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4 Reasons Why Digital Commerce Businesses Fail to Expand Globally

Reading Time: 6 minutes

Did you know that the population of France spends an average of $1946 per capita, or that shoppers in Mexico splash an average 17.31% of their salary online? The prediction that digital commerce sales are going to hit $4 trillion by 2021 is looking pretty accurate, yet businesses are still shying away from expanding into new markets (or worse still, are trying to make a play for the global market, but failing miserably!) So why is this the case? Are businesses fighting a losing battle when it comes to going global?

Well, the good news is that there is plenty of success to go around, as long as businesses can overcome the 4 most common obstacles standing in their way of global domination.

Reason #1: Waiting for the ‘right time’

There’s no doubt about it – timing is absolutely crucial to the success of taking your business global. Not time. Timing. Because the time will never be right! One of the most common reasons why businesses fail to expand into new markets is that they are waiting to perfect the online store in their home territory before making a move to new pastures. However, as we all know, the eCommerce landscape is one that is constantly evolving and changing – your online store is always going to be a work in progress if you want to keep up with customer demand, as well as stay on top of emerging industry trends.

But breaking into new markets is anything but a ‘copy and paste’ job – even if you have a high-performing online store in the UK that’s as optimised as can be, it doesn’t mean that you can clone the formula for China and expect the same results!

The most successful businesses don’t wait to break into new markets until everything is picture-perfect. Instead, they use cross-border trading as a channel for growth by exploring less competitive markets and utilising them to compliment their home territory’s offering. For example, if you’re a fashion brand based in the UK, there’s no reason why you shouldn’t be using online marketplaces such as Mercado Libre in South America or The Iconic in Australia to shift your overstock at the end of the summer season.

Ever heard the expression ‘if we wait until we’re ready, we’ll be waiting for the rest of our lives’? Instead of waiting for the perfect time to go global, start focusing on the strategic timing of when and how you’re going to make it happen.

Reason #2: Diving in without a clear strategy

Breaking into new markets certainly isn’t something that you can dive into head-first and expect winning results, yet so many businesses still apply the approach of throwing everything at the wall to see what sticks. Ironically, this is often down to not having the resources, the time, or the technology to formulate a clear strategy – aka the single, most important contributing factor to the successful expansion of your online business!    Without a clear strategy, you’re not going to get far (*correction – you’re actually going to be eaten alive…)

Before you even consider going global, spend time researching the markets that you’re interested in – gather industry and consumer data, pull together competitor analyses, and familiarise yourself with the legalities associated with trading in each new market or country.

Then, build a business plan that’s specific to growth in new regions that includes all of the following:

  • The ‘WHERE’: Territories to explore (e.g. do you want to break into one new market at a time, or several at once?)
  • The ‘WHEN’: The predicted timelines for getting each project over the line.
  • The ‘WHO’: The resources that will be required across multiple departments both internally and externally (staff, technology, budget, etc.)
  • The ‘HOW’: The ‘go-to market’ roadmap – choosing the sales and marketing channels you’ll use.   
  • The ‘WHAT’: Your overall business goals – what return you expect from cross-border training in 3 months/6 months/1 year, etc.

Don’t forget the importance of the ‘WHAT’. It’s the only way that you will be able to look at your efforts over time and be able to determine what has worked and what hasn’t. Nothing measured is nothing gained, so make sure you set clear business goals from the outset – those goals will undoubtedly change over time, but will ultimately be your barometer for global growth.

Reason #3: Cultural nuances hinder online performance

Sure, we all know that if you want to open your products up to the US market, it’s a good idea to convert your pricing catalogue into dollars, and if you want to trade in France, you should probably translate your website into French. But true localisation goes so much deeper than basic languages and currencies.

Take design, for example. Will the use of specific colours and imagery as well as the overall layout of your online store resonate with customers in Asia or South America the same way that it does in Europe? Or how about payments? Accepting all major credit and debit cards for your international customers at checkout isn’t enough to make you a global player. Because in Italy, prepaid cards are particularly popular amongst online shoppers, while in Poland, cash-on-delivery and online banking are the most common payment methods. If you’re going to be trading in Singapore, on the other hand, it’d be wise to enable NETS payments on your online store.

Same goes for promotions. And delivery options. And – well, you get the gist…different audiences want different things, it’s not even a case of meeting customer demand – it’s a matter of gaining a full understanding of what ‘the norm’ looks like in each country or territory you want to expand into, and curating your online offering to fit appropriately.

If you want to make a real play for global expansion, you have to be willing to not just scratch the surface of localisation, but dig deep into all of the cultural nuances and preferences that exist – it could mean the difference between success or failure of your global efforts.

Reason #4: Technology lets you down

Technology is, without question, the ingredient that will either empower your business to break into new markets or make it impossible to execute.  Limitations within certain digital commerce platforms can often mean that if you want to trade internationally, you’ll need to set up multiple storefronts and manually input your product catalogue for every individual language and/or currency you want to sell in. You’ll also have to make sure that you’re all zipped up as far as taxes, tariffs and VAT rates go, and that’s before we’ve even scratched the surface on the logistics and fulfilment side of things – warehouse management, automated order management, distributed order management, the list goes on. If you don’t have the technology to power your supply chain efficiently, getting your products from A to B (when ‘B’ happens to be overseas) is going to be a nightmare of biblical proportions.

Technology

It really isn’t complicated to open up your products to new markets, as far as technology is concerned. Scratch that – going global shouldn’t have to be so manual as far as technology is concerned! If your digital commerce platform supports multiple languages, currencies and VAT rates, it means having one dynamic online store, rather than a dozen static ones. It also means having an online marketplace connector so that you can automatically list your products on Amazon, eBay, and/or niche marketplaces around the world, rather than having to duplicate your listings across multiple channels. All distribution points and inventory should be synchronised so that orders are automatically fulfilled from the most logical warehouse and location.

Sometimes, businesses believe that they can’t expand internationally due to a lack of resources from a staffing perspective when the reality is that the resources they need in order to scale are actually missing on the technology front. Automate manual processes across the digital commerce journey with the right type of technology, and you’ll be surprised by just how quickly the impossible suddenly becomes possible.

So put ‘going global’ on the agenda because it’s high time that your business was put on the map!

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