A world of opportunities

In 2014, the global eCommerce market was worth $1.3 trillion.

Fast-forward to today, and it’s grown to $6.9 trillion, a whopping 430% increase in value. By 2027, the global eCommerce market value is projected to hit $8trillion.

We all know that these are enormous numbers. Recent world events have changed our shopping habits forever, or rather, provided a shot in the arm to a digital age of shopping that was always going to be the future.

For eCommerce businesses with ambitious growth aspirations, there is, quite literally, a world of opportunities out there in both established and emerging markets.

Established eCommerce markets

These eCommerce markets are some of the largest in the world, propped up by high internet penetration and a digital landscape conducive to growth.

Emerging eCommerce markets

There are many emerging eCommerce markets across the globe, so we’ve hand-picked a few that are particularly exciting. Emerging markets are characterised by factors that point to their potential for transformational growth, like growing populations, digital literacy, and infrastructure.

Why expand into a new market?

As we can see above, there are ample opportunities for business growth across the world. That said, it’s incredibly difficult to secure a foothold overseas when you’re required to ship your products long distances. International shipping costs way more for your customers, and orders take much longer to arrive.

Put yourself in the customer position; why would they take the risk on a foreign company, pay more for a product, and wait longer for a delivery when they can just order from a local company? Unless your product is incredibly unique or sought after, you’re going to struggle to convince overseas customers to shop with you.

By holding stock overseas, you can eliminate a lot of those problems. Additionally, customers will feel much more comfortable in making a purchase when they know they won’t have to ship an item half way across the world to return it if they decide it’s not quite right.

So, if you’re serious about growing internationally, the smart choice would be to localise.

Localising your brand: things to consider

Whether you’re actively working on international expansion right now or have plans to do so in the near future, there’s a lot to consider. Ultimately, your goal should be to offer the same great experience your domestic customer base knows and loves to your overseas customers, all while being financially and legally responsible.

Similarly, to make your investment of time, resources, and money worthwhile, you’ll need to think about how you connect and engage with your new customers, and grow your international market position.

Let’s take a look at some key elements of localisation.

Market research

No eCommerce business, regardless of size, should blindly enter a new territory without doing their research and due diligence on the market there.

Without the data to say otherwise, you could end up holding stock in a place where there’s no demand, or an area where the competition is too stiff.

Conducting market research involves gathering an understanding of key factors such as consumer behaviour, market trends, competitive landscape, and the regulatory environment.

To gather this information, businesses might pursue primary research such as running surveys, focus groups, or observations. This often involves bringing local consumers to take part, or speaking with consultants and industry experts that can give you practical advice on your target market and niche.

Employing primary sources like this is often time-consuming and costly, but can give you an incredibly accurate picture of the state of the market when done correctly. Many businesses who opt for this route often outsource their market research to a more specialised company.

The alternative – and more accessible option for most eCommerce businesses – is to conduct market research via secondary sources such as via research reports, industry publications, government databases, and reputable online sources. While you’ll often need to pay for good quality data, it’s generally a much easier route to take.

If you’re planning to move a small amount of stock to a new territory, as opposed to doing a full scale launch, market research from secondary sources will probably be more than enough.

Laws and compliance requirements

Compliance isn’t just important from a legal standpoint. Yes, being compliant will help you avoid financial penalties, but it also helps you to build trust with partners and customers in overseas countries.

Taking the time out to understand and prepare for international trade laws, import/export regulations and other compliance requirements will play a significant role in helping you to establish a strong, reputable presence in a new market.

While by no means an exhaustive list, here are some key areas of compliance you should consider before expanding into a new territory. Remember that every country will have its own set of unique requirements.

Export/import regulations

Export/import regulations are a set of laws and guidelines set by countries to control the movement of goods across their borders.

They typically encompass requirements for documentation, tariffs, taxes, and restrictions on certain items, and are enforced to regulate trade, protect consumers, and maintain national security.

Local laws

In addition to any export/import regulations, you’ll also be required to comply with local commerce laws. For example, many countries require permits or a licence to sell goods there, varying greatly depending on the location or product’s you’re hoping to sell.

