Businesses looking to expand have a lot of options because of the rapid growth in ecommerce sales worldwide and digital adoption. The numbers make it clear : Ecommerce will account for nearly 20% of global retail volume by 2021. Global ecommerce will reach $6.2 trillion by 2023. The majority of ecommerce growth is expected to be in Latin America, Central, Eastern Europe, the Middle East, and Africa.
It's easy to see why this shift is happening in real time -- new ecommerce clients log on every day. Let's take Europe as an example. The digital adoption rate rose from 81% - 95% in 2020. Similar acceleration was seen worldwide as people faced new challenges caused by the coronavirus epidemic.
Ecommerce is expected to grow rapidly, making expansion even more appealing. Businesses have the opportunity to reach new customers, create new partnerships, increase revenue, and be a global brand.
Given the enormous growth opportunities, why isn't there more globalization? Businesses are often prevented from expanding their reach by a few real obstacles. These are some of the barriers that companies often cite:
Localization. Website translation, adapting payment options, and lack of market knowledge are all obstacles to fitting in to a new market.
Compliance. It can be difficult to navigate the regulatory and tax environment in different jurisdictions.
Shipping and Customs. Businesses often have trouble selling cross-border because they cannot manage duties, tariffs, and return costs.
Accepting payments. It takes months of teamwork across the organization to launch local payment methods. This includes legal, business development and engineering.
Managing customer support. It takes careful planning to meet customer expectations, generate word of mouth, and protect your brand from the distance.
Many businesses find it difficult and costly to address all these issues. Globalizing is a huge undertaking. You don't need to do it all alone. These challenges can be overcome with the help of a partner and smart planning.
Learn more:
Three Steps to International Ecommerce Growth
Before you travel across borders, there are many things to think about. A basic strategy will help you to take a thoughtful, thorough approach before you venture across borders. BigCommerce has partnered up with Stripe, a worldwide leader in payments infrastructure. They enable businesses to accept payment in 195 countries as well as dozens of local payment options when using Stripe . Stripe suggests a three-step approach to going global. This helps businesses evaluate their options and make smart decisions about international growth.
Step 1: Evaluate
A map is a great way to begin any adventure. You might be tempted to pick the closest countries or most developed areas where ecommerce is strong. However, it is possible to look at markets all over the globe and identify your path to expansion by taking a wider view.
It is important to consider not only the current market, but also where it will go in order to make a decision. In 2021, India, Brazil and Argentina will see 26% growth in ecommerce. Asia-Pacific will account for 61% in retail ecommerce worldwide, compared to North America's 20%. 94% are not Americans as of 2021. This means that you can see more opportunities for growth.
Let's take a look at some of the regions that you might be interested in and the key numbers that will impact your decision.
North America
- Canada
- GDP $1.7 trillion
- 37 million population
- Annual B2C ecommerce sales of $52 billion are expected to grow at 15% by 2020
- 83% adoption of credit cards, 86% adoption of smartphones, and 33% ecommerce flow through mobile
Top countries in Europe and the Middle East, Africa
- The UK
- GDP of $2.8 trillion
- Annual B2C ecommerce sales of $233 billion, rising 11% annually
- Mobile shopping: 55% off
- France
- GDP of $2.8 trillion
- $106 billion annually in B2C ecommerce. This is growing at 13% per year
- 39% of people buy online via their mobile phones
- Germany
- $3.8 Trillion GDP
- $108 billion annually in B2C ecommerce
- Buy Online via Mobile: 50%
Asia-Pacific's top countries
- Australia
- $1.4 Trillion GDP
- Ecommerce growth rate of 13%
- With 4 out of 5 in-person payments, the World Leader in Contactless Payment Adoption
- New Zealand
- GDP of $205 billion
- Ecommerce growth rate of 10%
- 91% internet adoption
- India
- GDP of $2.7 trillion
- Population of 1.4 billion
- Annual growth rate of 26% in ecommerce
- 43% of people buy online via their mobile phones
- Indonesia
- $1 trillion GDP
- 269 million population
- Annual growth rate of 31% in ecommerce
- Split payments: 35% cash, 42% transfer, 10% wallet. 5% credit card. 3% convenience store. 5% other.
- Japan
- $5.2 Trillion GDP
- 126 million population
- $183 billion B2C Ecommerce, growing 7.7% annually
- Adoption of credit cards at 85%, 79% smartphones adoption, and 42% of ecommerce through mobile devices
Top Latin American countries
- Brazil
- $1.9 Trillion GDP
- 210 people
- 89% mobile adoption
- Mexico
- GDP $1.2 trillion
- 126 million population
- Annual growth rate of 34% in ecommerce
You'll need to compare and take into account the following when you are taking stock of various markets:
- Market size. What is the ecommerce GDP for that country or region? What are the market's growth projections?
- Market attractiveness. How many people are in your target demographic living in a market? Do you think that this number will grow? What is the country's rate of digital adoption? What is the competition landscape?
- Easy entry . There are many factors that affect the costs and logistics of doing business. These areas will help you to understand how complex or simple each one might be in your new market.
- Localization requirements
- Data regulations
- Shipping partners
- Considerations tax
- Cross-border regulatory environment
After an in-depth evaluation, you will be ready to make a strategic decision and begin selling in a new marketplace.
Step 2: Launch
It's time for you to launch once your cross-border market has been chosen. It is crucial to make sure that your company is ready for cross border transactions when you begin doing business in a foreign country. These are the things you need to do to ensure your success:
- Provide local payment options that are familiar to your customers. Payments are personal. Customers want to be able to pay using payment methods they are familiar with. 16% percent of shoppers will abandon their shopping cart when their preferred payment method is unavailable. Stripe data showed that businesses selling to customers in Germany, Belgium Netherlands, Poland, Austria and other European countries saw an average 40% increase in sales when they switched to European payment methods. These can be easily turned on by anyone who works with Stripe and BigCommerce.
- Optimize your checkout process. Customers will leave regardless of where they are doing business. While your checkout may run smoothly at home, customers may find it difficult to use in another country. Responsive forms that adapt to different address formats will make your checkout process seamless. Also, ensure your site provides real-time confirmation that network acceptance is available across all banking systems.
Other important areas worth your attention:
- Respecting local regulations such as the General Data Protection Regulation in Europe and Strong Customer Authentication in Europe.
- Management of taxes, particularly Europe's Value-Added Tax
- Managing customer support
- Shipping and Customs
These issues can be very complex for businesses to navigate in a new area. But, you don't need to do it all yourself.
Step 3: Optimize
Now that you have opened your international business, it is time to improve the performance of your operations. You can now focus on maximising your revenue and minimising costs.
You might consider opening a local business.
Although this option is expensive, it can be a good idea for your business as you grow. Although you can do much online, having a physical presence in the area you are serving will help you increase your revenue and provide local expertise.
What are the benefits of opening a local shop on the ground? There are significant savings in transaction costs. Domestic transactions are authorized at 10% higher rates than cross-border transactions. Cross-border fees are eliminated in domestic transactions, which can help you save more than 2% on $100 transaction .
You also have the advantage of hiring locally, as you can tap into local experience, knowledge, and expertise. This can help to create better products and market. This can ultimately help your company build deeper relationships with customers and increase brand loyalty.
Wrapping up
Globalizing your business is an exciting opportunity for growth. The challenges of venturing outside your borders are not insignificant. They can be complex and hard to unravel.
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