The benefits of global ecommerce expansion are obvious: It’s an opportunity to tap into new markets and revenue streams, increase brand awareness, and boost your bottom line. And while it’s tempting to go full steam ahead to capture your global potential, it’s important to be strategic. Building a detailed plan will help you minimise costs and focus on the areas that will have the biggest impact for your business.
Here are five key steps for scaling your business from Australia, along with insights from an Australian business that’s succeeded.
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1. Identify international market potential
It’s easy to find digital transaction volume in a given country, but that’s just the starting point. Dig deeper: compare that volume to population size. Check if the digital and logistics capabilities can support more growth. Examine the geopolitical environment to make sure conditions are right. This will ensure you’re using your resources to establish your business in markets that will deliver the best return on investment.
It’s also critical to understand how well prospective consumers know your brand. If your brand is relatively unknown, you’ll need to factor in the cost, time, and effort of building awareness.
“Take some risks,” says Peter Clarke, Chief Technology Officer at Australian activewear brand Lorna Jane. “Yes, you’ve got to have an appetite for that risk and manage that carefully, but find what’s new and what hasn’t been tried yet. Look at what someone else has tried and then put your own spin on it.”
This exercise will help determine the markets that will drive the most success for your business:
- Search for consumers abroad who know your brand
- Capture as many data points as possible
- Dig into web tracking data to learn where people are browsing your site from
- If you have non-transactional sites in the countries you’re considering, analyse traffic volume and trends
- Include referrers and social media signals in these markets
2. Understand the challenges of international ecommerce
There are a million things that can trip up your launch, frustrate your customers, or put a dent in your plans. That’s where market research and preparation comes in.
An ecommerce expansion to any country comes with inherent challenges and complexities. Understanding them from the get-go will help you prepare for growth and keep costs to a minimum as you expand. For example, an Australian retailer looking to expand into New Zealand will need to consider customs and duties along with shipping issues like international trademarking and appropriate packaging.
Tax obligations can present another area of complexity and may be affected by tax treaties Australia has with other countries. Whether you have a permanent establishment or employees in the country your business is operating in can also have an impact.
It’s best to start by targeting a small number of strategic, high-potential-for-growth countries. Fill in the remaining markets with a verified third-party international fulfilment service that can plug into your own checkout experience. It’s best if the partner you choose can manage all back-end fulfilment on your behalf. Its capabilities should include payments, fulfilment, duties, customs, and tax compliance, and it should provide a low-risk option for testing across many markets. If not, these are costs — and risks — your teams will need to manage on their own.
Choosing the right partner is also critical when it comes to your ecommerce platform and managing your associated technology stack.
“You want an organisation that’s a thought leader in this space, not just a product,” says Clarke.
“You need a partner to lead you through that journey and who knows which direction to point you in. Cultural alignment is something that can be, at times, underrated in this space, but your chosen partner must be aligned with your ways of working.”It’s worth remembering that among all the specificities that come with different regions are some important commonalities. The latest State of Commerce report surveyed more than 4,000 commerce professionals and found that leaders in the field are 4.3x more likely to say their organisation is excelling at digital commerce. And 64% of commerce leaders are prepared to use data to connect commerce across the business.
3. Localise by market
Personalisation is critical to a properly localised experience and requires that you immerse yourself in the consumer behaviours of your new market.
Consider, for example, how customers in the region prefer to shop, pay and engage with online platforms. Research seasonal differences that might have an impact on what you sell and when. Find out about country-specific festivals or holidays that may affect the timing of campaigns, and educate yourself about any cultural or societal norms to be mindful of when advertising or displaying products.
Language will play a key role in successful localisation. Poor translation can be a major hindrance to conversion on foreign sites. Other factors include different address formats and varied checkout preferences. It might seem like a small thing, but being asked for your postcode when your country has ZIP codes for instance, can be alienating for a customer — a failure of the brand to fulfil its personalisation imperative.
Lorna Jane met this aspect of the localisation challenge by replacing their clunky legacy ecommerce platform with Commerce Cloud which can support multiple languages, currencies and processes along with providing the in-depth data critical to achieving personalised customer experience.
Identifying popular social media channels in your target region is another key consideration. For example, social media has been the main channel for e-commerce in China for several years, but the platforms commonly used in China are not available in Australia. With social commerce on the rise, it’s important to understand the intricacies of social platforms in different regions.The upshot? You have to know your customers, even in locations you think will be similar to Australia. “Australian customers are not the same as those in New Zealand,” explains Clarke. “We have some demonstrable differences in our customer segments there. Despite being so similar on the surface, they shop very differently to Australians.”
Your localisation checklist
- Decide on your approach for campaigns and promotions. Is it one-size-fits-all or country-specific?
- Consider your product catalogue and inventory mix. Does one central warehouse sell the same products across all targeted countries or are there exclusive products per country?
- Develop your pricing strategy. Will the item price be the same across regions?
- Determine the shape and size of your teams. Will you have individual teams in the respective countries? What will be their size and level of web management skills?
- Identify social media platforms and trends prevalent in the region you’re targeting.
- Be mindful and respectful of the traditions and cultural or societal norms of the country you’re localising for.
A 30% spike in revenue?
This Aussie activewear business achieved it with a global ecommerce strategy.
4. Determine payment methods
Payment strategies and taxes are two of the most complex factors that could impact a global ecommerce expansion. You’ll need to tackle these locally, based on legislation, diversity of payment types, and consumer preferences. Analyse your target market to understand and offer the best payment mix. For example, many consumers in the Latin American market use a payment system called DineroMail. After making a purchase, shoppers are directed to a DineroMail site. They print out a payment slip, then take it to a 7-Eleven to make their purchase.
To navigate various payment strategies, you’ll want to work with an ecommerce platform that can natively support payment and currency plug-ins from all leading providers. This makes it easy to quickly launch relevant payment providers in the country or region of your choice. Customers can pay in their local currency using their preferred payment method.
“Internationalisation is a key criterion for so many businesses. And Commerce Cloud does that better than anybody, especially when it comes to settling in the local currencies,” says Clarke.
Brands also need to consider capture and settle when it comes to foreign payments. During the investment phase of your expansion, you can spend money on currency exchange fees if you pay local partners and employees in local currency but settle digital revenue in your home country.
In some countries, things get more complex due to internet and consumer regulations. In others, you may face a volatile currency. If you’re going to price in local currency but want to capitalise in your home market, watch exchange rates carefully. You may even consider evaluating risks and potential insurance options.
On top of that, you may need to establish a local bank account abroad. Be sure to complete the entire application process as early as possible so all systems are in place when your site is ready to launch.
5. Activate and launch
Brands may want to use a minimum viable product approach to fast-track a global ecommerce expansion. Companies might consider working with existing vendors as a low-risk option to test markets.
Before contracting with new partners, check existing third-party logistics providers. Find out which payment gateways could service a range of regions. Run a full assessment with all vendors to determine their capabilities.
Make sure all 3PLs meet local requirements. For example, can your content management system handle European umlauts and Asian characters?
Get ready for what’s next in international commerce
Expanding into new markets is a great way for your business to grow your revenue and customer base and a flexible, scalable commerce platform is key to finding success in new regions across the globe. Your ecommerce solution should make it easy to create and manage local site instances, as well as deploy localised marketing messages and promotions, global content strategies, custom price lists, and more. This is the beating heart of any successful international ecommerce approach.
