Commerce,

Global Ecommerce Strategies You Cannot Ignore

Expanding an ecommerce into the global market require lots of planning ahead. Here are the essential strategies to succeed in this journey.

Amanda Pofahl

Latin American Market Expert
December 12 2017 · 9 min read
   

Global e-commerce strategies are complex, often easily misjudged and have a range of moving parts that need to synchronize effectively. When expanding your business to a global setting, you need to be mindful of the nature of business that occurs in these markets.

Along with varying customs, price-points, and marketing strategies, entering new markets requires a bottom-up approach. With the rise of mobile, and cheaper data, global expansion is a core component of every ecommerce business plan in 2018.

While entering mature markets, it’s important to provide a product or service that adds value to the customer!

As local players can create copy-cat versions of what you have to offer, you need to be extra careful that you’re not giving away too much information to local manufacturers, suppliers and retail chains.

Cross-border ecommerce relies heavily on either price and perfection, and local markets can beat you on price any day of the week. In fact, some of these players might even have stronger relationships with local online ecommerce sites, due to the volume of business and local market understanding.

Negotiating with local ecommerce marketplaces might also pose a significant challenge, as new entrants are often asked to prove their weight, before being given online shelf space. Typically, it’s up to the ecommerce manager to drive traffic to the global marketplace page so that he can generate sales. The marketing funnel suddenly begins to revolve around the online retailer.

With all that in mind, we've made an exhaustif list with the essential strategies for any ecommerce business to succeed globally. 

9 Essential Global Ecommerce Strategies

#1 Build a great brand

It’s important to have a great brand in place!

Before reaching out to customers across the pond, you need to make sure that your product has wings locally. If you’re a UK based business, then what percentage of the global population (inside of UK) purchases your product. What’s their feedback? Are there any tweaks necessary before shipping out globally?

#2 Ask the right questions

These and many more questions need to be answered by the brand, in order to future-proof it in case something happens. As international launches are complex and often expensive, ecommerce companies need to ensure that they’ve built a “brand” and not just a website or business model.

#3 Create value for consumers

Does your brand create value for its customers? How good is your retention rate? Do customers re-order in bulk next time? You need to create strong value for your customers, in order to truly build a brand. Otherwise your existing customers might select the local variant and you may end up losing your local and global markets simultaneously.

#4 Conduct Tests

Conducting ecommerce tests in your local area first, can prove to be highly beneficial when expanding globally. When you want to know whether you have a “brand” or not, you should issue questionnaires, survey existing customers and venture out to the real-world and talk to potential customers face-to-face. You want to conduct as many tests as you can, before confirming that you have a brand that has repeat customers that are price insensitive.

#5 Audit yourself

Finally, auditing your brand is the most crucial step to estimating your brand value!

If you can create strong value for your customers, then your own brand value should be strong as well. Figuring out whether your brand stands tall with the competition is another aspect that you should be focusing on. Whether your product range, customer care and overall quality is something global customers will buy into.

#6 Ensure you're using the right technology

If you have a website without the ability to scale it up, then you might have a crash on your hands.

That can get very expensive, when you’ve already developed marketing models around your launch date. Handling technology is key to global expansion, and ensuring that you have the right website design, server bandwidth and backend distribution is important.

Technology Backend

The backend of the ecommerce platform should be scalable enough to drive through key local seasons, probabilities and regional expansion. When customers start to talk about your ecommerce platform organically, the technology should be scalable enough to give them the unique experience that they seek.

If the website fails, or the backend doesn’t calculate local prices correctly, you may have lost that customer long-term.

Local customization

Local customers may be “delighted” if the ecommerce platform is localized. With local language, local CTA and local shipping experiences, you can really convert that customer for greater LTV (Life Time Value). When a local customer engages with the local experience for the first time, they would not choose your competition who may only be competing on price.

Website Partner

You may have started out with a WordPress site, Global e-Magento site, Shopify or with a marketplace like Etsy. But now that you have to expand globally, you need more control and scalability. That’s why you need to do your research about which website partner can handle the traffic load, has great customer service and has all the prerequisites before scaling up.

#7 Choose the Right Payments Solutions

Payment processing solutions may not be something that ecommerce managers and owners think about on a day-to-day basis. Responsibilities including marketing, inventory, and retail takes up a lot of their time. But thinking about the right payments partner is key, and allocating certain time to figure out what payment method works where is important.

Payment Partners

Payment partners are organizations that excel in global ecommerce payment solutions. They ensure that any payment option is acceptable to the final purchaser, and drive demand further by ensuring that all forms of payment are accepted.

Choosing the right payments partner is critical to global ecommerce success

Example: if a customer is in Bali and your website is based in the UK, then a standard payments provider may not be able to accept their payment.

Payment Options

Payment options are probably the most important factor to customer retention. When at the bottom of the funnel, customers are ready to click that “buy” button, and if they find out that their favourite mode of payment is unavailable they’d never come back.

With so many websites offering multiple products and services, yours needs to do everything it can to please the customer.

