This article appeared in the Fall 2018 International Issue.
When the history of e-commerce is written by scholars in the future, it will be first and foremost a global story. Beyond the technology that has fueled it — and the convenience it has created for consumers and companies alike — e-commerce has fundamentally altered the global economy, along with preconceptions about the limits of international trade, and even ideas about the world’s social fabric. So, for those US businesses that have invested heavily in domestic online sales, it’s time to consider the real power behind the internet: its ability to connect the entire world, while at the same time making its merchants and citizens more powerful. It is time to forge a global e-commerce strategy.
Of course, cross-border e-commerce would not be where it is today without the advances in logistics and transportation that have defined the last two decades. Dedicated international shipping strategies, forged by experts who know complex customs laws and regulations inside out, and new efficiencies in express delivery have made it possible for even the smallest corner store in Minneapolis to sell goods in Madrid, seamlessly and quickly. Again, technology and web-based programs have moved the logistics revolution into hyper-drive. Think of advanced tracking, warehousing boosted by the Internet of Things, and online tools that help retailers arrange their shipping quickly and easily.
The numbers tell the global story very clearly: 2017 saw the strongest year-over-year growth in US domestic e-commerce since 2011, with consumers spending almost $454 billion online. And yet, that impressive figure pales in comparison to the global data: $2.3 trillion in retail e-commerce worldwide last year alone. Consider also that, according to a DHL study, international e-commerce can boost sales by at least 10 to 15%, while increasing average shopping cart values by 70% (compared to domestic e-sales). The potential audience of customers beyond our borders is simply too large to ignore.
To get your global strategy off the ground, or to expand your existing e-commerce marketplace international footprint, here are some key factors to consider:
Preparedness to Go Global
The sheer size of the international marketplace might suggest that you should simply launch your products in new overseas markets tomorrow, with no further questions asked. The reality is that you need to be ready to communicate effectively, ship safely across borders, and ensure your products align with the needs and desires of your new target markets. You need to assess if audiences in new international markets will find value in your products; if your goods are unique enough to prevent imitation from competitors in the market you are entering; and if you can sell and deliver without having to spend excessively to reach the end-consumer.
The Groundwork
Success in new international markets is directly related to the amount of work you do before you begin selling and shipping across the border. It is critical to research market data, including key information provided by the International Trade Administration and Export.gov. Research should drive your creation of an export plan, which should be frequently updated with assessments of your international markets. Your export plan should include sales and marketing tactics, budgets, implementation schedules, and logistic procedures.
Global-friendly Sales and Marketing
To truly engage with customers, you must speak their language — culturally and literally. You need to understand their cultural interests and preferences, and your website, mobile website, social media presence, and marketing materials should reflect your understanding and sensitivity.
Many companies turn to online translation services for assistance, but you may want to enlist the help of an experienced translation agency instead. The wrong words might be ineffective in reaching customers in South America or Asia, and they could even be offensive.
Duties, Taxes, and Paperwork
The border clearance process is often cited as one of the biggest challenges to successful global e-commerce. Your international customers want speed and efficiency in delivery; after all, you will probably be competing against businesses in-country that face fewer obstacles to quick order fulfillment. As a result, you need to understand how to estimate duties and taxes levied by destination countries and how to present this to customers up front in the shopping process. Your shipping partner should have tools and experience to make the process easier.
Did you know that 80% of delayed cross-border shipments can be linked to paperwork problems? To get your products moving quickly to your international customers, it is critical that all of your shipping documents are accurate and complete. Goods must be described fully; for example, if you are shipping “computer parts,” you must use those exact words in the description and the brand name, model, and serial numbers of the parts. Using terms such as “gift” or “parts” is not sufficient and will cause delays. Your shipper and consignee information must be complete and accurate, and you must also properly value the products being shipped.
At the end of the day, e-commerce is all about breaking down barriers. Why should the transactional borders between nations not be one of the barriers that we break?
Greg Hewitt is CEO of DHL Express U.S., where he is responsible for all aspects of the International Express business.
