E-Commerce 101: Selling Online to Foreign Markets

Before the digital age spread thoroughly into our lives, commerce was less dependent on regulations and business law, let alone search engine trends. Today, selling products to people that are thousands of miles away from your warehouse requires a lot more planning and analysis before acting.

Pushing your e-Commerce business to foreign markets

Quality products are the base for a successful business. But even strong brands fail when they try to upscale their business, especially abroad. Why does this occur, and how to prevent it from happening to you? With this article, we aim to explain how you can manage and expand your eCommerce plan on foreign grounds.

Analytics

In a distant country, there is a person who would love to buy your items, if only he knew about their existence. But how do you reach out to such potential new customers? Start by checking your website traffic and sort visitors by location, age, and gender. You can use a report such as this to create a profile base and segment your audience further. Your starting point should be “Audience >> Geo >> Location” and then carefully apply segments to filter repeating features or behavior.

It doesn’t have to be Google Analytics per se – if you run a custom commerce addon dedicated to conversion metrics, feel free to use that instead. Before you examine metrics by putting them side by side, focus on each factor separately. Cross comparison gives a more in-depth analysis, of course, but knowing what each parameter stands for is critical for getting meaningful insights.

To determine how traffic metrics contribute to revealing a critical point, try targeting specific questions about your online audience. For example, if you find out that your Chinese visitors tend to leave your site often, it’s best to examine your report data through a ‘looking glass.’ Maybe your shipping company has a bad regional policy in Asia, or people are getting stuck at the checkout phase because of an option they don’t understand. Maybe some of the more popular shipping methods are not included, and they should be.

When a single metric starts showing unusually high or low values, this is only a symptom indicating a more serious underlying issue. Veile problems such as this are hard to detect, but simultaneously most revealing about potential ways you can use to maximize your eCommerce potential.

Qualitative Analisis

Large quantities of analytical data are a great source for detecting trends, but they may prove insufficient when trying to segment your target audience abroad accurately. That is where qualitative analysis comes into play. If you suspect that your shoppers are leaving the site for no apparent reason, try adding a short survey on exit pages and checkout stages.

Maybe the remote region you are targeting has hidden custom fees. Analytics won’t reveal such problems, and it will only hint about their presence. The rest is about being proactive and with your customers and learn about what’s ruining their purchase journey.

Reducing Culture Conflict

Expanding your online presence to another country takes an approach that differs radically from that set by national marketing strategies. While local customers might prefer your product because of an attractive price, winning foreign customers requires more trust-building first.

Societies abroad tend to have different views on important matters like gender equality or power distribution. Some cultures favor traditions over innovation. Others adhere to less strict social norms and are more open to modern approaches. The Western World is thought to be focused on individualism, while the East is more concerned with the collective benefit. When a product line extends to cover distant lands, there’s always a potential for cultural conflict.

Any expanding business demands a significant preliminary investment. Such investment may cause initial stress on trade, but it is justified when revenue eventually increases with volume. Check your surroundings: if your company operates from the USA, and you thought about expanding to Asia, it’s a good idea to try to probe for geographically close customers first, like Mexicans or Canadians. Investigating adjacent markets would give you the confidence and expertise to expand further.

Moving products to untapped regions can seem like you are starting from the bottom. When nobody knows your product yet, you could either adopt the reputation of a newcomer or approach the local owners and try to extend your business using the trust they already have created locally by offering cooperation. Open-minded marketers are always open to potentially beneficial new partnerships.

Keeping up with Business Law

International market advancements are naturally restrained by the commerce rules that apply to a specific location. Some regions, like Australia, for example, require additional permissions for marketers to ensure they comply with the local regulations. Learn about all the necessary legal documents and avoid unpleasant surprises on arrival. A thorough legal documentation check should be part of your strategy to move your products abroad.

