When Should Your E-Commerce Startup Go Global?

Selling online has enormous advantages over a traditional business model.The main one is the ability to be instantly global, in the sense that your website can be accessed by anyone, anywhere, anytime. However, very few e-businesses take a global approach from the outset or even seriously consider harnessing this potential once they have reached scale in their home market.

Most companies I speak with need convincing that there is a meaningful benefit to going global, i.e. addressing markets other than their home market. It’s particularly prevalent in companies based in Anglophone countries – mainly the US and UK – so much so that I’ve actually given up trying to promote the Russian e-business market to them.

Looking at the great success stories like Amazon, eBay, Google and Facebook, their global ambitions are now quite clear. It’s also clear that if they had started much earlier, they would have secured leading market positions in more key international markets, especially in the emerging-market BRIC countries.

The standard argument is that smaller companies lack the technical, financial and managerial resources to reach into global markets. However, in e-commerce businesses these issues are much narrower in scope than they would be for a traditional business. The more likely reason is that e-businesses tend to be founded by younger and inexperienced people (not only in business but also in life), who have not had time to gain exposure to international business. And when such companies get larger and start bringing in professional managers, the pool they draw from is very thin in international experience. It’s only at the very upper echelons of firm size that they consciously seek globally-experienced managers. By then, in many cases, it’s too late.

Speaking about resources, entering emerging markets through joint ventures, selling agents or other forms of partnerships are the most effective strategies. Not only are you benefiting from working with an expert in the local market, but that expert can add value to your entire enterprise, not just the local operation. New ideas, new connections, new ways of thinking and even creative adaptions of your product or service are all things that can be applied to improve your entire company. For example, when we launched Shoes of Prey in Russia, we offered the same level of customer care that was extended to all global customers (i.e. only online or telephone contact). But when we started offering in-person consultations, our conversion rate skyrocketed. This experience has convinced the main company to extend their international presence to more cities and also offer in-person consultations in the Sydney head office.

Here’s a brief summary of the pros and cons of e-commerce startups going global:

PROS

  • International is the future: all market studies point to emerging markets as the source of future revenue growth.
  • Taking pre-emptive action: copycats are guaranteed to be working on your copying your idea for their local market if you have any degree of traction or even launch publicity in your home market.
  • Enforces management discipline: working with a joint venture partner requires disciplined management practices, streamlined workflow processes, and regular reporting schedules.
  • Fosters cross-cultural thinking: international contacts yield rich experiences to your management team. Even within domestic markets, the consumer base is very diverse in terms of cultural background. By working in international markets, you can learn how to better market to different cultures within your own market.

CONS

  • Cost: there are definite costs involved in creating the technical infrastructure to accommodate multiple languages, currencies, payment methods and delivery methods, and for translating content. These costs are both upfront and ongoing.
  • Management attention: also involves an initial outlay and ongoing investment to monitor developments in the new market.

How to Get Started?

Here’s a basic continuum of how you could implement internationalization in your website and business processes:

1. Link content pages to Google Translate
2. Serve translated content within your site, using machine translation
3. Serve translated content within your site, using human translation
4. Serve human-translated site content + implement local payment methods
5. Serve human-translated site content + implement local payment methods + customer service (onshore/offshore)
6. Serve human-translated site content + implement localized payment methods, customer service (onshore/offshore) + marketing programmes

My contention is that anything short of  Level 6 is a certain waste of time and resources. Your business won’t be perceived as sufficiently local to compete with domestic copycat counterparts.

Look at it this way: I’m fluent in French but my native language is English. If I came across a site which was only in French, I wouldn’t be immediately turned off but I would have to make an extra effort to understand it completely, and probably would not proceed with a transaction unless there was no other competing option in English. It’s not only a question of understandability and comfort with language, but also the message that having a monolingual site says to international users, which is: you are not an important enough category of customer for me to accommodate your language preference.

Another thing to bear in mind is logistics. In the market where I operate — Russia — there are several internal delivery options ranging from the regular Russian Post, to EMS, to private domestic and branches of the main international courier companies. Customs procedures must be understood for each new market, and the rules tend to change regularly.

And finally, a crucial aspect for international success is in targeted marketing: in emerging markets print, broadcast and social media are largely local. Even if there are local editions of the international print magazines which cover your sector, they are almost certain to be franchises with little connection to the editorial team at head office. Similarly, the most popular TV and radio stations will be in the local language, catering to local audiences. Without a local marketing team to manage your online and offline PR and media campaigns, you stand little chance of reaching the desired prominence. Brand names established in other markets carry over very little of their value into the emerging markets, which is a point often lost on US- or Euro-centric companies.

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Guest post by Leighton Peter Prabhu, an eCommerce consultant specialising in helping companies enter the Russian market. He blogs at: http://russkiebiz.wordpress.com

For advice on how to localise your website and attract international customers, contact us on: sales[at]web-translations[dot]co[dot]uk, or call +44 (0) 113 8150460

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