Some 17% of British businesses plan to export overseas by 2025, research reveals (1). Although this figure will be an increase from the current 10%, it still means that over 82% of small businesses in the UK do not plan to take advantage of the vast opportunities available to them in our border-less world of e-commerce.
This could be due to many different reasons: small business owners may be put off by the complexity of offering customers local currencies or languages, or may be concerned by the web of regulations, rates and duties when it comes to shipping overseas. But evidence shows that those small businesses which make goods available overseas are 34% more productive in their first year than those which do not. The opportunities are there, as 66% of consumers are happy to shop online outside their own domestic market, reveals Pitney Bowes’ 2016 Global Online Shopping Study. Doing business overseas gives small businesses the invaluable chance to penetrate lucrative new markets. It’s a springboard for growth, a fantastic opportunity to gain a competitive advantage, and a potential insurance policy against turbulence in domestic markets.
We spend a lot of time advising small business owners how best to grow their businesses, perform better and increase their revenues. Increasingly, the conversation turns to branching out into overseas commerce. Here are ten questions we hear frequently, and how we respond:
Where do I start my journey into cross-border commerce?
A good way to begin your entry into overseas markets is sell one or two products on a global online marketplace. The Pitney Bowes study found that around half the consumers surveyed said that all or most of their online shopping is through an online marketplace – perhaps eBay, Amazon. The top countries in which shoppers choose all or most of their cross-border marketplace purchases are Japan (70%), China (61%), Germany (59%) and India (55%).
Making it easy for your customers to find you and buy from you is a great foundation for your venture into global growth, and selling in these marketplaces is a good place to start.
Who can I ask for advice?
Trade and industry bodies have some sound advice and can help you broker relationships with partners in your target markets. Attending an event or expo focused on the region you’re considering selling into can also help you make contacts, and following or joining trade and investment bodies on digital networking sites like LinkedIn gives you insights into trends and opportunities.
Are there particular markets I should be focusing on?
It depends on what you’re selling, and to whom. There’s a lot of focus on China at the moment with the phenomenal success of marketplace Alibaba and an increasingly high proportion of online shoppers, but consider other markets. Korea, Canada or Saudi Arabia could be great options for you too: one of our retailers saw 55% of their 2015 “Cyber Weekend” sales from Korean consumers due to social media pick-up. Seek out intelligence, data and analytics on locations where your highest proportions of buyers are likely to be located – you’ll be amazed how far you can drill down into who’s buying what, where and when.
How do I localize my website?
Smart software tools and applications can do this for you, recognizing IP addresses and presenting your users with the appropriate web pages for their locality. This way, you’re following the golden rule of cross-border commerce: delivering a consistent experience wherever your shoppers are located in the world.
How can I provide a great service experience when I can’t speak the language?
Integrating local language into your service experience will make sure you provide a consistent, customer-centric approach, and research has found that over 72% of consumers would be more likely to buy a product if they had information in their native language (5). There are free translation tools, of course, but their fluency can be a bit hit-and-miss. Investing in professional translations of your product pages with detailed descriptions and specifications will minimize the support you need to provide. Translating your support portal, including FAQs, will help too. Once your overseas business is more established, you can use analytical tools to identify exactly where your web traffic is coming from and the most popular buyer locations. This is the point when it’s worth speaking to local on-the-ground partners, chambers of commerce and trade associations, to source native language support.
Shipping overseas is complicated, isn’t it – are there any golden rules I should follow?
Staying on top of the different taxes, duties and regulations can be hugely complex and time-consuming, but there are tools and applications which can do this for you. Cloud-based platforms can pull together these tools which will help you quickly and accurately calculate exactly what an item will cost to buy and send, and how long it will take. For your customers, not knowing the full-landed costs can be a major barrier to buying from you. Research (6) has found that higher shipping costs are barrier to purchasing for 64% of consumers, so ideally offer different shipping options (priority shipping or free shipping) and make sure you’re transparent about what consumers can expect to pay.
Are there any ‘banned products’ in certain regions that I need to be aware of?
Certain regions have long lists of items prohibited from entering the country, so you need to familiarize yourself with these and make sure your website doesn’t make them available to shoppers located in those regions.
How can my business minimize the cost of returns from overseas?
Returns can be the chink in the armor of e-commerce, but your customers have every right not just to return items, but to refuse the product at their doorstep – and you’ll end up absorbing the costs. Prevention is the best approach here, and by being transparent and upfront with shipping costs and ensuring your data is precise and accurate, you’ll minimize the risk of undelivered items.
Do I need a mobile strategy?
More and more shoppers are buying online, and this is the case in some markets more than others: in China and India, for example, mobile purchasing rates are some of the highest in the world so if these regions are targets for you, it’s definitely worth making sure in the first instance that your website is optimized for mobile. Your web developers should be able to do this for you fairly simply.
Is there a good time of year to launch products to a new market?
This is where localization comes in again – understanding cultural nuances, festivals and public holidays could impact your business performance. Singles’ Day, Black Friday and Cyber Monday are widening their reach beyond China, the US and Europe respectively as popular online shopping days. Whether or not you want to compete with global e-commerce giants on these specific days is up to you – but it’s worth at least looking at the analytics behind your site to see which regions spend more time online, and when.