-commerce, because of the fact that the properly designed sales platform gives the opportunity to achieve the success.
One can choose to keep the existing website, but also check whether it will be able to serve the selected market. It is important not only to be able to add different language versions, change the currency, and also to integrate the platform, e.g., with local delivery companies. Another option is to create a completely new website of the e-store, which will support only the foreign sales.
It is also very initial to take care of the visibility of the website in search engines. Translating product descriptions or the content is not enough for the site to be highly positioned.
Make sure that the translation of the page was made accurately.
The transcontinental online store must contain different language versions. The entire page should be translated along with all of the appearing notifications addressed to the customer at every stage of the purchasing process. Only the best shopping experience will lead to the finalisation of the order and will prompt the customer to purchase again.
International payment methods.
When deciding to create an international e-store, it is worth checking in advance which payment methods are preferably used on the market of interest.
According to the information on the website of the Polish Chamber of Electronic Economy, a large number of e-consumers world-wide declare that a particularly important factor of the store when it comes to making a purchase decision is the access to local payment methods. This provides fast and convenient transactions, and gives a sense of security, which is undoubtedly important in online sales.
Customers in the international market have different preferences concerning the choice of payment methods. DPD E-shopper Barometer research shows that the most popular way to execute transactions in Switzerland, Belgium, and France is the credit card, while in Portugal, Italy, and Ireland e-wallets are used, and the Dutch mostly choose local electronic payments iDEAL. Hungarians and Slovaks most often prefer the method of payment on delivery because of the sense of security, especially during first purchases. However, the payment on the delivery is problematic for sellers, because it involves a large number of uncollected parcels, which generates the costs of returning.
Adapting payment methods to the local market is not easy. Each of the countries where e-commerce is growing rapidly characterizes itself by a different approach of the consumers to undertake online payments. It is worth getting to know the preferences of the customers in the country with which we want to cooperate, e.g.:
- BRAZIL – is the most developed e-commerce market in South America, however, as many as 30% of the country's population do not even have a bank account. The most popular online payment method is a local credit card (Elo, Hipercard), by which about 80% of Brazilians make transactions in instalments. If one plans to enter this market, a significant option to offer customers is the Boleto cash payment method, which makes it possible to purchase both online and offline.
- INDIA - the fastest-growing e-commerce market. Online cross-border sales are 50% of the value of the Indian e-commerce market. The most popular online payment method is Netbanking, and the Unified Payments Interface (UPI) system offered on sales platforms in India.
- TURKEY - the third fastest-growing market for online sales in Europe. In this country, 70% of the population makes card payments through instalment programs, which allow consumers to spread out their expenses into monthly instalments for the everyday purchases. If one wants to open up to this market, then the customers from Turkey should definitely be allowed to pay with a loyalty card, which is extremely popular in this country.
- THE CZECH REPUBLIC – is one of the top three countries of the European Union with the greatest growth potential in the area of e-commerce. The turnover in e-commerce in the Czech Republic reaches $5 billion. In spite of the fact that the economy is dynamically developing, the most widely used method of online payments remains the payment on the delivery.
Logistics and delivery.
Meeting the expectations of the customers when it comes to delivery is one of the key factors of offering services on the international market. This fact determines the successful conducting and completing the transaction to a great extent.
It is though worth investing in fast delivery at a favourable price and providing the consumer with the opportunity to choose the most convenient delivery option. The distance and availability of parcel lockers, posts, or any other collection points are of great importance. International shipments can be carried out by international giants such as DHL, FedEx, or UPS.
However, it is also worth considering cooperation with local delivery companies, which often offer higher quality services and better knowledge of the infrastructure of a given country, e.g., Royal Mail in the UK, or Collissimo in France.
What can you offer to your customer?
- Courier shipment – the most popular form of delivery, both fast and convenient. There is a number of factors which facilitate the whole process, such as tracking and redirecting of the package, choosing the exact time and date of delivery. Depending on the location and distance the package needs to travel to reach the intended destination, the delivery companies offer to deliver parcels in the territory of Europe within 48 hours. The international shipment may be delivered even on the next day, but it is an additionally paid option of express delivery.
- Click&Collect – nothing but the pick-up at the collection point, which is now becoming increasingly popular. It can be a stationary store of the seller, a collection point of a delivery company, or a dedicated locker (e.g., parcel locker). This is an alternative method of delivery, which is appreciated mainly by residents of large cities, where the network of collection points is rather large. When choosing this type of service, one should pay attention to the number and location of points and their time availability.
- Postal delivery – in smaller towns and rural areas, this is the most frequently chosen method of delivery. In the international area, the post office offers a lot of innovative solutions, such as tracking the shipment, or network of parcel lockers and collection points available 24 hours a day. Express services and airmail enable reducing the delivery time.
- Fulfillment – a very good solution to start in a foreign location. It is an external company which specializes in comprehensive order processing. Fulfillment provides warehousing, packaging, shipping, and even handling of returns and complaints. Using of such a service accelerates the process of delivery, because of the fact that often the goods are located in a warehouse, which is close to the customer. Logistics operators are able to adapt the logistics model to the scale of business activities, product category, and specificity of a given market.
Returns and complaints
In this regard, the regulations placed on the website of the online store are crucial. They clearly define the conditions for returns and complaints of goods. One should be aware of the fact that the procedures for returns are different in the European Union countries, and outside of the Union. That is why, it is very important to inform the customer about it.