The GDPR, European regulation that is in power since May 2018, directly influences eCommerce. As a provider and data controller, you are also the protector of your customers’ personal information. Even if 99% of your export is within the EU, before this regulation was present, users could be redirected to a different domain solely based on their IP. That’s not the case anymore – reading the rules and regulations from this act can prevent a lot of unnecessary damage to your business and reputation.

Localization and Culture

Netflix started in the US and moved to Latin America before targeting the rest of the globe. They grew by carefully expanding on adjacent grounds first. When you work towards adapting your online business to a different country, first consider all the various factors that need adjusting: currency, payment methods, language, logistics. When the foreign market is sensibly different from your local one, it’s best to translate any piece of information on your eComm site that reaches customers: confirmation emails, pop-up greetings, regional trends, discounts.

International customers should be comfortable when browsing your wares from anywhere. Your website should exude trust, and that involves a lot more than security protocols. Showing content in clients’ native language is essential. Most online shoppers are likely to leave a website if their language is not supported. For commerce that operates in multiple countries, you may consider turning your home page into a multilingual portal. AI comes in handy - you can use it to redirect your clients to their regionally closest portal. Be careful, Geo-targeting in some other cases can be considered a breach of privacy rules. GDPR and business law are the main factors concerning the legal standards of commerce. However, if a local culture puts a veto on a specific practice directly connected with your business, you better learn about that before building your landing pages.

Customization

Supporting native language in web stores is convenient but does call for additional maintenance. The SEO meta tags of your multilingual site need manual adjusting and could be subject to frequent updates.

SEO has a unique value in global eCommerce and should be part of your strategy to conquer new markets. Google is still the most powerful search engine but is far from the best for every scenario. When targeting a specific location, it’s a good idea also to probe some of the local search sites. For example, if you are targeting China, try to explore Baidu more and rely less on data from Google. Don’t blindly follow global trends. Instead, research what goes within the circles of your target group and try to use that to your advantage.

When you adjust your marketing strategy to match the environment of a foreign market, the process naturally goes beyond mere translation – further research is always necessary. For example, in some countries, the checkout phase requires a tax number (Brazil); for others, it’s more important to get the first and last name of the client (Japan). Solutions for language support are available through known addons made within popular commerce platforms. But in most cases, custom web development in eCommerce is necessary.

Another common customization mistake is the use of short input fields for customer addresses and other information. Or allow clients to enter their data in the wrong format. Zipcodes and addresses can be substantially different across regions, and in some places, the streets have no names but are numbered, like apartments. About one in every five checkouts have the confirmation of the address stored in a different order than the original. Imagine the problems arising due to the wrong address or zip code during delivery. Try to minimize errors related to submitted data by predicting every detail about every step the customer goes through. Every piece of relevant data about clients, or provided by them, should be neatly structured and stored.

If your multilingual site supports a search option, it’s best to include autocorrect for misspellings for all supported languages separately. You would be surprised how often people will move on to the next provider because they misspelled a search query, didn’t notice, and possibly also blamed it on your ability to facilitate their browsing habits.

In countries where people read right-to-left, the Z shaped human eye movement across content is inverted. Such factors are part of the reason behind why one in every four visitors would leave because of clunky navigation. Excellent customer experience comes as a result of flawless UI and through proactively fulfilling the expectations of your buyers.

Payment Gateway Options

Around three-quarters of online shoppers leave before checkout, and 16% do so because they don’t see their preferred payment method.

People like to spend using their local currency. Products price lists and discount policies need to be adjusted to reflect on that trend. Supporting foreign currencies increases sales potential but, exposes you to a set of complications. Exchange rates might interfere with the profit margins. To counter that, use a third-party vendor for handling conversion and exchange rates. This move can be especially beneficial, specifically if the support of a wide variety of currencies is a necessary option.

Once establishing a firm hold on foreign markets, you can further reduce cost by localizing the profit. What better way to display a global success than by setting up a physical office in a new region?

