E-commerce is becoming more and more of a global playing field, with cross-border sales forecast to be in the region of $630 billion by 2022. Consumers are searching and comparing products from international retailers from all over the world – looking for the best deal or trying to access a sought-after product they can’t find in their home market.
Overseas expansion could take your business to the next level – however the route to becoming a global player involves overcoming certain hurdles.
What are the chief hurdles of selling overseas?
To succeed at cross-border trade you need to firstly identify the right markets for your business. Then it’s a case of enlisting the right tools, resources and strategies to establish a firm foothold in your new locale. Six chief hurdles are
- Selecting the right target market
- Getting your pricing and inventory strategy right
- Finding a trusted logistics partner
- Communicating in a local language
- Understanding cultural implications
- Keeping international transaction costs as low as possible
Language and cultural considerations
It’s important to think like a local customer when selling into a different county – if you are to position yourself correctly.
Language really matters – nearly three quarters of people won’t buy from a website unless it’s in their own language, so you need to ensure your listings and/or site is localised for each region. It’s also important to provide prices in local currencies and remember to translate measurements too – to increase a potential customer’s confidence in doing business with you.
You’d be surprised how many of the biggest companies have fallen at this hurdle. For example, Nike used a design on the back of their shoes that closely resembled the Arabic word for Allah. This was picked up by a Muslim distributor – and they subsequently had to withdraw their shoes from the MENA e-commerce market – making it a costly case of ‘back to the drawing board’.
Think about logistics before you proceed
Finding the support of a reliable logistics partner is invaluable when you’re starting out abroad. You could consider using marketplaces – they’re seen as trusted places to shop by many overseas consumers. Take Amazon, for example, a place where much cross-border shopping already takes place. They can help you store inventory, fulfil your orders, provide local customer service – as well as handle returns. This takes away huge logistical challenges in a new region. Relying on a fulfilment service like Amazon’s means your customers can expect fast, efficient delivery – along with a greater likelihood they’ll buy from you again. But whatever delivery options you can offer be upfront with your buyers before they get a nasty surprise at the checkout.
Finding a low cost international payments solution
The prospect of high transaction fees and having to navigate your way around different currencies is off-putting for businesses thinking of expanding abroad. You can skip this hurdle by finding a payments partner that offers low fees and add-on services specific to cross-border trade. Payoneer offer a range of highly affordable services to help businesses handle their international payments when expanding into new markets overseas.
If you’re thinking of selling into the US, Europe, China, Japan, Canada or Australia, you can use Payoneer to set up a virtual bank account in any of these countries. These free local receiving accounts make it easier to get paid by international companies. For them, it’s as if they were sending a local bank transfer. Once you receive your payments, you can withdraw in your local currency.
Taking the leap into overseas e-commerce could be the best thing you ever did for your business. But don’t jump blind. Work out whether there is a market for your goods – and where – then develop a localised approach. And be sure to have a reliable logistics and payments partner onboard.
For a more in-depth look at the hurdles you could face when starting your overseas expansion download our eBook “Cross-Border Trade: Time to Expand Your Horizons?” now. Or you can read Payoneer’s Global Payment Service blog here.
Guest post by Payoneer