Global e-commerce is more accessible than ever. According to Euromonitor International, in 2021, cross-border e-commerce sales reached nearly $3.2 trillion — and it’s set to expand even further. Yet, selling in multiple countries is not without risks and complications. With careful planning and execution, retailers can reap worthwhile rewards that outweigh the effort.
Retail TouchPoints just released a special report to help marketers better understand the risks, nuances and must-know details associated with taking business abroad.
Pack Your Bags for Cross-Border Commerce
If you’ve successfully sold domestically, setting your sights on international markets might be a logical next step. There’s a potential to reach untapped markets, expand your global footprint and delight new customers with what your brand has to offer. But choosing to scale abroad should never be decided on a whim. Cross-border e-commerce can be both expensive and time-consuming — and sales could even fizzle out entirely without intentional, intelligent planning.
To succeed, e-commerce teams must explore four key considerations of conducting international business:
1. Gauge demand and pinpoint your value proposition first.
While excitement for a new market is good, entering it without caution or proper research could result in failure. Choose foreign markets where you’re likely to have success, and do an analysis of demand to confirm. The resale market in countries you’re considering may be a good indication of latent demand for your products that you could meet with better customer service and product quality. And if there’s already competition, determine how your brand will stand out.
2. Seek out compatible marketplace partners to build an initial foundation.
Even the most prepared retailer lacks the regional expertise of a company that’s been operating there for years. Engaging a partner in the country you want to do business in is a great way to get ahead of important details like last-mile logistics, the country’s retail trends and steps to build brand recognition. Marketplaces make great cross-border partners because of the existing digital infrastructure and install base. When selecting a marketplace, verify the amount of control you’ll have. While some marketplaces exercise significant control over branding, others, like Tmall in China, allow brands to design their own virtual storefront and have a say in the overall customer experience. In addition, choose a partner whose values are consistent with your own so there are no surprises in how you jointly conduct business.
3. Understand challenges that can impact pricing.
Selling cross-border means dealing with a potentially complicated web of taxes, regulations and other fees — and underestimating the costs can inflict a serious hit to your bottom line. It’s not enough to just pass along costs to the customer, as presenting an unexpected fee just before checkout can stop a sale cold. Instead, invest in digital tools that will automatically handle adjustments, and be transparent with your customers about the fees they’ll incur.
For example, Bling Jewelry uses Rithum’s automation capabilities for added clarity that helps them quickly adapt to product and pricing changes, account for currency exchange, reduce errors and more. When adjusting the price in one place, Rithum automatically changes it in every currency within a matter of minutes.
4. Look to China’s mature, rapidly changing market.
In 2020, China’s e-commerce imports and exports reached a whopping $266.7 billion, according to Chinese customs data. The popularity of foreign brands among Chinese consumers makes the country a great target for retailers seeking international growth. However, China is a fast-paced market that requires constant adjustments to keep up with customer trends and new regulations. While investing in the Chinese market can potentially yield high profits, retailers must be ready to act quickly and rely on local support from partners.
Are you selling everywhere you could be? Rithum recently announced its support for more than 300 global channels. Contact us to request a demo and learn how you can take advantage of these booming international markets.
Plus, download the full report to find out which continent poses the next great cross-border opportunity for you.