Global ecommerce is many things: cross-border commerce, borderless business, and international online retail.
International online retail, borderless trade, and cross-border commerce are all examples of global e-commerce. What it isn’t, though, is more significant than what it is.
International e-commerce is a necessity. It is not just one tactic among several. Globalization is essential.
Unfortunately, there are a lot of unanswered questions. What to invest in? Which nations offer the most favorable product-market fit? How do you entice buyers from outside your area? Which, among translation, currencies, payment methods, or something else entirely, is most crucial?
What is global commerce?
Selling products or services online to customers in other countries outside of geopolitical borders is known as global e-commerce.
Global e-commerce enables businesses to expand into other regions and draw in new customers, in contrast to local e-commerce, which only permits them to sell within their own country.
There are essentially no restrictions for merchants wishing to sell online thanks to the variety of ecommerce platforms, marketplaces, and digital solutions available, making it simpler than ever for companies to go global.
Although the coronavirus outbreak has presented some difficulties for merchants this year, eMarketer forecasts that global retail ecommerce sales will expand at a rate of 27.6% annually and reach $7 trillion in 2023.
Not to add that a number of national marketplaces saw double-digit growth in global ecommerce sales.
Internet sales increased by 36.7 percent in Latin America and 31.8 percent in North America.
However, in terms of national and regional rankings for online retail sales, China, the United States, and the United Kingdom come in first place. 58 percent of the worldwide e-commerce sector is controlled by just six companies: Taobao.com (15%) and TMall.com (14%) (both owned by the Alibaba Group), Amazon (13%), JD.com (9%), Pinduoduo (4%), and eBay (2 percent ). Three percent. Only six other well-known retailers, including Apple, VIP.com, Sunning.com, Rakuten, Walmart, and Shopee, have less than 5% of the market.
Related Reading: Contextual Commerce – The Future in Digital-Centric Ecommerce
How to establish a global commerce strategy?
Fortunately, e-commerce is a terrific way for established firms to gauge the market before deciding to open a new physical site in a different nation.
But before you fully commit to your international growth, keep in mind that every nation is different and needs a different approach.
Here are a few important things to think about when deciding whether or not your e-commerce company is prepared to go global.
Even while you won’t need to build a new team from scratch or hire new personnel, you still need to make sure that your current resources can support global expansion.
Team members should be willing to learn new skills or have international experience.
As an alternative, it might be advantageous to have separate teams and budgets for domestic and overseas operations.
Product demand vs global supply: By employing SEO tools to track search activity, retailers can learn how frequently foreign customers visit their website and which products they purchase most frequently in their home countries.
Growth scope: It will be much simpler to take actual actions toward success if you clearly define the scope of your expansion. Decide what your business needs are to match the demands of your new market, such as whether you need to build a new physical location or only alter the look of your website or payment options.
How to create and integrate a global commerce platform?
It’s time to start modifying your e-commerce platform to suit the requirements of your new international audience now that you’ve defined your international strategy.
Make sure you’re giving your online store the time and attention it deserves. Every international market requires its own planning and consideration.
Here we’ll highlight four areas to consider when launching your business abroad.
Related Reading: Shoppable Media – What is it and how it leverages social commerce
Harvard Business Review asserts that pricing perceptions are just as significant as actual prices.
Even though their rates are the same as those of their competitors, marketers may employ strategies to convince customers that their pricing is lower than the industry standard.
Prices with a zero at the end, like $10.00, do better in high-context markets like China, India, Brazil, and Argentina, whereas prices with a nine at the end, like $9.99, do better in low-context markets like the United States, Australia, and Norway.
Despite how simple it may seem, currency conversion is another difficulty to take into account.
Many international shops use a fixed rate in the face of changing exchange rates, which helps to maintain pricing consistency. Make sure that prices are shown in the local currency; otherwise, customers may abandon their shopping carts and conversion rates may suffer.
According to Statista, credit cards and digital/mobile wallets will share the top spot among online payment methods in the United States in 2020, each handling 30% of all transactions.
However, the findings are somewhat different when examining payment methods on a global level.
In 2023, digital and mobile wallets (like Apple Pay and PayPal) will handle 52% of all e-commerce transactions globally, far outpacing credit cards, which will only handle 23% of transactions.
This suggests that local customer payment preferences vary, so you shouldn’t assume that foreign customers will always pay with a credit card.
For instance, 86 percent of all payments are made in cash in Mexico, whereas only 15 percent of people in Southeast Asia use credit or debit cards, and more than a third have no bank accounts.
Even though it’s simple to overlook something like how people pay, these subtle differences could mean the difference between making a sale and turning away a potential client.
Make sure you’re catering to the preferences of your target audience by doing some research rather than relying solely on credit cards.
2. Maintain a high level of client service.
You shouldn’t disregard your consumers just because they live in another nation. Customer service is just as crucial in global marketplaces as it is in domestic ones.
