September 14, 2015
Consumers have become increasingly savvy when it comes to comparing goods and services online and knowing where to buy what, and often look outside their own country’s borders to get the best deal or that specific service that is not available in their country of residence. Therefore, online merchants are expected to sell and deliver their merchandise across the world, resulting in the global expansion of their business. A lot has been written on this subject and, as always with (relatively) new phenomena, there is a lot of contradicting information out there. That is why eMerchantPay have put together a list of what they feel is paramount for any merchant to know when thinking about expanding their business across borders.
This year, the global online trade is expected to grow to a whopping $1.4 trillion.Cross-border e-commerce accounts for roughly 21% of that. Time to get yourself a slice of that pie, we say!
Successful online merchants know when to enter into newly emerging markets. Successful payment service providers know what these emerging markets are. Canada is the world’s leader when it comes to cross-border shopping; 37% of the world’s cross-border shoppers reside here. The other countries that are responsible for the aforementioned 80% are Australia, the UK, Hong Kong, Germany, Singapore, Japan, Brazil, Switzerland, United Arab Emirates, Kuwait and France.
During 2010 and 2011, the Greek online market has been continually growing by 40-50% and both Spain and Italy show a respective growth of 18% and 16% annually1. This surprising trend has not only been seen in Europe, but all over the world. According to the findings of the Credit Suisse Research Institute’s latest Emerging Consumer Survey, the total annual online retail sales across our surveyed markets – Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa and Turkey – could reach up to 3.5 trillion US dollars and impact companies across multiple sectors, including retail, finance, security and technology.
Cross-border online shoppers still prefer to pay with a credit card. But since credit card transactions are prone to fraud and not very anonymous, a plethora of alternative payment methods have been developed over the past few years. PayPal is the most popular alternative payment method by far on a global level and it allows consumers to complete transactions in their own currency. Moreover, it has a very popular buyer protection policy, which makes people feel safe when shopping online. On a local level, other alternative payment methods are sometimes preferred. Make sure you offer the preferred payment method in the country you are targeting to maximise your chances of succeeding.
Do your due diligence before targeting markets outside your own country’s borders. Cultural differences as well as economic or social discrepancies can and will ruin your chances of becoming successful abroad. You need to know the market you are targeting in and out before entering. If, for example, your company name has the number 4 in it, consider changing it before expanding to China or Japan; there the number 4 sounds the same as the word for ‘death’ and is therefore considered unlucky and will hinder your expansion.
Having a knowledgeable, local partner that will help you in the targeted region is every bit as important – if not more – than doing your own extensive research. A local will know about the culture, social structure, payment preferences, local business customs, consumer preferences, logistics and infrastructure, legislation and lots of other things that you won’t be able to read between the lines of the most elaborate report. A local partner can also help you to customise your product and marketing strategy if necessary. Engage a local (company) and prosper.
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