International Ecommerce: Online Commerce Goes Global

by Rakuten Super Logistics | eCommerce Strategy

In recent years, there has been much discussion about international trade and globalization, and its impact and importance for both the domestic and global economies.

However, with global online sales estimated to exceed $2.3 trillion in 2017, any discussion about global business must take into account the vast impact of international ecommerce.

Despite the rise of nationalism (both at home and abroad) the internet has vastly increased the amount of commerce conducted across all national borders; in addition, the evolution of new and improved technologies, including the rapidly growing smart phone market, have further spurred on the growth of global ecommerce.

While Americans have come to accept and embrace the idea of purchasing almost everything online, they are not alone in their willingness to turn to the internet for a vast array of products and services.

Ecommerce is also rapidly growing in countries with emerging economies, including Brazil, Russia, India and especially, China. According to a global online shopping study conducted by Pitney Bowes, 66 percent of all consumers now shop online and approximately 40 percent have made ecommerce purchases from another country.

The Good News: A Global Hunger for American Ecommerce

The good news for American ecommerce companies is that the same study found that, for online customers who did shop across international borders, the U.S. was one of three of the most popular destinations; the other two popular ecommerce destinations included the UK and Germany.

Given the size of their respective economies, it’s also not surprising that the study found the biggest international markets for US ecommerce products and services are Australia, the UK, and Canada. Still, the research also revealed that there is “significant opportunity” for US ecommerce companies to be found in other nations, especially in Brazil, Germany, and China.

Of course, this study was conducted prior to the recent imposition of new tariffs by the US government on steel and aluminum imports, and promises of retaliatory tariffs from European Union (EU) counties, as well as Canada and Mexico. There is also speculation that additional US tariffs on multiple products imported from those, as well as other countries—including the world’s second largest economic power, China—may yet be forthcoming.

Yet, despite the move towards protectionist policies, there remains no doubt that the international marketplace provides significant ecommerce opportunities.

The Pitney Bowes study revealed that there is growing demand for “lower value (US) goods” in the international ecommerce market; this is particularly true for Canada, given the relatively cheap shipping costs to that market, compared to those of overseas markets.

Indeed, other surveys also appear to confirm the burgeoning nature of the international ecommerce space; according to a Forrester Research survey, cross-border B2C ecommerce is slated to more than double, reaching approximately $629 billion by 2022.

The Building Blocks for Developing International Ecommerce

As is the case with any business development, expanding a company’s reach into the international ecommerce market requires developing a strategic business plan to reach its goals.

As you might expect, there are many, varied factors to consider when developing a business strategy to expand into the international ecommerce space. These would likely include:

1. Establishing Target Markets

It’s a big world out there, and in order to ensure that a company’s limited resources are properly targeted to reach the desired audience, the first step is to learn who/where the most likely international clients are for your product or service. Explore data that reveals the international markets where people are already purchasing similar goods, and consider those areas as possible global ‘launching markets’ for your company’s products.

Information is power—and the more information a company can glean about a potential international ecommerce market, the better able it will be to directly target its sales/marketing efforts.

2. Payment Method

Establishing a method of payment that is as user-friendly as possible for international customers is crucial. One fact that seems to be universal in the ecommerce space remains the high level of online customer expectations. Ensuring the ease of payment and security for international consumers is thus a key factor in developing a strong connection with customers, no matter their location.

3. Government Regulations

Understand the unique regulatory environment of each international ecommerce market. One of the many challenges that a company can face when entering into international ecommerce is the diverse set of regulations that exists in each nation. A host of related questions are certain to emerge as the business enters into foreign markets, including the taxes and duties required by each individual market; the rules of customs, and how they may affect shipping in a foreign nation; and US free-trade agreements, which could make international business transactions (including ecommerce) simpler and quicker.

4. Shipping, Transportation, and Logistics

Obviously, shipping products across national borders will require more time, and likely more cost, for ecommerce companies. It will, as a result, become even more important to establish clear and consistent delivery best practices for international clients. Of equal importance will be ensuring that global ecommerce customers are provided accurate information regarding delivery time and costs. In addition, it will be critical to establish an easy-to-understand return policy that is in keeping with both high customer expectations and realistic company goals.

5. Communication

Of course, English is the most common language of international commerce; however, online businesses should not assume that an international customer is fluent in English. If a company wishes to communicate, for example, with an audience where the primary language is Spanish, it would only be common sense to ensure that any regional marketing and/or sales efforts provide information in that regional language. In addition to applying the correct language, be sure to use proper cultural diction. It is wise to consult with a native speaker to ensure your message is properly conveyed and you avoid a cross-cultural blunder.

The Road Ahead…800 Million Potential Reasons To Consider Global Ecommerce

Providing an optimal client experience is not merely for domestic customers—and the ability to understand and communicate with the ecommerce business is a prerequisite to providing an optimal purchasing experience.

Of course, entering into the area of international ecommerce may not be a ‘good fit’ for every online business. The laundry list of “must-haves” in order to succeed in global ecommerce may simply be too long—and too expensive and time consuming—for some online companies.

However, it’s estimated that about two-thirds of the global consumer purchasing power is located outside the domestic US market; Pitney Bowes’ study also estimates the actual number of potential international ecommerce customers to be just under 800 million people.

With that reality in mind, many ecommerce businesses might want to consider that, in 2018, their ‘field of opportunity’ extends far beyond America’s borders.