Particularly when it comes to return and exchange policies, it is simple to assume that firms in other nations run similarly to those in the United States.
While many American retailers offer a no-questions-asked return policy, many French customers think that all purchases are final, while many Japanese retailers forbid returns for nonsensical reasons.
As a result, as you grow internationally, you’ll need to consider how to satisfy each nation’s return policy in light of the needs of the market.
3. Shipping and logistics.
The bulk of difficulties faced by business owners in international e-commerce, according to Statista, revolve around shipping and logistics:
– Customs of navigation: 44.5 percent
– 37% of all logistics are cross-border operations.
– Returns on international investments of 33.5%
– Your time is used by managing delivery expectations at 34.5 percent.
– 27.5 percent of deliveries are tracked.
On the other hand, adopting new technologies and multi-carrier software platforms can assist retailers in managing these logistical challenges more effectively and easily.
Offering customers a variety of delivery alternatives and up-front pricing is crucial, especially when selling overseas.
Businesses who provide a premium delivery option, such as rapid shipping, grow 60% faster than the average, according to a DHL survey from 2021.
Even while offering merely a basic home delivery service might be the most practical choice, it might be worthwhile to broaden your horizons.
What are some global commerce trends?
The epidemic’s detrimental effects on the ecommerce sector are not surprising. Stay-at-home orders forced merchants to alter their business models, which resulted in a significant shift in global ecommerce during the past two years. Many of the trends seem to be here to stay.
1. Supply chain resilience
One of COVID-19’s most important lessons was the effect on global supply networks and the effects on global markets.
Businesses were devastated by the outbreak, which made them reevaluate their processes—which had previously relied on low-cost suppliers and little inventories—and begin developing supply chain resilience.
Retailers can improve their capacity to respond swiftly to change and minimize future risk by stabilizing their supply networks.
According to a Deloitte study, retailers should take the initiative to improve supplier relationships, enhance digitization, invest in omnichannel distribution, and adopt “advanced technologies such as predictive analytics, machine learning, and AI.”
2. Online shopping outside borders.
One of the most crucial findings from COVID-19 was the effect on global supply networks and the effects on global markets.
Businesses were devastated by the outbreak, which made them reevaluate their processes—which had previously relied on inexpensive products and little inventory—and begin developing supply chain resilience.
Retailers can increase their capacity to respond swiftly to change and minimize future risk by stabilizing their supply networks.
A Deloitte analysis suggests that retailers may take the initiative by strengthening supplier relationships, accelerating digitization, investing in omnichannel distribution, and embracing “new technologies such as predictive analytics, machine learning, and AI.”
Related Reading: Ecommerce Analytics: Leveraging Data To Unlock Online Sales
3. China and APAC market expansion.
Due to its size and enormous purchasing power, China presents a significant income opportunity for e-commerce businesses seeking to go globally.
By 2023, it is anticipated that retail ecommerce sales in the Asia-Pacific (APAC) region would surpass those in the rest of the world due to urbanization, technological improvements, and a growing population.
With 33.3 percent of all digital purchases and $2.779 trillion in revenues this year, China dominated the global e-commerce business.
China will also be the first market to ever do more than half of its retail sales online (52.1 percent ).
Of course, it’s not always easy to enter the Chinese market. Being in competition with Alibaba, which has 80% of the Chinese e-commerce market, may cause many businesses to be concerned (and generates more sales than both eBay and Amazon combined).
Retailers can enter the Chinese market using a few key strategies despite the severe entrance restrictions:
– Work along with well-known local vendors.
– To handle marketing, engineering, and sales, establish a team in China.
– Create a presence for yourself online.
– Businesses can set up shop on regional third-party marketplaces or well-known ecommerce sites even though social media and advertising content on websites like Facebook and Instagram are prohibited in China.
4. Language that is specific to the area.
Although it may seem obvious, having your e-commerce site available in the language of your target market can make or destroy your company.
Assuming that all of your customers speak English is too risky, given that 40% of consumers won’t make a purchase from a website if the material is in a foreign language.
Localizing your website’s language will not only improve your ability to interact with customers, but it may also help your website rank higher in search engines, which will result in more people seeing your products and more opportunities for sales.
While your ultimate goal should be to translate your entire website into the language of your target audience, there are a few elements of the shopping experience that are crucial.
The checkout process, product description pages, and reviews were the most significant sections in customers’ native languages, according to Flow’s Global Research Report.
The Final Word on Global Commerce
As technology advances and our interconnected world gets smaller and smaller, going global will become more necessary than optional.
Thankfully, innovations like Kilowott are already helping businesses of all kinds expand overseas and significantly expand their operations.
The phrase “global ecommerce” may be intimidating to you if you’re still a small, local business, but with the aid of this book, you’ll be better able to understand what you can do to expand your company into new markets.
Kilowott empowers companies from across the retail and ecommerce sector, to offer everything from online webstores to tracking solutions that can bolster online selling of your products.
Need help? Let’s talk