Payment Validity/Security

Having a partner that has a safe and secure payment gateway (SSL, HTTPS) is important. Customers that see that the payment gateway is secured, tend to trust the website a lot more. E.g. if you walk into a physical store but the credit card machine looks broken and used, the customer may prefer shopping at another destination.

Customer Service, Refunds, Processing fees

Refunds are a lesser talked about phenomenon in the ecommerce space and that needs to change. Payment partners that can offer great customer service, quick refunds and economical processing fees are the winners in the global ecommerce space.

You shouldn’t settle for any payments partner, but get one that has global experience.

#8 Understand Global Buying Habits and Culture

Once you have your technology, branding and payments components taken care of, the next step in the strategy revolves around understanding the customer’s culture and habits. When considering global ecommerce strategies, it’s important to ensure that you have some amount of research and budget dedicated to understanding global buying habits and cultural differences.

Some markets may be offended with a 15% discount, while others may convert twice as much. It’s up to you as the ecommerce manager to create the perfect strategy for ecommerce global expansion.

Customer Research

What’s better than getting a lot of customers? Getting the right customers!

Expanding slowly and through small steps is the best approach, and its adopted by Alibaba (the world’s leading ecommerce platform). Investing in the right markets, the right customers and the right niche, leads to global scaling up of the brand and platform.

When you know which customers you’re looking for, you can quickly adapt your business model, marketing strategy and financial strength to scale it up further. Unfortunately, some ecommerce owners still believe in mass customer acquisition, which leads to confusion and doubt in the minds of both the consumers and the employees. Conducting research is important to understand which market (inside the demographic) is the most likely to convert on your website.

Example: if you’re an online shoe retailer, then understanding that the target audience in Germany are different from that of Florida, USA, is going to help you out multifold. The demographics, psychographics, ease of transaction, tech connectivity, customer awareness, etc., are all factors that play into the successful ecommerce expansion strategy.

The right messaging

When it comes to the right messaging, ecommerce managers must understand that local customs, nuances and tonality is important to get “right”. One small error, and you can be looking at a massive PR nightmare that may negatively affect your global ecommerce strategy. Ecommerce strategists must get the messaging localized, heavily researched, and consumer-tested before launching it at scale.

Example: you can issue a set of emailers to a database of customers and gauge their conversion rate, open rate, CTR% and overall response. If its highly positive, then that’s a good message to push across the board. However, if there’s a backlash against it, then you’ve just saved the brand a lot of value from being lost.

Product customization

An often used strategy is product customization!

This means that either the packaging, the labeling, the experience, or the entire product itself is customized to the target audience. E.g. Customers in Asia can get a localized hybrid of the product, to retain them further. If you’re selling headphones through ecommerce channels, then fulfilling centers in Latin America can include a gift-card in the local language.

Product customization also takes many shapes depending on the competition, and it’s up to the ecommerce manager to gauge what level of customization is profitable to the company. If you customize certain features so that it adapts to the local market, then that’s a great thing. However, if the customization takes away from the “brand value” or charm of the product then that’s a lost opportunity.

#9 Choose the right business model

After you’ve determined the right course of action from the perspective of marketing, technology, payments and consumer preferences, the next action item is your ecommerce business model. There are a lot of business models that exist out there, but choosing the one that both fits your needs and those of the customer takes time.

Often your existing strategy may not work out in the initial months, while you run test after test on marketing or pricing. A simple tweak to the business model could have shortened consumer lifecycles and extended sales.

That’s why it’s important to choose the right business model from the beginning.

Revenue Model

Revenue models are important to figure out in the beginning itself. Profit margins, cost of acquisition and suppliers’ fees, all add into the final revenue estimate for the year. Growth is affected by choosing the right business model, as is the global expansion of the brand. Selecting the right revenue model that works for you is critical to a successful global ecommerce strategy.

Example: while only selling to people with credit cards may work in most of Northern Hemisphere countries, but not in the region of Latin intemodel. As the larger population may prefer dealing in cash, your revenue model will have to adapt to local preferences, offering local payment methods as a solution.

Shipping Model

Planning your ecommerce logistics is a crucial step. Drop-shipping e-carriers may work in US and UK, but may not work so well in Brazil or Argentina. You may need to add more fulfillment centers that are local, or work directly with manufacturers to ship to these off-site markets.

Choosing the right shipping model affects the long-term viability of the market, the overall growth in the region and the expansion into further domains like – orthogonal products, supplementary services, etc.

Shipping models can add a lot of cost to the final product, and global e-clients may not be able to pay the premium to have your product shipped. Therefore, to avoid losing the customer at first glance, you must create a robust shipping model that suits your product range. 

Local partnerships

Local partnerships are the difference maker, when it comes to choosing the right business model. You may decide to enter a new market through existing online marketplaces (quite common in China), enroll in an affiliate marketing or even beef up your website to serve global customers. Unless you’re in the SAAS space, the latter option has risks involved with it. Therefore, it is advised to have some working relationships with local partners, so that they mitigate those risks.

Example: if launching your sunglasses brand in Chile, you need to have great partnerships with local authorities, vendors and suppliers before deciding to significantly expand in the area. It’s always helpful, and the information, resources and planning aid that they provide is remarkable.

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