International E-Commerce Heating Up: Where To Go & What You Need To Know To Grow

Not so long ago in 2005, less than 50% of online users were located in developing markets. Fast-forward to today, and you’ll find that that number is estimated to reach 75% by the year 2015 (according to a recent Forrester study, Key Trends And Best Practices Selling Globally Via The Affiliate Channel).

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As an online marketer, you know this shift represents significant opportunities to reach new customers in burgeoning markets. So you may be wondering:

• Which countries show the most promise, and why?
• How do I successfully establish an online presence there?

We’ll tackle those questions here.

Drivers Of Global Ecommerce Growth

Right now, there are the eight countries that are particularly ripe for significant ecommerce growth in the coming years: Australia, Canada, China, Brazil, France, Germany, Japan, the United Kingdom and the United States.

Each country listed above has its own specific reasons why it’s poised for growth, but listed below e are some factors that are common to many of them.

Factors Behind Global Growth

Improving Infrastructure: With broadband access available to 94% of the population, Americans are accustomed to high-speed Internet access — but it’s not a given in other countries. Many Aussies, for example, are still hampered by slow Internet connections. However, the National Broadband Network will change this over the next several years by ensuring no business or home in Australia is without a high-speed connection. And Australia is just one example of how technology will drive new ecommerce opportunities. As more countries improve their IT infrastructures, we’ll see an increase in online shopping.

Brand & International Cachet: Consumers are attracted to big-name global brands as well as the cachet of buying a product from another country. The Forrester study noted that consumers tend to place a higher value on products from another country.

Consumer Demand: As the world continues to flatten, demand for international products is increasing. Here are some interesting data points along those lines:

• The aforementioned Forrester study conducted a survey of more than 2,500 online shoppers throughout the countries cited above as well as the United States. Of those consumers, 68% reported that in the past 12 months, they purchased an item online from a company located outside their home country.
• Of that 68%, three times as many shoppers plan to increase their percentage of ecommerce imports than those who plan to decrease it. What’s more, this ratio increases 9:1 among Brazilian shoppers.
• Breaking these numbers down even further, 75% of UK shoppers, 78% of Australian shoppers and nearly 85% of Canadian shoppers have purchased goods from another country.

5 Ways To Fail In New Markets

Now that you know which countries are most ripe for growth, you need to think about your strategy for entering new markets. Here are five of the most common stumbling blocks that result in failed expansion overseas.

1. Replicating your U.S. business model. A lot of companies will tweak their U.S. processes to accommodate local laws and business practices. Unfortunately, this generally isn’t enough to sustain your presence in a new market.
2. Assuming your brand is recognized overseas. Your products may be in the homes of every American consumer — but you can’t assume your local brand recognition will carry over into new countries.
3. Unrealistic expectations. Even if you had great success right out of the gate in the U.S., keep in mind that it takes time to establish a presence and grow your business in a new country. With this in mind, avoid one-to-one comparisons in your progress. In all likelihood, you’re setting up shop in a smaller country and targeting a smaller group of consumers.
4. Choosing the wrong partners. Maybe you put together an awesome domestic team that conducted exhaustive research on the region (perhaps to the point where you now know more about the new market than the locals) and created a killer business strategy based on their findings and insights. But these efforts may be all for naught if your local partners can’t properly execute your strategy.
5. Minimal effort in creating a country-specific website. If you want to sell your goods online, you need to take into consideration that a translated website may not be enough. The local language, expressions and overall way of communicating must be reflected on the local site.

3 Strategies To Avoid Failure

Now that you have the answers to those top two questions about entering new countries, here are three “must haves” when it comes to achieving success in new markets.

1. Leverage the halo effect. As cited above, consumers value products that come from another country. Capitalize on this fact. Just be careful not to compromise your brand or the quality of your products by overcharging or delivering a less than stellar customer experience from start to finish.

2. Create both a local site and a global English language site. While local language sites tend to have more success, a lot of ecommerce companies offer both. The reason for this is that the global English site demonstrates a bigger presence of an established company and reinforces the required trust and security of the transaction while also giving consumers an option. As a bonus, having a global site will make expanding into additional foreign markets that much easier.

3. Tap into the performance marketing channel. Since this is a pay-for-performance business model, ecommerce companies only pay when a sale is made. The key is to work with a global affiliate marketing network with strong local affiliate partners. This way, you’ll be assured of consistency in your campaigns throughout different countries while accommodating the interests of the locals.
   

If you’d like more information about online consumer shopping behaviors in those high-growth countries and the role of affiliate marketing in supporting cross-border commerce, you can download the Forrester report here.