Furthermore, health and safety regulations have huge variations across the globe, especially in sensitive niches like cosmetics, electronics, toys, and food and drink. Some may require you to adapt safety instructions, guidelines, or even make changes to the product itself.

IP protection

You should also be wary that any patents or trademarks you have on your products might not be valid in overseas markets. Always check, and consider purchasing the necessary IP protection to keep your business safe from infringement.

We’d always recommend speaking with local legal experts before expanding into anywhere for the first time. It can save you money, reputation, and a whole lot of headaches in the long run.

Payment methods and currency

There are over 200 payment methods worldwide. Yes, you have your giants like Visa, Mastercard and American Express, but today there are more ways to pay than ever before.

Preferred payment methods vary significantly by country, so giving your customers ways to pay that are most convenient to them will reduce cart abandonment rates. In the UK and USA, for example, it’s common for online payments to be made with debit cards, credit cards, and via digital wallets like PayPal.

However, this isn’t the case everywhere. For instance, in Germany, ‘Giropay’ and ‘Sofortüberweisung’ are popular, while in the Netherlands, ‘iDEAL’ is a preferred method. In China, digital payment platforms such as Alipay and WeChat Pay dominate the market. In Brazil, ‘Boleto Bancário’ is a widely used method for those who do not have bank accounts or credit cards.

Such a diverse landscape of alternative payment methods can be challenging both on a technical and strategic level. Ultimately, it’s important to offer payment methods that your new customers are familiar with, are comfortable using, and are convenient to them.

Think of it as a kind of trust element; you probably wouldn’t feel safe buying something from a foreign company when the only ways to pay were through services you’d never used before.

On a technical level, some payment gateways might be harder to integrate with depending on the eCommerce platform you’re using. For instance, established platforms like Shopify offer an extensive range of out-of-the-box integrations, simplifying the process by a significant margin. However, if your platform lacks native support for prevalent payment methods in your target market, you may need to undertake a more hands-on approach.

In these cases, integration involves working directly with APIs to facilitate these integrations and making corresponding adjustments to your website’s front-end user experience. Such customisations ensure seamless payment transactions that resonate with the preferences of your international audience.

Overseas tax compliance

It’s important to clarify here that we’re not tax experts, so we won’t be providing any tax advice here. You should definitely speak with a registered accountant before doing business overseas; preferably an individual or firm with expert knowledge of the compliance requirements of your target market.

However, we couldn’t put together an article about international expansion without mentioning tax. From our experience working with eCommerce retailers, we commonly see businesses underestimating how long it takes to register for overseas tax.

Unfortunately, this often results in businesses having to pause everything while they collate the necessary documentation for their application and wait for their tax codes to be generated.

Here’s the deal; while it varies from country to country, you’ll generally need to wait between 6 to 12 weeks to receive your tax codes once your paperwork has been submitted. It’s worth noting that these timeframes are rough guidelines, and you could be waiting longer or shorter depending on the context of your application.

• “International VAT, or Value Added Tax, refers to a consumption tax levied on goods and services traded between countries. This tax is typically applied at each stage of the production and distribution process, ultimately borne by the end consumer. Due to the intricacies of navigating various tax jurisdictions, establishing and implementing international VAT procedures can take roughly 6-12 weeks to complete.” – Alex Brown, eCommerce Manager, Taxually

Book a call with Taxually here.

Supply chain and logistics

Creating a strong, resilient, and reliable supply chain in your chosen market will play an enormous role in your success. Supply chain efficiency impacts key areas of your business, including customer satisfaction and your bottom line.

Choosing the right partners to support you in this area couldn’t be more important. It’s crucial to have the support of logistics experts who understand the local market and are experienced in navigating the challenges that supply chains often throw up.

Reliability, scalability, level of experience and public opinion should all be considered when researching and approaching partners.

Regardless of what you’re selling, you’ll need a partner to provide warehousing, distribution and transportation services. While you could outsource these individually, most eCommerce businesses work with a 3PL or 4PL who will take care of the majority of your overseas logistics operation for you.

3PLs tend to cover the last-mile delivery process, which covers order fulfilment and carrier management from the distribution centre to the final destination. On the other hand, 4PLs have more accountability and responsibility for the wider supply chain.

