What Online Retailers Must Know Before Entering New International Markets
Merchants have an increasing appetite for international expansion through their e-commerce channels. Late last year, Digital River commissioned Forrester Consulting to survey 130 executives and decision-makers at branded manufacturers in the U.S. and U.K. We wanted to know more about how companies are thinking about international expansion. The results of the survey were clear: More than ever before, companies are focused on geographic expansion in new online markets, and they have aggressive expectations for speed to market and profitability.
Here are a list of tips for companies that are on the brink of their first international expansion project:
1. Begin where you are. Forrester predicts that the global online market will double by 2018, and forecasts the fastest growth in China and elsewhere in Asia, Latin and South America. That's where most companies are rushing to establish e-commerce operations first. However, before you hurry to enter today's emerging digital markets, think about expanding your online footprint in markets where you already have a presence through traditional retail channels. By starting from where you already are, you'll develop your skills in international online expansion in a market where the barriers to entry are lower, with an existing customer base, brand recognition and some comfort with the local retail environment.
2. Calibrate your expectations to your investment. Two-thirds of the leaders in the Forrester study said expanding into new international markets was a high priority, or even "critical," within the next year. That kind of urgency is more than justified by the vigorous growth of e-commerce worldwide. To be successful in new markets, however, retailers must back up their eagerness with careful investment. After all, entering a new digital market means much more than translating your website into a new language. It means ensuring the right e-commerce experience for the specific market you're entering. Investing in deep local expertise is crucial to successfully navigating the technological, legal, regulatory and cultural complexities of a new international market.
Eric Christensen is Chief Payment Officer/Vice President of Product at Digital River, a completely integrated solution for all the back-office functions of ecommerce. Digital River enables businesses to sell across the world with a single connection to the platform of your choice.