The Global Ecommerce Guide - Shopify Plus

1y ago
33 Views
5 Downloads
5.75 MB
64 Pages
Last View : 1d ago
Last Download : 3m ago
Upload by : Allyson Cromer
Transcription

A Shopify Plus publicationThe GlobalEcommerceGuideMap, launch, and scale internationallyLast modified02/03/20

The Global Ecommerce PlaybookContentsYou can read this playbook from start to finish, or click on a section to gostraight to your stage of expansion.The 3-stage guide to going global3Stage 1: Map your global expansion4Are you already big in Japan?Where to next?Finding your fitTesting 1, 2, 3Know the rulesGlobal business spotlight: NanoleafStage 2: Launch your global brand21When in RomeContentsHow would you like to pay for that?Supplying the demandSigned, sealed, deliveredGo global. Not bankrupt.Global business spotlight: 100% PureStage 3: Scale your global business41Laying down the foundationThe global customer experienceMake global marketing campaigns make senseThe automation advantageTapping into booming (and daunting) marketsWe’ll see you around the worldNotes2 / 64

The Global Ecommerce Playbook4.8T85%expected sales by 2021(USD)world’s purchasingpower outside the U.S.They’ve never heard of your brand, don’t speakyour language, and live half a world away. Yetdespite the complexities and challenges ofglobal ecommerce, selling to consumers all overthe world is an opportunity you simply can’tresist. Especially when you consider that salesare expected to reach 4.8 trillion USD by 2021,1and nearly 85% of the world’s purchasing powerexists outside the U.S.2But some of the world’s largest and best-knownmulti-nationals have failed spectacularly whenexpanding abroad.3 That’s why we created thisplaybook. We want you to succeed where othershave failed.The 3-stage guide to going globalThe 3-stage guideto going globalThe Global Ecommerce Playbook is yourstep-by-step framework for going global theright way. Whether you’re just consideringinternational expansion, or looking to scale yourestablished international operations faster,this comprehensive playbook will simplify andreduce your risk.3 / 64

The Global Ecommerce PlaybookStage 1Map your global expansionMap your globalexpansionIn this stageAre you already big in Japan?05Where to next?07Finding your fit13Testing 1, 2, 316Know the rules184 / 64

The Global Ecommerce PlaybookAre you alreadybig in Japan? Google Analytics: View your locations report(Audience Geo Location) for in-depth information about the locationof your visitors. Set up segments to break down international trafficby continent, country, region, or city, and to understand customerbehavior. Use this guide to diagnose global barriers. Ecommerce platform: If your ecommerce platform offers robustreporting, create dashboards that show sessions by country, customersby country, and sales by billing country to find out if you’re engagedin cross-border commerce. Comparing side-by-side segments helpsinform your decision to expand.Are you already big in Japan?International consumers might already be interested in the goods and servicesyou offer, even if you’ve never thought about expanding internationally.Discovering if you appeal to a global audience can help you decide where andhow to expand. You can do this by analyzing current traffic and sales-by-countrydata in your analytics dashboards:Insights like these will likely emerge:IFYou discover European customers bounce on your checkout pageTHENYou might not be offering checkout in local currencies, showing pricesthat include duties, or including the proper address fieldsIFYou discover Australian visitors bounce on your returns pageTHENYour returns policy might not support international purchases or mightlack transparency and detail5 / 64

The Global Ecommerce PlaybookWhen you have a significant traffic from a particular region or country but aren’tconverting visitors at the same rate as in your home country, consider creatinga localized online store and checkout to boost sales.Talking to strangers: exit-intent surveysDig deeper than the quantitative data you’ve analyzed so far. If internationalconsumers are crossing digital borders to visit your site but aren’t making apurchase, find out why through qualitative data. Exit-intent surveys are the bestway to gather this information. Delivery costs and shipping time Unknown customs or duties International returns processesThe responses you receive, especially if they cluster around one or twokey objections, will help you decide whether to hold inventory closer tointernational consumers as part of your strategy.The invisible global customer:freight forwardingA significant number of international orders masquerade as home-countryorders in your reporting. Freight-forwarding services like Stackry, Shipito,and Borderlinx allow consumers to ship purchases to a virtual U.S. address,then bundle and forward them anywhere in the world.Are you already big in Japan?Make it easy by providing visitors with common objections:Identifying these nearly invisible international customers is challenging andneeds some extra digging. To start, mine your order management system forshipping not billing addresses shared by multiple customers. Next, cross-checkthose addresses with popular freight forwarders to identify how many potentialinternational customers you have. Here’s a list of popular freight forwarders.With your master list of freight-forwarding addresses, segment this group inGoogle Analytics by adding a custom data layer to filter international customersusing freight forwarders.6 / 64