In general, 3PLs are better matched to small and medium-sized businesses, whereas an enterprise wanting a fully hands-off approach might consider a 4PL.

• “When it comes to holding stock overseas, investing in the right technology is crucial for managing your supply chain effectively. Technologies like warehouse management systems (WMSs) and inventory management software provide real-time visibility on your stock and operation, helping you to optimise costs as you grow.” – Paul Wright, Chief Technology Officer, James and James

When thinking about warehousing and distribution specifically, you’ll want to carefully think about location. Some countries are vast, which means there may be a few candidates on the table when deciding where to hold your stock.

Suitable warehouses and partners should be based in places that have great access to your key markets and transportation hubs. If you’re planning to send your goods to them by air, then ideally they’ll be close to an airport, or if you’re going the ship route, then not too far from a port.

Marketing and messaging

To optimise the return on investment (ROI) of your marketing budget, gaining a deep understanding of how your prospective customers in the new market search for products and consume information online is crucial.

This knowledge allows you to effectively tailor your digital marketing strategies for maximum reach, engagement, click-through rates, conversions, and sales.

It’s important to recognise that the content, calls-to-action (CTAs), and messaging that resonate with your domestic audience may not have the same effect in an international market.

Cultural differences and varying digital habits mean that what works in your home market might not in a new one. Your new audience likely has distinct cultural sensibilities and digital preferences.

Before hiring a local SEO agency or sourcing a freelancer to develop a plethora of localised social media content, foundational research is essential. This ensures that your marketing budget is invested wisely and not squandered on ineffective channels. Key aspects to research include:

• The most popular social media platforms among your target customer base.
• Monthly organic search volumes for both informational and commercial queries.
• Types of content that resonate the most, such as long-form or short-form articles, videos, infographics, etc.
• Marketing strategies and activities of your competitors in the new market.

Even with thorough research and planning, marketing in a new territory often involves some degree of trial and error. Regularly reviewing performance metrics is vital. This approach enables you to intensify efforts on successful strategies and revise or reduce those that are less effective.

• “Spending the time to research your local competitors’ marketing activities can provide you with valuable insights into what resonates with local audiences. Use what you find to identify trends and differentiate your brand to improve your market position.” – Simon Wheeler, Chief Sales and Marketing Officer, James and James

Customer service

Customer service is an essential pillar of all eCommerce businesses. Good CS Teams can reduce the amount of negative press your business has, and improve customer retention.

As a customer, there is nothing worse than being unable to contact a customer service representative if you have burning questions or issues with an order.

That’s an important thing to consider when expanding internationally, because your existing customer service team will likely be operating in a different time-zone. Not only that, there’s a good chance there will be language or cultural differences between your CS employees and new customers, too.

For most businesses, it isn’t really feasible to go on a hiring spree to recruit a localised CS Team. It’s neither cost-effective nor practical. But thankfully you have other options, such as leveraging the power of chatbots or self-serve tools, as well as outsourcing a portion of your customer service to a local company if you’d prefer to maintain that human element.

While in reality outsourcing CS might not hit your bar for quality, local companies should have a better understanding of the needs of local customers, and can be hired at a fraction of the cost of internal staff.

Final thoughts

Expanding internationally might seem daunting. In many ways, it is. But don’t make the mistake of associating ‘daunting’ with failure, impossibility, or other negative connotations. Things that are daunting or challenging often come with the greatest rewards.

And besides, wherever the road takes you during your journey into international expansion, you won’t be doing it alone. Nobody does. Any successful international eCom brand has been built by a team, not an individual.

That’s why the most important thing you can do when expanding internationally is have the right people, partners, and resources by your side.

It’s impossible to be an expert in everything, so be sure to lean on the experience of others, whether that’s in logistics, marketing, customer service or anything else we’ve mentioned here today. As long as you’re aligned in values and vision, the world truly is your oyster.

About the Author

Simon Wheeler

As Chief Sales and Marketing Officer, Simon is responsible for articulating the value of our fulfilment services to eCommerce brands across the world, and generating new clients for the business.

White not finding innovative solutions for new and existing clients, Simon enjoys time away with his partner and two children.

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