Globalization has opened up a big opportunity in e-commerce: global e-commerce. With sales expected to hit $6.33 trillion by 2024, the possibilities are endless and at your fingertips. E-commerce businesses are in a great position to expand and tap into a huge global market. It’s not easy but it’s worth it.
In this post we will go into the basics of global e-commerce and share the ways to increase your sales in foreign markets.
What is Global E-commerce?
Global E-commerce is the big picture of selling products and services online to anyone in the world. Global E-commerce allows retailers to go international and reach customers worldwide whereas local E-commerce is limited to selling within the retailer’s home country.
Thanks to all the e-commerce platforms, marketplaces and digital solutions out there, merchants can sell online without boundaries. So it’s easier than ever to go global.
How big is the market?
The global ecommerce market will be $4.2 trillion in 2024. That number will only grow in the next few years so borderless ecommerce is becoming a profitable option for online retailers. By 2027, 23% of all retail sales will be online.
Casey Armstrong, CMO at ecommerce fulfillment brand ShipBob says, “While a lot of the focus in ecommerce is on the US and Canada, there’s a lot to learn from other big international players who are seeing even faster ecommerce growth.”
“Merchants can sell where they want based on this data and ecommerce demand from these countries. At ShipBob we have fulfillment centers in Canada and the UK and one opening in Australia soon.”
Benefits of International eCommerce
eCommerce has its challenges like any other business. These problems include identifying the right market, getting the target market’s awareness and trust, and increasing sales and long term profitability. And companies must be careful in choosing the best e-commerce solution that will combine all data and connections for better and more efficient management and decision making. Global e-commerce can be good for both customers and customers’ businesses if done wisely and well.
For Businesses
By expanding your brand in other markets you can reach more potential customers. This will increase sales by increasing brand recognition and trust.
Expanding in new areas and raising brand awareness to expand your business’s customer base.
Discovery and development of new locations, Are one of the reasons why an online business can try to reach a global audience. Before opening a physical store in a foreign country, expanding your business abroad allows you to test if certain sectors will be profitable.
For Customers
Customers worldwide benefits from e-commerce by having more products. They can be quite wanted in countries or areas that don’t produce their products and services.
A well-planned global e-commerce program allows businesses to communicate more with their customers.
E-commerce also increases productivity because it’s fast to get a product and pay when buying online. No need to visit physical stores so you can also save time on travel. Since many wholesalers are into offline retailers, customers had to pay more.
How to Expanding Your eCommerce Store Globally
To go global you need to have marketing and revenue growth plans for each new market and be willing to put in the hard work. Here are some tips to help you transition smoother:
1. Market Research
Your company needs to research the markets in the countries or regions you want to expand to. Key areas to focus on are consumer demand for your product or service and who of your competitors is already in that market.
2. Localise Your Approach
Internationalization is about adapting a product or service to a location. This can mean services or products for different languages, regions or even the look and feel of the site in the case of global e-commerce. Localization aims to remove obstacles for new customers.
3. Consider Different Civilisations
In the age of global e-commerce it’s important to respect different cultures. Symbols and patterns that are acceptable in one country or region can be offensive in another. When entering new markets companies must research.
4. International eCommerce Solution
You also need the right tools to expand into a bigger international market. For example, an e-commerce system that can scale with the growth that comes with entering a global market.
5. Comply with Local Laws
And finally, check the local laws of your market opportunity. Each country has laws governing shops, from payments and shipping to confidentiality and tax. Don’t damage your brand internationally by not being up to date with local laws.
4 Things to Consider Most While Launching Cross-border
1. Localization
Globalization and localization are often used interchangeably. While globalization changes logos, website graphics, colours and all the other non-linguistic elements that impact sales for the community, localization only changes the content. In the case of e-commerce, this means having local payment options for providers, products that fit the target market’s culture, and schedules, dates and prices in local format.
2. Pricing
Business And economics Review says how buyers perceive pricing is as important as the price itself. There are ways marketers can make the audience believe a company’s pricing is cheaper than the industry standard even if it’s the same as their competitors.
For example, products sell more in high context markets like China, India, Brazil and Argentina when prices end in zero ($10.00) and in low context markets like US, Australia and Norway when prices end in nine ($9.99).
3. Landed Costs
Landed costs in e-commerce are the fees merchants pay for the goods to “land” at the customer’s door. Taxes, duties, transaction fees, customs, health premiums, shipping costs and online payment fees are included; the cost of producing (or in the case of resellers, procuring) the actual product is not.
Landed costs can be much higher elsewhere. For example, exporting an American product to Canada costs around 25% less than delivering it domestically but the final landed cost is 125 times more.
4. Payment
Credit cards and electronic wallets will tie for first place among online payment methods in the US in 2020, with 30% of all transactions according to Statista.
But the rankings are different when looking at payment options globally. In 2020, internet and mobile wallets (like Contactless Payments and PayPal) took the top spot for worldwide e-commerce payments with a whopping 45% market share, way ahead of credit cards which came in second with 23%.