The Global Ecommerce PlaybookWhere to next?Before expanding internationally, it’s crucial to understand your potential targetmarkets, including how digitally mature and business-friendly they are.To decide which markets to target, start wide then narrow your focus. The U.S.is the second-biggest ecommerce market.4Russia 19Canada 44UK 93Germany 77SouthKorea 69France 55US 561Japan 87Where to next?China 740Brazil 1610 largest ecommercemarkets (by billion USD)Australia 22Regional potential—the opportunity among several countries with similarcharacteristics—is important when deciding whether to offer a localized sitethat serves multiple countries in a region. Your goods or services might notappeal to an entire region, like Asia Pacific, so your analysis should include acountry-by-country evaluation.For comparison, use ecommerce as a percentage of total retail sales in thecountry you’re analyzing to better understand the appetite for online shopping.7 / 64

The Global Ecommerce PlaybookNearly a quarter of all retail sales in China are made online, whereasecommerce accounts for just 9% of retail sales in the U.S. It’s importantto round out your country-specific growth profiles by investigating twokey potential growth drivers: Penetration: Online shopping penetration by country illustrates whatpercentage of the population has purchased goods or services online.China83%South Korea83%UK82%Germany81%Indonesia79%India77%United States77%Taiwan76%Poland75%Thailand74%Global markets with the highest online shopping penetration rate in 2017 (statista.com) Compound annual growth rate: The compound annual growth rate forecommerce sales by country indicates online purchasing momentum.8 / 64

The Global Ecommerce PlaybookIndonesiaSouth AfricaMexicoTurkeyChinaArgentinaSaudi ArabiaBrazilGlobalSpainAustraliaFranceUnited StatesCanadaSouth KoreaGermanyJapanUnited 6%9.1%8.8%8.5%8.3%7.9%Where to next?India7%6.5%6.2%5.8%Forecasted compound annual growth rate from 2018 to 2022 (statista.com)9 / 64

The Global Ecommerce PlaybookDo your research:country comparisonsThe Central Intelligence Agency (CIA) has compiled key data in its WorldFactbook so you can compare countries side by side. This tool offers aninside look at infrastructure, consumption, and demographic profile, withinformation like: Population groups segmented by ethnicity, language,and religion Demographic pyramids, household income and consumption,and urbanization rates Mobile phone users, internet and broadband availability,and rankingStatistics like these can determine the total market and inform yourdecisions about warehouse or inventory locations, as well as localizedonline stores.26M119M60M38M28M49M64M53M1,003M259M 1,952 1,639 1,101 1,010 601 634 407 118 123 GermanyUnited KingdomUnited StatesRevenue per userEcommerce revenue per user (in USD) and number of users in 2018 (statista.com)10 / 64

The Global Ecommerce PlaybookDon’t make it difficult:ease of doing businessNew ZealandSingaporeDenmarkKorea, RepHong Kong SAR, ChinaUnited StatesUnited KingdomNorwayGeorgiaSwedenMacedonia, FYREstoniaFinlandAustraliaTaiwan, ing-business ranking in 2018 based on the distance to frontier (DTF; World Bank)DTFscoreDTFchange86.55-0.1884.57 0.0484.06-0.0183.920.0083.44 0.2982.54-0.0182.22-0.1282.16-0.2582.04 2.1281.27 0.0381.18-0.2180.80 0.0580.37-0.1180.140.0080.07 0.4179.87 1.0579.51-0.1979.29-0.0979.26-0.7979.00-0.19Where to next?The relative difficulty of operating in foreign regions or countries is knownas the ease of doing business.11 / 64

