Consumers are no longer limited to buying from shops in their local vicinity. Global ecommerce has made it possible for them to buy almost anything from anywhere, presenting an exciting opportunity for brands all over the world.
According to Insider Intelligence, the global ecommerce market hit $5.7 trillion in 2022, and a study by PayPal revealed that 57% of consumers currently shop internationally.
But, while expanding into international markets can present many unique opportunities to ecommerce brands, it can also create a fresh set of challenges. From logistics to pricing, payment options, and cultural differences, it can be tricky trying to figure out if global expansion is right for you.
This post will examine the concept of international ecommerce and explore the biggest challenges and opportunities to help you make the best choices for the greatest impact.
The Challenges of Expanding Into International Markets
Going global isn’t as simple as opening your checkout to new locations. Every location is different in terms of preferred payment options, currencies, language, cultural barriers, and logistics. Here are some of the most common challenges ecommerce brands face when looking to expand.
Cultural and Language Barriers
Just because a product sells well in your existing market doesn’t mean it’ll thrive somewhere else. For example, if your bestseller is a product related to a pop culture show in the U.K. and you plan to take it abroad to Europe, Latin America, or India, it might not have the same impact.
Language barriers are also a huge sticking point. Translating your entire website and product line is no easy task — especially if you’re planning to venture into multiple regions that speak various dialects.
Image Source: Uniqlo
Image Source: Uniqlo
Uniqlo shares different collections on its homepage depending on where the consumer is based.
Regulatory and Legal Requirements
Different markets have different rules when it comes to selling online. It’s crucial that you remain compliant in every market you cater to, which can quickly become a major headache if you’re planning to target several different regions.
Logistics and Shipping
Shipping, customs, and fulfillment suddenly become much more difficult when dealing with multiple borders, different regulations, and thousands of miles between your warehouse and the end customer.
According to Statista, the majority of challenges ecommerce owners face in the global ecommerce market are related to shipping and logistics, including:
- Navigating customs (44.5%)
- Cross-border logistics (37%)
- Cross-border returns (33.5%)
- Managing delivery expectations (34.5%)
- Tracking deliveries (27.5%)
Payment and Currency Considerations
Different markets prefer different payment methods. While the U.S. might like paying with a credit card, other markets might like buy now, pay later (BNPL) schemes, direct debit payments, or an app like PayPal. Trying to juggle the various options alongside multiple currencies can get complicated fast.
Image Source: Lululemon
The U.K. Lululemon site offers a BNPL payment option via Klarna, but the Philippines version doesn’t.
Image Source: Lululemon
Things To Consider Before Entering a New International Market
Before zeroing in on the predominant opportunities in global ecommerce, mull over these considerations to determine whether your brand is ready for international selling.
1. The Scope of Expansion
Consider the markets you plan to enter, which will determine the scope of your expansion. It’s a lot easier to start small and focus on one or two new markets instead of trying to penetrate multiple markets at once.
Start by outlining your business needs. Do you need to open brick-and-mortar stores in your new destinations? Do you need to translate your entire website? Do you need to rename your product line? Make a checklist of what you need to do to get there.
2. The Relevancy of Your Product and Brand
When The Coca-Cola Company launched in China, it had to change its name after realizing the direct translation was “bite the wax tadpole.” It rebranded as Kekoukele — not quite the same, but the new translation of “happiness in the mouth” was much more fitting. (As lore-ish as this may sound, Snopes offers some backing.)
Consider how relevant your product, product name, and brand are in your chosen markets, and identify any potential branding issues.
3. The Existing Market and Potential Competitors
It will be much harder to gain traction and make sales if there’s already a popular brand dominating your niche in your chosen market. Consider if it’s worth your time trying to beat an already stiff competition or whether you should focus your efforts on other markets where there’s less competition.
Be wary of venturing too far in the other direction, though — if there are no competitors, it could indicate that there’s not much need for your product.
4. Pricing and Profitability
Consumers perceive pricing differently in different parts of the world. While some markets might be happy to pay more than $100 for a pair of shoes, other markets might balk at the prospect. Research your chosen markets to find out the average price point of your products and figure out whether your gross margins will still be big enough.