Logistics

Online Commerce, when furnished with outstanding web usability, turns the dry process of buying into a pleasant journey. Good customer experience involves an optimized purchasing process. We use the best possible techs and hope they save us time and money. However, one aspect of commerce is traditionally remaining somewhat outside the reach of digital solutions: logistics.

Let’s suppose the foreign market accepts your product. Are you prepared to deliver it, and at what cost? Do you manufacture your products, or are you more of a reseller? If your products are unique and you can only produce them at specific locations, you should consider international shipping. For all other options, outsourcing your workloads will help tremendously.

For products that highlight brand quality, setting local manufacturing is expensive, but it helps build awareness and is justified in the long run. Alternatively, you can stock your produce at warehouses that are available for rent. If you can’t afford to produce your items on the spot right away, renting a warehouse is a great way to enable your local products to be quickly delivered to your foreign customers. When using a local warehouse for distribution, your customers don’t have to pay for import tax, which makes it very convenient for them.

International freight carriers like DHL or UPS have accurate shipping cost calculators that will help you set up the final price. Some packages are evaluated based on volume, others - weight. Knowing which rule applies derives from specific product details like dimensions, fragility, net weight, and value. Each of these factors, and more, varies by country and must align with local regulations. For example, shipping with UPS, max weight for boxes is 70 kg and 25kg for parcels (EU) and 31.5 kg for the rest of the world. These are only standard values. There are always exceptions, and these must be checked individually.

from A to B

Free shipping is an option most shoppers of today expect by default and will consider canceling their orders if they don’t find that option. Not only that, but half the shoppers will bail out if they find the shipping fee to be too high. Unfortunately, to afford free shipping as a service, you must aim big. The increased revenue from selling on a global scale will eventually unlock this possibility.

You can facilitate preferential rates by letting the customer cover a minimum purchase value. You can justify this price increase by guaranteeing the quality of the service you provide. Communicate these policies with your potential clients early on to reduce ambiguity and avoid lost opportunities.

Standard practices show that a clear delivery charge plan is one good way to earn the trust of your future clients. Precise shipping details must be part of the scheme, along with quick-response support services, easy return policy, tracking information.

Having a good return policy in place is a big plus, primarily due to the sheer consequences that arise from a bad one. People generally will give up on a sale if they are bothered too much with web forms or having to bear long delays in delivery or refund. Clear and optimized Return Policy and Free Shipping are a must-have for any successful foreign marketer.

Suppose you bought something online but decided to return it. Do you know how big of a problem you just created? Even experienced store managers don’t always know how to handle returned items properly. Did the client undervalue the product subjectively, or is there a product flaw, and the ordered item should be discarded? Whatever the answer to that question, note that most shoppers would expect the return process and refund resolution to be ready within days. Or risk losing them to your competitors, and what’s even worse – ex-clients telling their friends about how unhappy they were with your services. For example, imagine the embarrassment when you find about hidden costs through a customer’s complaint. Prognosticate about possible additional expenses linked to most shipping scenarios. Act quickly and avoid receiving angry letters or even losing your position in the market.

Statistical data that help answer the question “Why shoppers leave?” can be found in abundance. However, using this data in any meaningful analysis can be overwhelming. The various reasons for abandoned shopping carts can be categorized by importance and are, in effect, valid arguments that shoppers consider when evaluating shipping and handling.

If you decide to exclude delivery duty fees from your product total price, products will appear more attractive, but possible miscalculations or pending legal penalties don’t always justify having them. Being honest with your clients about how you compose the end price is better than losing them forever or, at the minimum, ruin your profit margins. When calculating customs duties for foreign goods, apart from quantity and value, essential to note is their classification, and if they are insured. Product classification is part of a system developed by the World Customs Organization. Data found in their charts can be invaluable when forming the final price for your product.

To improve international commerce within the EU the European Commission has proposed improvements related to eCommerce that are expected to take effect in 2021. The rules are designed to alleviate tax handling by e-commerce merchants and to enable thousands of new business to sell online. Business owners will be able to handle VAT obligations via a universal portal, and that is set to reduce frauds with VAT misuse. As a result, more products are expected to become available for customers in affordable prices.

