International Marketplaces: The Fast Track to Driving International Growth
Looking for a low-risk, high-reward way to ramp up your international e-commerce sales? International marketplaces are an increasingly popular market entry strategy for internationally ambitious retailers — especially small to midsize specialty brands.
Not surprisingly, options are quickly expanding beyond the tried-and-true marketplaces operated by global giants Rakuten, eBay and Amazon.com. Smaller in-country marketplaces and localized online shopping malls also let online retailers test-drive products and gauge the popularity of their brands in new markets.
International marketplaces operate like a pit crew trained to get your e-commerce business tuned up for international selling. They can help online brands anticipate speed bumps and avoid cross-border potholes.
The rewards of international e-commerce are real, but so too are the obstacles. Getting a cut of the $1 trillion-plus global e-commerce market means navigating the twists and turns associated with legal, cultural and regulatory realities. Operational issues range from pricing in local currencies and accepting local payments to providing accurate landed costs, international shipping options and customer service.
Marketplaces help you steer clear of hazards by localizing your international reach. This is especially true in Latin America, where Forrester says cross-border trade will grow 30 percent annually to $220 billion by 2017, accounting for almost 15 percent of all e-commerce activity.
"G-localization" is helping online brands connect with the next wave of international online shoppers, says Federico Torres, co-founder of Traetelo, which operates cross-border marketplaces for the top 10 countries in Latin America. "The new ‘going global’ is being local," says Torres, especially for online retailers targeting the rising global middle class of online shoppers. When it comes to reaching Latin American shoppers, who now make 30 percent of their online purchases from U.S. e-commerce sites, Torres suggests three "g-localization" priorities — language, payments and cross-border shipping.
Ninety percent of Latin Americans don't speak English. Selling through marketplaces like Traetelo's, Mercado Libre and PuntoMio, another cross-border online mall catering to Latin America, is cheaper and quicker than building and maintaining dedicated Portuguese and Spanish-language sites. Sixty percent of Latin Americans prefer localized payment options that don't involve credit cards; options such as paying with cash, via installments or Brazil's Boleto Bancario. Over 75 percent will abandon an online transaction because they're unsure that they're being charged the accurate duties, tariffs and taxes.
Localization can also turbo-charge your international promotions. A.J. Hernandez of SkyShop Logistics, which operates Punto Mio, explains how to avoid surprises and ensure positive shopping experiences. "Product promotions work best when presented in the home language and when total costs are clearly stated in the offers."
Retailers selling through marketplaces can boost conversion rates by lowering international shipping (via consolidated orders), offering multiple express shipping options and guaranteeing landed costs.
Localized marketplaces help sellers racing into international markets avoid many of the caution flags and pit stops that flatten growth curves and throttle back the best of intentions. Before taking the wheel yourself, turbo-charge your international sales by partnering with drivers that know the road ahead.
For more information on this topic, be sure to register for Retail Online Integration's upcoming webinar, Cross-Border Trade: Where to Begin and Best Practices for Driving E-Commerce Sales.