5. Shipping and Supply Chain Issues
International shipping is a mammoth task. Not only do you have to rely on carriers in different countries, but you also have to wrestle with different border rules and regulations. Consider how you’ll remove as much friction as possible from the process and find out if there are any taxes that might make it impossible to sell your products in specific markets.
6. Localized vs. Cross-Border Logistics
Decide whether you want to fulfill orders locally or cross-border. The former requires you to stock inventory in the regions you plan on shipping to, while the latter relies on shipping products across borders and facing local taxes, customs, and regulations.
7. Internal Operations
Your existing team might be ample enough for your current needs, but what will happen when you open up to new markets? Consider whether you’ll need to hire entirely new teams in your chosen markets or whether your existing resources can handle your international expansion on their own.
Opportunities for Ecommerce Brands in Emerging Markets
The fast growth of global ecommerce has created a handful of emerging markets. Here are some of the biggest opportunities at the moment:
- Latin America (including Peru, Brazil, Argentina, Chile, Colombia, and Mexico): According to Statista, the region saw a 22.4% increase in ecommerce sales between 2021 and 2022, taking the market from $85 billion to $104 billion.
- India: Insider Intelligence found that India was one of the top five fastest-growing countries in the world and saw a 25.5% growth in ecommerce sales in 2022.
- U.K.: Statista shows that the U.K. ecommerce market is set to increase by 42.88% over the next year.
- Asia-Pacific: Research by ChannelAdvisor revealed that seven of the top 10 countries for ecommerce sales growth in 2023 are in Asia-Pacific, including The Philippines, Malaysia, and Thailand.
- New Zealand: A New Zealand Post report found that overseas ecommerce is growing faster than domestic ecommerce in New Zealand, with offshore transactions up by 37%.
How to Effectively Tap Into Global Ecommerce and International Opportunities
Now that you’re aware of the challenges and potential opportunities, take a look at how you can effectively tap into the global ecommerce market.
Find the Right Market for You
It can be tempting to dive straight into the market with the biggest opportunity, but if it’s not a good fit for your brand, it can be detrimental to your growth and bottom line. Start by tracking search activity on your existing site to discover how often customers visit your site from other countries, where they’re based, and what products they’re most interested in.
Map Your Payment Options to Your Chosen Markets
Identify preferred payment options in your new markets and incorporate them into the checkout. You’ll need a credit and debit card processor, but also consider mobile wallet options and a BNPL scheme. JP Morgan found that Mexican consumers will often order products via mobile and pay in cash in their local convenience stores, while New Zealand has seen a sharp increase in the number of BNPL services.
Activate Mobile Shopping
The number of consumers choosing to shop via their phones is on the rise. Make sure your online store is easy to navigate from a handheld device and can be accessed from your chosen markets.
Build Out a Multi-Channel Marketing Strategy
Your first port of call will be marketing your products in your new locations. But, while you might have seen success running Instagram ads in the U.S., you might find that this method isn’t as successful in China or India.
Research which platforms are most prominent in your chosen markets and create new strategies that include those. For example, Statista shows that live shopping has soared in popularity in China, with the live commerce market expected to increase from $2.27 billion in 2021 to $4.92 billion this year.
Create Localized Product Pages
A study by Flow.io found that over two-thirds of English-speaking shoppers said they wouldn’t purchase from a site that wasn’t in English. Respondents specifically stated that the product descriptions (67%), product reviews (63%), and the checkout process (63%) should all be in their local language.
But creating localized product pages isn’t just about translating the text. Also, think about using product photos depicting the people and culture within the market and incorporating relevant references to pop culture or local trends.
Image Source: Nike
The Nike website looks very different for Mexican consumers than it does for U.K. consumers.
Image Source: Nike
Read Up on Compliance Laws
It’s crucial that you remain compliant in the markets you’re selling to. Before you start, make sure you’re well-versed in the local customs and logistics laws. It can help to speak to a local tax advisor or expert to find out exactly what regulations you need to abide by and how you can ensure you stay on the right side of the law.
Go Global, Think Local
Expanding into international markets has huge potential for ecommerce brands. Once you’ve tackled the challenges and put together a detailed expansion plan, you can start putting the steps in place to reach your new chosen markets.
The best tip: go global, but think local. That means localizing your website to individual markets, publishing culturally-relevant product pages, and creating marketing strategies that align with the wants and needs of each market.
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