One of the main benefits of operating a retail business in our connected world is having the ability to vastly expand your customer base. You no longer have to rely on sales from only one specific geographic location. A single store in a small town can sell not just across the state or even the country, but to the other side of the world.
But as many companies have discovered, taking your business global isn’t quite as simple as setting up international shipping options and waiting for that huge sales bump to occur. As much as digital technologies have helped to connect us together and bridge divides, there are still many cultural differences from country to country and region to region that can impact your ability to succeed outside of your home market.
In other words, people just don’t shop the same way in China as they do in America. Or in Dubai. Or even Great Britain. If you want to have success in a global marketplace, one of the most important things to learn is what already works in a particular region – and what doesn’t.
To that end, we’re going to look at the top 5 online markets outside of the U.S. and offer advice on what you need to do to succeed there.
Despite the recent economic downturn, China is still the great white whale for retailers, with hundreds of millions of potential buyers. But how do you reach them? What are their preferences? Turns out they have quite a few, including demanding fast, free shipping (think one or two days), being wary about paying by credit card, and making strong use of social media.
But none of that matters if you don’t do one thing first: get on Chinese marketplaces. A whopping 45.1% of online consumer sales in China happen through TMall. Another 17.4% come from Jingdong Mall. If you are not selling through these marketplaces, you’re going to have an uphill battle.
The country with the third highest online sales may trail #2 (the U.S.) by more than $200 billion, but there’s still a lot of money to be made. Moreover, Brits buy a higher percentage of their products online than any other country in the Top 10. Basically, they want to buy online.
But why? One of the biggest reasons seems to be Amazon. They have a huge market share in U.K. countries, and people there often find it faster and easier to ship through Amazon than going to the trouble of seeking out products on their own.
Other important channels for entering the U.K. online retail space:
- Google Shopping
- eBay Commerce Network
- Rakuten Play.com
When planning to sell in Japan, two of the biggest things to consider are payment methods and shipping time.
Not only do the majority of online transactions in the country not involve credit cards, some use methods simply not available in the U.S., such as convenience store payment. Take the time to learn about alternative payment methods there and what you need to do to set them up.
As far as shipping time is concerned, Japanese customers expect speed. In fact, people in most areas of the country get their order on the same day. Obviously, the only way you’re going to be able to match this speed as an international seller is to keep inventory in Japan, which has its own costs and drawbacks. However, it may be possible to position your products as “luxury” or “aspirational” goods worth waiting for.
As with the U.K., Amazon is the company with the highest percentage of online sales in Germany, so that may be a wise place to focus your initial efforts. Germany, however, has a unique demographic feature that is worth thinking about: the population is aging.
You might think that this would be a bad thing, because we tend to think that older people don’t shop online. Germany is different though. In fact, in a survey just a few years ago, 89% of Germans 50-64 do their shopping online, and 79% of those over 65 also do so. If you have products aimed at an older audience, you may find surprising success in Germany.
Many things about selling online in France are easy. They’re happy to use credit cards or Paypal. They don’t expect super-fast shipping. And they’re increasingly keen to buy in overseas markets.
But they do have some expectations. Number one is that they want you to sell to them – and deal with them – in French. Number two is that they expect efficiency and reliability, and may require extensive information and reassurance to assure them that their items will arrive on time and in good condition. And finally, you may want to look into alternative shipping options, such as the increasingly popular pickup point delivery, where shoppers pick up the items they’ve ordered at a location close to home.