In the countries of the European Union, the buyer has 14 days to withdraw the contract without giving any reasons. This is a single-sided declaration, over which the entrepreneur has no influence. The consumer chooses the shipping method and bears its cost. On the other hand, the seller is obliged to return the value of the goods and delivery up to the amount of the least expensive offered option. It is worth taking care of easy and problem-free returns so that the customer remains faithful to the brand and makes a purchase again. As part of facilitating cooperation, it is worth attaching a return label to the package.
It happens that goods are defective, and the customer has the right to file a complaint on the basis of the warranty or guarantee. In the European Union, it shall be two years from the date of issue of the goods, or from the date of issuing of the guarantee.
The procedure of goods' return is completely different in countries outside the European Union. It requires more legalities, fees, and additional documents. It is good if all necessary formalities have been completed before the return of the goods is shipped.
The biggest problem concerning the return of goods in countries outside the European Union is determining of the status of such a parcel. The customs office may see it as an import and request payment of customs duties and VAT tax. It is possible to avoid these additional costs, but one needs to prepare for this in advance.
A key aspect is the application of the returning procedure. It allows to reimport the goods and exempt from fees (customs duties, goods and services tax, excise duties) on the basis of the Community Customs Code. However, in order to benefit from the cancellation of the above-mentioned costs, there is one important condition to be fulfilled - one must prove that the returned product is the same one that was exported. Therefore, the documents confirming the identification of the goods should be prepared before the shipment, e.g., an invoice with detailed specification. Additionally, an INF3 document may be attached, providing proof of conformity of the exported goods.
When entering the international market, it is worth remembering about an effective online marketing. Global, publicly available tools such as Google Ads campaigns, website positioning, or social media ads can be used for promotion. Regardless of the location of an online store, e-mail marketing will always work well.
An essential part of marketing activities is the analysis of results. Thanks to such actions, it is possible to check which channel has received the highest conversion and investing in which forms of promotion "pays out."
When deciding on international expansion, it is worth considering cooperation with a foreign advertising company, which has experience in a given market. The smallest elements, such as customizing the text of the advertisement to the local community, may determine the success of the advertising campaign.
Marketplace as a gate to new markets.
Marketplace platforms have become the easiest way to enter a foreign market. It is a place which aim is to connect buyers and sellers. Because of the presence of a large number of potential customers, many entrepreneurs tend to sell in this model. Despite the fact that in the marketplace there is a lot of anonymity, sellers see an opportunity to expand their business to international markets, increase the turnover, and easily access the new buyers.
The platform offers the seller:
- Ready-made infrastructure – which saves a lot of time and effort. An entrepreneur does not have to build or translate his own website, consider the categories, write regulations, or integrate payment systems.
- Returning customers – marketplace generates a lot of traffic and a customer database, but in order to stand out in this crowd and get customers, one needs to promote their products. One's focus should be on the positive feedback and perfect customer service, as well as well-positioning descriptions of products.
- Global promotion – the global reach provided by the marketplace increases its position on the global market through the high positioning on the search engine, innovative loyalty and subscription programs, and engaging advertising campaigns. All these elements ensure constant traffic on the page.
- Integration of the e-store with the marketplace platform – a great facilitation for online stores that want to enter foreign markets. This provides a more efficient customer service, faster flow of information, and simple import of the product database to the purchasing platform.
How to choose the right platform for international sales?
There is no doubt that the biggest advantage of marketplace in the international sales is its wide availability and simplicity. In addition to large reach, there are a couple of things to be taken into account:
- Suggested marketing and advertising tools
- Product categories
- Popularity of the platform among the consumers of the country in which one wants to sell
- Substantive and technical help (helpdesk)
- All costs connected with functioning of the e-store (both fixed and variable)
- Additional services, e.g., logistics (international fulfilment)
We will analyze your needs together and advise you on how to implement optimally your international e-commerce project. Make an appointment for a free consultation.
The dynamically developing e-commerce market gives many opportunities for the development, and the international online sales offer promising perspectives. To take a full advantage of this, one should follow simple rules. Carefully analyse their own business and determine the course of its development.
Is the success possible?
The answer is so simple as that - OF COURSE. There are a lot of widely known companies that have found themselves well in e-commerce and succeeded on international markets:
- LPP – Polish clothing company owning five widely-known brands: Reserved, Cropp, House, Mohito, and Sinsay. Collections of these brands are sold in nearly 40 countries both in online and stationary manner (over 2000 stores). The LPP group is present in six geographical areas – Central and Eastern Europe, the Baltic Sea Region, Eastern and Western Europe, South-Eastern Europe, and the Middle East.
- Zalando – German company with its registered office in Berlin. It is Europe’s biggest online-only fashion retailer offering fashion- and lifestyle-connected products in about 23 European countries.
- Alibaba Group – Chinese company which provides not only C2C, B2C, and B2B sales but also electronic payment services, or cloud computing services. In 2020, Alibaba Group was also rated as the fifth-largest artificial intelligence company operating in more than 200 countries.
- Amazon – American technology company, which is the most valuable brand world widely. It was established in 1994 as an online marketplace for books, and now consists of multiple subsidiaries such as Amazon Web Services, Amazon Prime Video, Amazon Music, Twitch, IMDb, Whole Foods Market, and many others.
- Rakuten Group – another company originating from Asia - Japan. It is a shop-centric marketplace, but not only. The company has more than 70 branches, which specializes in various themes, for instance, travel, digital content, banking, insurances, electronic payments, etc.
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