On-site Management

Enterprise Resource Planning applies well to international market operations. ERP is a management system aimed at merging software and technology into a working solution for online business. Reducing manual labor, for example, is part of the plan for ERP and lies on the to-do list of many concurrent companies. Such back-end software helps you understand all the relations and mechanics that support the smooth flow of your business procedures. Invisible to your customers, this system is the source of ideas about better budget planning and process optimization. ERP is cloud-based and is a unique source for insights about the state of your business and how well each process fits in the big picture.

It’s always good to use the management system that allows for customization than to be stuck with the crude policy of your otherwise preferred vendor. You can run a multi-site store, accommodating for regions and language preferences. Still, they should be all managed from one place, with the help of addons explicitly designed to synchronize data about your inventory throughout all your online stores. Through using a tool like this, you can easily update every shop clone to match the product description of your main store.

There are also specialized tools for stock handling, like Inventory Management Systems. IMS shows the status and location of your products in real-time and is an excellent example of how AI can be your best warehouse assistant. With automatic reporting enabled, you will be able to predict the immediate future of your stock availability with the accuracy of a real expert.

Warehouse management also supports apps that can tell your delivery staff the exact location of the item that needs to be picked and delivered. Thanks to such tracking metrics, the delivery process time is significantly reduced, and you can even monitor the efficiency of your delivery agents.

About Marketing

Angry shoppers have a short temper. When they encounter a problem with your commerce site, they would tell you about it, but only if you let them do that on time. Feedback channels restricted to online web forms and “contact us” links won’t do. By the time it takes to send and receive an email, the client would already be elsewhere. To reduce the number of unsatisfied clients who leave in a hurry, use tools that can establish an immediate two-way connection. Live chat can connect clients with staff with the speed of an instant messenger. Chats or site messengers can be used to retain visitors who otherwise would leave - and what’s most important - without telling why.

Customers will readily engage with in-built chat functionality, knowing that someone is there to address their request or question immediately. When it comes to problems with the shopping cart, time is of the essence. Customers might be about to checkout with your item, but they have considered a few options beforehand – any problem on your site will make them move to their next targeted item. Therefore, it’s essential always to be there to help your visitors on time and readily counteract any possible difficulties.

Social channels and especially customer reviews, are a big plus for commerce because they increase product popularity through organic traffic. There is nothing better for advertising a product than people talking about it. There are 200 million social media users in India alone. Testimonials have some of the most influential marketing value for people and search engines too. A kind word from a happy customer can be directly responsible for creating best-selling products.

eCommerce on a global scale

Opportunities for global eCommerce are abundant in 2020, and they can be found in unexpected places. China is still a prominent global exporter, but many Chinese are willing to pay extra for outside-the-border quality items. With eCommerce booming in 2020, it’s a matter of time before smart marketers apprehend the growing market potential of China and India.

Although cost is an omnipresent factor for making global strategies for expanding, a customer-centric approach should be the leading undertone of your initial course of action. The bigger you get in commerce, the more cost-efficient options become available.

Aim big, but start small, and gradually explore new grounds that become available on the next step. Let your future foreign clients know that you understand their needs, and selectively pick technologies that help you deliver.

Author

Andreas Maier, CEO

Andreas is a result-oriented CEO who brings nearly 30 years of experience gained in the high-tech industry. His experience ranges up to leading positions in Fortune 100 companies such as rentalcars.com (PCLN) or Intrasoft International, a leading EU based R&D software vendor. He holds a Ph.D. in Neural Networks from the University of Cologne, Germany.
In the past Andreas has successfully founded and co-founded several startups among others XXL Cloud Inc., eShopLeasing Ltd, and WDS Consulting SA. His expertise is strongly focused on modern headless Commerce and the optimization of processes in IT ecosystems.