The Global Ecommerce PlaybookUse the World Bank’s Doing Business report to supplement your country-bycountry assessments, with considerations like infrastructure, internet speed,and bureaucracy.Check to see how quickly the countries you’re considering are improvingtheir business climate. One metric to use is the number of reforms a countryimplemented in the last year to improve doing business there.Identify the factors that impact your expansion markets with a political,economic, sociocultural, and technological (PEST) analysis. Enter data fromthe tools and reports above to populate a personalized country-specificPEST analysis.Where to next?The World Bank report takes into consideration criteria like getting electricityand construction permits, which might not seem relevant to an ecommerceonly international expansion. But these criteria become relevant if you establishan international warehouse or physical presence. Or partner with an entity thatwould be subject to these matters.12 / 64

The Global Ecommerce PlaybookFinding your fitIt’s time to determine the competitive landscape in your target expansionmarket, your brand fit, and the potential return on investment (ROI) of a givencountry or region. Successfully scaling a global enterprise boils down toearning the trust of customers across geographic and cultural borders.5Cultural norms, traditions, and expectations all have significant impact on yourbusiness. Hofstede’s cultural dimensions6 explore six distinguishing aspects ofnational culture:Power distance indexThe degree to which less powerful members of a society accept and expect theunequal distribution of power. The fundamental issue is how a society handlesinequalities among people.The degree to which societies value the group over the individual. Moreindividualistic societies prefer a loose-knit social framework, where peopletake care of themselves. More collectivist societies prefer a tight-knit socialframework, where people expect relatives or members of a particular group tolook after them in exchange for loyalty.Finding your fitIndividualism vs. collectivismMasculinity vs. femininityThe way societies define success. Societies that emphasize achievement,heroism, assertiveness, and material rewards as success are characterizedas more masculine. Societies that emphasize cooperation, modesty, caringfor the weak, and quality of life are characterized as more feminine andconsensus-oriented.Uncertainty avoidance indexThe degree to which members of a society feel uncomfortable with uncertaintyand ambiguity. Countries that are strong in uncertainty avoidance have rigidcodes of belief and are intolerant of unorthodox behavior and ideas. Countriesthat are weak in uncertainty avoidance have a more relaxed attitude, wherepractice counts more than principles.Long-term orientation vs. short-term normative orientationThe degree to which societies adhere to tradition over modernity. Long-termorientation maintains time-honored traditions and norms, viewing societalchange with suspicion. Short-term normative orientation takes a more13 / 64

The Global Ecommerce Playbookpragmatic approach by encouraging thrift and embracing educationto prepare for the future.Indulgence vs. restraintThe degree to which societies emphasize self-gratification over self-control.Indulgent societies allow the gratification of basic human drives andentertainment. Restrained societies prefer to suppress needs, regulatingthem through strict social norms.Hofstede’s country comparison tool gives you instant insights into countriesand regions. Here’s a sampling:Latin AmericaFar from a homogenous entity, Latin America is home to Spanish, with manyvariations and dialects spanning 17 countries. It can be fatal when enterprisesrely on a single-language approach instead of a tailored approach.7 Crossborder approaches are routinely rejected.Middle EastIt’s not uncommon to see a package addressed to someone in the Middle Eastwith just the person’s name and country.8 In parts of the Middle East, there areno formal postal addresses. With no street addresses9 and relatively few P.O.boxes, it’s nearly impossible to ship by mail in some countries. Coupled withdistrust of formal banking systems10 and a preference for cash transactions,the challenges of accepting payment and fulfilling orders is daunting.Finding your fitConsider opening local offices with teams that can provide local content.One ecommerce marketplace employs 80 journalists across Latin America toprovide local input and avoid hybrid Spanish.Consider accessing more developed parts of the Middle East throughmarketplaces or establishing a physical presence. Or consider partneringwith a local online business that can provide contractors with proper deliverydirections.AsiaMore than 1 billion people in Asia have no access to formal financialservices.11 Known as the “unbanked,” they can’t participate in ecommerce.Payment apps that aren’t linked to bank accounts or credit cards areemerging to fill this gap, allowing people to make purchases throughvirtual accounts without identification.12Even if the unbanked isn’t your target consumer, banking penetration inSoutheast Asia is on the rise as FinTech and companies like Alibaba and Tencentinvest in accessible ecommerce.13 With basic mobile banking services evolving,make sure you can accept the latest local payment methods.14 / 64

