A few years ago, taking a traditional business international required significant resources.
- On-the-ground prospecting in the target country.
- Analysis of viable strategies for entering each target market.
- Finding the best-suited models: sales branch, local distributor, joint venture, export, etc.
Today, online businesses have made some of the old considerations obsolete and demand new ones. The difference is that now there are no longer major barriers to planning an expansion or internationalization process.
Much of this work can be done digitally, avoiding major costs and increasing effectiveness. Even so, it’s very important to have a strategy that’s been developed, defined and validated in advance to reduce risk and improve the chances of excellent results.
There’s no single internationalization strategy that guarantees success, since it depends on many factors that vary by company and sector: product type, demand, market maturity, competition, customer profile, and the budget set aside for the process.
Here are some key points to keep in mind throughout the process of taking our business international.
Target market analysis
Carry out market research to assess potential, maturity, saturation, etc.
If you lack the resources and time for a detailed study, it’s important to do a quick survey and get up-to-date industry reports and statistics.
Keep in mind that we’ll be reaching customers with different cultures, languages and ways of thinking and interacting, and we need to understand and adapt to them.
Online-offline competitor research (benchmarking)
Not just pricing policy, but also product, customer service, delivery times and costs, returns, etc. The aim is to stand out by adding value for customers.
Initial test
An interesting option before launching sales in another country is to test selling products on one or more marketplaces. That way we don’t invest in building or adapting a platform for the new market, but we do find out whether our products appeal to or suit that market.
Step by step
It’s important to plan based on available resources so things are done as well as possible, without trying to enter several markets at once.
I also strongly recommend starting an expansion process only once you’ve mastered your home market. Often, trying to take on too much makes us lose the focus and positioning we worked so hard to achieve. It’s better to consolidate and be well positioned at home before making the leap to international markets.
Logistics, customs, legal
Logistics is key to competing on price and delivery times. It’s important to choose the right logistics providers for each market. Customs and legal restrictions can also create clear barriers to entering a new market.
It’s important to analyze and understand these aspects, as they’ll affect the quality and price of our service. In more protectionist markets a local partner is mandatory, with everything that entails, although this sometimes turns out to be a plus. A local partner can bring deep knowledge of the market and its rules of the game.
Once the basics have been analyzed and the decision made to enter a new market, it’s important to build or adapt our eCommerce platform.
To do this, we need to consider:
Content translation and localization
Content must be adapted to the local language. It’s best to work with native translators from the target country to ensure high quality.
Consumers notice literal translations, and it creates some distrust. Also bear in mind that all content should be optimized to rank organically for the most important keywords in that market and attract quality traffic that converts into sales.
Catalog review and adaptation
Not all markets work the same way in terms of taste and consumption. It’s very important to analyze and tailor the product range to users’ tastes and preferences.
Currency
If the official currency differs from the seller’s home currency, it’s very important to show products in each country’s currency.
Our eCommerce platform should support multiple currencies, letting us set prices in each currency for each country. That way we can use rounding and promotions tailored to each market.
Pricing
This ties in with the previous point: being able to set different prices and promotions for each country.
Payment methods
Analyze which payment methods work in each country.
Not all markets are used to the same methods. You need a broad offering tailored to each market.
Taxes
Consider not only customs duties but also the domestic taxes that apply to selling our product in that market. Overlooking this can make our final price uncompetitive or hurt profitability due to unfamiliarity with or misreading of the tax rules.
Customer service
We need qualified staff who are fluent in the local language and know the company’s products and services in detail.
This is a major asset that helps make the shopping experience as good as possible.
Domain strategy
Decide whether to use the same (international) domain or a local domain in each country where we want to sell. This affects not only the eCommerce platform but also SEO and the effort required in our online marketing strategy.
Logistics
Here too it’s very important to adapt the service to local consumer habits. For example, some countries prefer pickup points, as they give customers great flexibility to collect orders when it suits them.
Online marketing strategy
It’s vital to define the investment available for that market so you can decide which actions to implement to drive traffic and generate sales.
Other useful facts to keep in mind
In Spain, eCommerce businesses with international reach are mainly interested in the so-called “big three”: the UK, Germany and France. The reason is that these 3 countries account for nearly 60% of European B2C commerce. France is growing fastest, and Portugal and Italy have great potential.
That’s why, for a Spanish eCommerce business, it makes a lot of sense to start selling in European countries, where there’s more knowledge, control and shared rules and laws.
Another important fact is that in most European countries, more than 50% of sales go through online stores based in other EU countries.
On top of that, the top countries buying online from Spanish eCommerce stores are Germany, France, the UK, Italy and the United States, which are also the leading eCommerce markets with strong growth prospects.
At the end of 2015 Spain’s online shopper market stood at 17 million users, compared with 250 million in Europe and nearly 350 million in China. This gives an idea of the state and potential of eCommerce in these markets. When it comes to China, though, bear in mind it’s a market with huge potential but special rules and significant entry barriers. At Trilogi (TLG Commerce) we have offices in Barcelona, Hong Kong, Beijing and Shanghai, from where we can advise you on planning your entry into Asia.
If you’re thinking of taking the next step and conquering new markets, don’t hesitate to contact us.
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