Capture The Global eCommerce Opportunity
eCommerce growth continues unabated around the world, with eCommerce being cited as a driver of overall economic growth in markets from China to Nigeria. Indeed, online retail revenues continue to soar in every market that we forecast—China alone will generate more than $1 trillion in eCommerce sales by 2019.
As eCommerce markets in different parts of the globe flourish, a growing number of digital business leaders are being asked to take their brands into new markets. What opportunities exist for eCommerce leaders looking to expand internationally? How are they tapping into these opportunities? Our newly updated report (client access req’d) addresses these questions. We find that:
Brands view the world through a similar lens. eCommerce leaders tend to talk about the importance of different markets in terms of “tiers”; global expansion initiatives involve “waves” or “phases”. We borrow some of this terminology and provide a map in the report of how eCommerce brands typically view the world: “Top-tier” markets include markets with sizeable online retail revenues and developed eCommerce infrastructure (e.g. US, UK, China). The “Second wave” of markets includes those where the eCommerce market size or maturity level pushes them to a slightly lower position on brands' global priority lists (e.g. Switzerland, Indonesia, Mexico). “Wait and see” markets are on brands’ radars, but the current environment or level of infrastructure gives significant pause to those companies that have not yet entered the market (e.g. Argentina, Russia).
Global expansion now involves a mix and match of different approaches. In the past, brands often took a cookie cutter approach to new markets, launching similar localized sites in every market. By contrast, today’s global expansion efforts include a mix of different initiatives. A company may operate direct sites in some markets, ship internationally to others and launch storefronts on local marketplaces elsewhere. In the same vein, brands that have a preferred global commerce platform are not necessarily using that platform everywhere, but rather selecting alternative solutions in some markets that may be cheaper, more flexible or specifically tailored to the country or region they’re entering.
Internal hurdles to success are as big as external ones. Finally, it’s important to understand that internal hurdles are as likely to trip up global expansion initiatives as external ones. Do your business leaders have international experience? Are you anticipating quick payback on your new global initiatives? Are you truly ready—from a financial, technology and cultural perspective—to test, learn and make changes on an ongoing basis as you become smarter about the local environment? It’s critical to be frank about where your shortcomings lie when it comes to running businesses overseas and be willing to challenge thinking around what constitutes a successful business operation.
I’ll be discussing the global eCommerce opportunity at our Summit in Shanghai next month, highlighting best practices in international expansion. We hope you’ll join us!