Globalization has been the way of the world for the past several decades, and it is becoming a bigger element of international e-commerce with each passing year.
Thanks to a rising middle class in countries like India and China, as well as better internet access in various South American and Southeast Asian nations, more people have the luxury of shopping online and buying goods from around the world. This provides a lot of potential for online retailers to capitalize on, including increasing their sales and gaining loyal, engaged followers across the globe.
Why you should be a part of the global e-commerce world
With cross-border e-commerce, customers can obtain items of higher quality, explore foreign luxury products like wines and watches or simply purchase things they can't find locally. More people are catching on to these benefits, as evidenced by the fact that international e-commerce markets are growing worldwide. According to IT Pro Portal, cross-border purchases accounted for $230 billion of the $22 trillion e-commerce sales worldwide in 2015. Researchers expect that number to grow by 20 percent annually to reach $1 trillion by 2020, representing 30 percent of all business-to-consumer e-commerce sales.
Numbers also look promising when you consider individual markets. For instance, research from eMarketer revealed that international online shopping is increasingly popular in China. This year, 15 percent of the nation's population is expected to buy $85.8 billion worth of products from foreign countries. That 15 percent is predicted to increase to 25 percent by 2020, and sales will grow to $156.7 billion. Meanwhile, according to Practical Ecommerce, 83 percent of online shoppers in Australia shop internationally. This is primarily because they do not have to pay customs duty or taxes for purchases less than AU $1,000.
With such market potential and the ability to reach eager new customers, every business should strive for international sales.
Getting ready for foreign markets
Before diving in and accepting online orders from another country, you need to start with an understanding of your new target market. How do these consumers like to shop online – through a marketplace or directly from a retailer's website? Do they expect sales to coincide with certain holidays? For example, Americans expect to find great deals during the weekends surrounding Memorial Day and Thanksgiving, while Singles Day sales are becoming major shopping events in China. Anticipating these and other cultural norms allows your business to design effective marketing and sales campaigns.
In addition to an understanding of your target market, you need a website that's accessible internationally. Language is the largest and most obvious barrier to cross-border e-commerce, but there are other elements to consider, as well.
To start, your business needs to accept the payment types that are common in specific parts of the world. By localizing payment types, customers don't have to spend time converting currencies based on exchange rates. They can also pay for products in their preferred format. Chinese consumers can use UnionPay while the French can pay with Carte Blue. An international payment processing company that deals in foreign currencies is the best way to accept credit cards and electronic payments worldwide without hassle.
Another factor to consider is the form your website uses to collect a customer's personal, payment and shipping information. This form needs to be structured for local addresses, not the ones of your parent country, and achieving this change can be as simple as swapping one word for another. While "state," "province" and "territory" all have a similar meaning, using the wrong word may be confusing to consumers in different countries. For example, you’re more likely to see "province" on a Canadian form, while "state" would be more widely used in Australia (though both countries also have territories). Similarly, asking an American to select their "province" may be confusing, where "state" is the appropriate term. In the UK, many forms may ask for "county" (though typically this is optional), while in Switzerland, they may refer to a "canton." In the same manner, Australian forms are likely to request a "suburb," rather than a "town," as well as a "postcode" in place of a "zip code," or a "postal code."
If you do not have the budget to create separate forms for various countries, incorporate enough fields and different terms into one form so international customers do not get confused. For example, the fields mentioned above could be combined to "Province/State/Region," as the latter would include areas such as "cantons," "counties," and "territories." "Zip/Postal Code" would also be an accepted field to target American and Canadian customers in one shot.
Effectively capitalizing on cross-border e-commerce takes time and determination, but the benefits of an increased consumer base and higher sales are ultimately worth it.
Brought to you by PacNet Services, your one-stop global payment processing solution.