Ecommerce makes shopping possible anywhere, and home-grown retailers are understandably attracted by the notion of expanding their offering beyond the UK.
Internet Retailing recently reported on a Royal Mail survey into the ambitions of online retailers looking to trade in Europe and beyond. More than half (56%) said they aimed to increase international sales in 2016, but some territories were considered to offer greater opportunities than others:
- Eurozone - 48%
- USA - 30%
- Asia - 25%
- Australasia - 23%
But, without over-trivialising matters, the world’s a big place and the possibilities opened up by international trade differ depending on your business – knowing where to begin can be daunting, and risky.
A good starting point for narrowing down your options is to answer the following questions, honestly:
- Are you already experiencing demand from overseas or are you starting from scratch?
- What business model do you want to adopt?
o Physical stores and online
o Selling via a marketplace
o Selling via your own websites
o Selling via localised microsites
o Working with a local distributor or agent
- If the territory is not English speaking, how will you convey what you do?
- Does your product fit the local culture?
- How competitive is the local market?
- Will you need to modify your product in order to sell compliantly?
- How would you market your product in that territory – could you replicate what works in the UK?
Help is out there
Step two is to tap into all of the help and resources out there.
The government has its own agenda for getting more businesses to trade overseas. UK export targets are high and in 2012 the government set an ambitious target to get an additional 100,000 companies exporting by 2020, while doubling the value of UK exports to £1 trillion.
Help is available as part of this through the Exporting is GREAT campaign launched at the end of 2015, offering real-time export opportunities that businesses can apply for. The UKTI has International Trade Advisors located in 40 locations across the UK and can offer advice on everything from investment to export documentation.
Brent Hoberman, chairman of Made.com reportedly said in support of the targets: “The rise of omni-channel shopping and e-commerce is a game changer that creates opportunities for new businesses to grow from scratch into international brands within a few years”.
The government has identified eight key regions for expansion, based on their potential: China, the Gulf States, India, ASEAN (including Indonesia, Malaysia), the US, Mexico and Latin America, the European Union, Russia and emerging Europe (including Cyprus and Turkey). There’s more about the Government’s UK retail industry: international action plan here.
The plan also includes specific territories for British luxury retailers. Luxury goods are in high demand, with many luxury brands receiving more than 50% of their revenue from online sales. The government’s target here is for 72% of domestic luxury brands to have a trading presence outside of the UK.
Demonstrating that knowing your target market is key, the territories identified for luxury retailers are determined by the largest proportion of households with an annual disposable income of more than US$300k such as Milan, Paris, Shanghai, New York, Mumbai and Dubai.
To get closer to those that have been there and done it, the Sunday Times International Fast Track has some inspirational names on its list from the world of retail – including Missguided, JoJo Maman, The Hut Group and Matchesfashion.com (which promises next day delivery from the UK to its US customers).
The voice of online retail, IMRG publishes an invaluable series of cross-border trading passports in association with eCommerce Worldwide. This includes detailed A-Z resources for retailers looking to run ecommerce channels abroad. Crucially its resources are focused on:
- Australia – due to its global outlook for trade and ecommerce and multicultural society
- China – with a huge potential customer base, China offers growth opportunities we can only dream about in Western markets
- Germany – the second largest ecommerce market in Europe
- Russia – with a population of more than 143 million and a growing middle class that is eager to spend more of its disposable income on consumer goods
- USA – which cannot be ignored with 87% internet penetration
Look before you leap
Marketplaces are an obvious first route to market for retailers looking to sell overseas. The UKTI’s global marketplace map demonstrates some of the major names but there are, in fact, close to 400 of them out there.
Amazon alone claims that its British sellers earn more than £1 billion from selling goods abroad on its platform.
Some of the biggest brands start their international journey by selling on marketplaces, using those learnings to launch a standalone offer. Some, such as Burberry in China, continue to use a marketplace as their primary channel, and it’s true that in some territories marketplaces are the only realistic route.
The key is still to match your offering to the consumers you’re trying to sell to in order to evaluate the most realistic routes to expansion. But working through those ‘why and how’ questions and using the experience of others to help you answer them is crucial to taking those first international steps.