The benefits of global ecommerce expansion are obvious: Tap into new markets and revenue streams, increase brand awareness, and boost your bottom line. While it’s tempting to go full steam ahead to capture your global potential, it’s important to be strategic. Building a detailed plan will help you minimize costs and focus on those areas that will make the biggest impact for your business.
Before joining Salesforce as a success architect senior director, I managed the direct-to-consumer channels for two fast-growing U.S.–based companies. Through trial and error, I learned how to map a successful global commerce strategy.
Although every company is different, I’ve found there are five key steps to international commerce success. Let’s examine each.
Get ready for ecommerce success
Global expansion can change your business in unexpected ways. Here’s how to prepare for new initiatives and find success.
1. Identify international market potential
It’s easy to find digital transaction volume in a given country, but that’s just the starting point. Look deeper: Compare that volume to population size. Check if the digital and logistics capabilities can support more growth. Examine the geopolitical environment to make sure conditions are right. This will ensure that you’re using your resources to establish your business in markets that will deliver the best return on investment.
It’s also critical to understand how well prospective consumers know your brand. If your brand is a relative unknown, factor in the cost, time, and effort of building awareness.
This exercise will help determine the markets that will drive the most success for your business:
- Search for consumers abroad who know your brand.
- Capture as many data points as possible.
- Dig into web tracking data to learn where people browse your site.
- If you have nontransactional 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 international ecommerce
A global ecommerce expansion to any country comes with challenges and complexities. Understanding them from the get-go will help you prepare for growth and keep costs to a minimum as you expand. For example, a U.S. retailer looking to expand into Canada (with a forecasted $33 billion in ecommerce sales in 2024) needs to consider custom, duty, and taxes. Taxes can be very complex depending on your brand’s legal status in certain provinces. Similarly, companies in China face challenges that include performance, data residency compliance, and difficulty integrating with local Chinese platforms.
In my experience, it’s most effective to first target a small number of strategic, high-potential-for-growth countries. Fill in remaining markets with a verified third-party international fulfillment service that can plug into your own checkout experience. It’s best if the partner you choose can manage all back-end fulfillment on your behalf. Its capabilities should include payments, fulfillment, duties, customs, and tax compliance, and it should provide a low-risk option for testing across many markets. If not, these are costs — and risks — that your teams will need to manage on its own.
3. Localize by market
Once you decide there’s a market opportunity, immerse yourself in the consumers. Delivering a localized experience goes far beyond site translation, although even that has nuances. A “sweater” in the U.S. is a “jumper” in the U.K., for example.
Language is the most important consideration for localization. Poor translation can be a major hindrance to conversion on foreign sites. Other factors include different address formats and varied checkout preferences.
Usability also plays a role in creating a localized experience that resonates with customers. Consider using separate product photography featuring local models or up close shots of stitching and labels.
Identifying popular social channels in your target region is another key factor. For example, social media has been the main channel for ecommerce in China for several years, but the platforms commonly used in China are not available in the U.S. With social commerce on the rise, it’s important to understand the intricacies of social platforms in different regions.
Finally, campaigns may need a local makeover, too. Some countries start end-of-season sales earlier than others. And weather conditions in different hemispheres trigger the need for different clothing.
Your localization checklist
- Decide on your approach for campaigns and promotions. Is it one-size-fits-all or country-specific?
- Consider your product catalog and inventory mix. Does one central warehouse sell the same products across all targeted countries or are there exclusive products per country?
- Develop your pricing strategy. Will the item price be the same across regions?
- Determine the shape and size of your teams. Will you have individual teams in the respective countries? What will be their size and level of web management skills?
- Identify social media platforms and trends prevalent in the region you’re targeting.
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4. Determine payment methods
Payment strategies and taxes are two of the most complex factors affecting a global ecommerce expansion. Tackle these locally based on legislation, diversity of payment types, and consumer preferences. Analyze your target market to understand and offer the best payment mix. For example, many consumers in the Latin American market use a payment system called DineroMail. After making a purchase, shoppers 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.
To navigate various payment strategies, you’ll want to work with an ecommerce platform that can natively support payment and currency plug-ins from all 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 also need to consider capture and settle 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 revenue in your home country.
In some countries, things get more complex due to internet and consumer regulations. In others, you may face volatile currency. If you’re going to price in local currency but want to capitalize in your home market, watch exchange rates carefully. You may even consider evaluating risks and potential insurance options.
On top of that, you may need to establish a local bank account abroad. Be sure to complete the entire application process as early as possible so all systems are in place when your site is ready to launch.
5. Activate and launch
Brands may want to use a minimum viable product approach to fast-track a global ecommerce expansion. Companies might consider working with existing vendors as a low-risk option to test markets. Before contracting with new partners, check existing third-party logistics providers (3PL). A payment gateway in Europe may also support payments in Latin America. Run a full assessment with all vendors to determine their capabilities.
Make sure all 3PLs meet 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.
Get ready for what’s next in international commerce
Expanding into new markets is a great way for your business to grow your revenue and customer base. As I discovered in my previous roles, a flexible, scalable commerce platform is key to finding success in new regions across the globe. Your ecommerce solution should make it easy to create and manage local site instances, as well as deploy localized marketing messages and promotions, global content strategies, custom price lists, and more. This is the beating heart of any successful international ecommerce approach.
On the road to international expansion?
Don’t leave home without our map to global commerce success. Check out our tips and best practices.