The Global Ecommerce PlaybookCrunching numbers: estimating ROICalculating the expected ROI from a new market is as much an art as a science.Although the formulas we provide offer estimates, these calculations are only asgood as your inputs and assumptions.At the most basic level, you’re estimating how many people want what you’reselling, can buy it, and would choose you over a competitor. The number of customers in your target market: Use the World Factbookfor demographic segments. Only account for those who have access to theinternet, payment methods, and shipping options. Your offering’s penetration rate: This isn’t the rate from your home market.This is an estimate of how many people use the type of product you sell. Ifthe penetration rate is almost 100% for footwear in the U.S., it might besignificantly less in developing country.With these estimates, calculate the market size and value:14Market volume number of target customers penetration rateMarket value market volume average order valueFinding your fitFirst, you need to know two key inputs:Estimating your share is the next step. As a guide, determine thecompetitor share in your target market. Or use a discounted versionof your home market share.A share estimate helps you estimate your market potential with a moresophisticated calculation:Market potential total number of potential consumers market share(percentage of consumers buying from you) average selling price average annual consumptionThis market-potential worksheet walks you through the calculation step by step.Assess your brand awareness to define your cost of entering a new market.Research shows that higher international brand awareness correlates withhigher ecommerce sales.15 Likewise, assess your offering versus that offoreign competitors. Use this framework to evaluate how competitorproducts are differentiated.15 / 64

The Global Ecommerce PlaybookTesting 1, 2, 3The top mistake your business can make with global expansion is investingsignificantly up front before validating that your brand resonates with targetconsumers. Initially, you need to test, learn, and iterate.Before launching a localized online store, consider experimenting witha marketplace that serves your target region or country. A total of 60%of global online sales takes place on marketplaces.Marketplaces are great for experimentation if you lack brand awareness. Brandagnostic shoppers, those who know what but not who they want,380 tend to useonline marketplaces.16 These shoppers value the comparison shopping and320300 convenience that marketplaces offer.Here’s a comprehensive list of the world’stop marketplaces by region and sales.155We’ll explore how to launch on key marketplaces in this section.200100Testing your entry into a new region through a marketplace reduces risk, but notwithout drawbacks. Besides negatively impacting margins, enterprises sellingon marketplaces lose the valuable customer behavior data they would gleanfrom their own branded site.Testing 1, 2, 3Gross merchandise volume in billion USD40087.386.9 can also conditionMarketplacesshoppers not to purchase from brandedlocalized sites. If you launch a local online store, be aware that marketplace sales0can cannibalize sales on your branded store.17JD.comebayAmazonTmallDip your toe in the water:TaobaoMost popular online marketplaces worldwide in 2017 (statista.com)exploring expansion optionsIt’s possible to experiment in new markets without massive investmentor even marketplaces.Launch globally from homeSell globally from your home-country website. Some businesses use this strategywhen targeting a region or country similar to their own in language, culture, andsocial norms. It works especially well when similar markets are geographicallyclose, like the U.S. and Canada.16 / 64

The Global Ecommerce PlaybookWe’ll look at how to accept multiple currencies on your online store andnavigate customs and duties in later sections.Establish a reseller relationshipIf your product would perform well in a particular sales channel, considerpartnering with third parties already embedded in that channel. If you’reselling a tooth-cleaning dog treat, think about using local veterinarians.It’s a way to break into a new market through the credibility and reputationof channel partners.Launch a wholesale channelSelling your products through international brick-and-mortar retailers reducesyour risk when entering a new market. It also reveals if other business ownersbelieve your product resonates with an international audience. The importantmetric to monitor is the reorder rate, which genuine consumer demand anddictates if you can sell direct.Testing 1, 2, 3Learn more about launching a wholesale channel.17 / 64

The Global Ecommerce PlaybookKnow the rulesExpect to encounter burdensome legal requirements when you expandglobally. Ignoring a country’s rules and regulations can lead to significantfinancial consequences, loss of reputation, and ultimately, a failed expansion.And regulations evolve, meaning you need to update your business regularly.License and registration:business licensesWhether you’re planning to sell through multiple channels or a physical store,you need an international business license to operate legally. Business licensesallow governments to monitor business activity and impose taxes. Withoutproper licensing, you risk expensive penalties.ChinaForeign-owned ecommerce businesses need a commercial internet contentprovide

10 largest ecommerce markets (by billion USD) Before expanding internationally, it’s crucial to understand your potential target markets, including how digitally mature and business-friendly they are. To decide which markets to target, start wide then narrow your focus. The U.S. is the second-biggest ecommerce market.4