Once, the streets of London were said to be paved with gold. Now virtual high streets are more likely to be paved with gold, as global cross-border ecommerce is forecast to reach $1 trillion by 2020. Uncertainty in local economies and fluctuating currencies lead businesses to look beyond their own horizons, as they seek to meet consumer demand, grow their operations and identify exciting new lands of opportunity. China, for example, has the biggest market for ecommerce in the world. In 2016, there were over 410 million shoppers in China who shopped cross-border, a number set to exceed 740 million in 2018, whilst India is the fastest-growing online retail market in the world, expected to grow to $100 billion by 2020.
Overcoming the complexity of global ecommerce
Extending your market overseas isn’t without risk though, and for ecommerce companies branching out into new regions and continents, it can seem daunting: adjusting for languages, currencies, buyer behaviour and seasonal shopping habits, shipping fees, taxes, regulations and duties as well as managing returns strategies can be hugely complex. And even when you have this under control, how do you let consumers know about your business? You need to devise a marketing plan and client contact strategy for an entirely new region, maintaining brand consistency across every market and taking translations and cultural predilections into account – we’ve all raised a smile at those ‘lost in translation’ marketing mishaps. For example, did you know that an umbrella or a pair of shoes make for bad gifts in China? Regarding the umbrella, ‘sian’ in Chinese means ‘apart’ and ‘separation’ and similarly the word for ‘shoes’ sounds exactly like a word for ‘bad luck’ or ‘evil’.
Today’s cosmopolitan consumers buy cross-border
Research shows there is a great appetite for consumers buying cross-border. A Pitney Bowes study shows that two-thirds of consumers have made a cross-border purchase, and 32% do so at least once a month. For some, buying behaviour is fuelled by overseas travel: 61% of shoppers in the Pitney Bowes study visited stores during their travels, and wanted to continue the experience by shopping online once they got home. With latest figures from Office of National Statistics in the UK showing an increase in overseas visitors for five consecutive years and the highest-ever figures for visitor spending at £22.1 billion, it’s not difficult to visualise the potential growth for your business.
So how do you maximise this opportunity and meet consumer demand in new markets with a low-risk approach? Our successful, high-performing clients take an integrated dual approach: they adopt a marketplace strategy; and they globalise their websites.
Here, we’re going to concentrate on marketplaces. From Amazon to Zalando, online marketplaces empower consumers by providing them with choice: they can shop whatever, whenever, wherever and however they want. It’s a powerful proposition. A study from the Ecommerce Foundation forecasts that online marketplaces will own nearly 40% of the global ecommerce market by 2020. 85% of ecommerce transactions in China and 83% in India occur on marketplaces. It’s not hard to see why.
Marketplaces open retailers up to an entirely new stream of consumers: those not familiar with your brand, with more allegiance and trust for a platform they are comfortable with, in their local language, and where their buying information is already stored for speed and…