Workers sorting out packages for Single's Day Sale, one of the largest e-commerce events. Source: AFP.

Workers sorting out packages for Single’s Day Sale, one of the largest e-commerce events. Source: AFP.

Crossing borders with e-commerce means connecting with the locals

Last year just shy of a third (31 percent) of Amazon’s revenue came from outside the US, and 11 percent of Chinese e-commerce giant Alibaba’s came from overseas. 

With advances in e-commerce tech, as well as warehousing and logistics, geographical borders don’t really exist in the world of online retail – at least, they don’t really need to – and that presents huge opportunities for brands and retailers to access new markets and, ultimately, create a bigger pool of customers than ever before.

Of course, selling internationally isn’t straightforward. Merchants can be reluctant to go beyond their domestic market, where everything from taxes and customs, languages, payment instruments and fulfillment is different. 

There is also the potential for fraud and data breaches, an occurrence of any is enough to bring a business to its knees – particularly if they’re in the dark about local laws and regulations. 

For retailers online, however, those risks can be managed and shouldn’t deter companies from reaping the benefits of cross-border selling. There are a few pointers that retailers with borderless horizons can follow. 

Trust the locals

To capture hearts (and market share), retailers need to focus on localizing their products. All aspects of the product need to resonate with the customer – including hiring locals to handle certain non-core business operations.

According to a study by Pitney Bowes, 83 percent of cross-border retailers put faith in local third-party vendors – whether its carrier networks, payment services or fraud management.

From culture to language to customer preferences, it is the locals that will know the market best. Getting to know and trust local specialists may take a while, but it will ensure the best service is achieved for the buck, and shoppers receive a service they’re used to. 

Even within a country, culture varies drastically from city to city. These nuances make a world of a difference and, without pursuing insider knowledge, even household-name-status brands can easily misstep. 

The fall of e-hailing service Uber in Southeast Asia is a testament to this. It was taken down by its local competitor Grab – where Uber failed to provide value to its customers, Grab was quick to plug the gaps. 

To escape traffic jams, for example, Grab started putting its motorcycle taxis, GrabBike, on the roads. At a time where cash was still king, Uber wouldn’t budge on its card-only policy, Grab knew taking cash was an important differentiator – and ultimately, Uber was no longer viable in the market. 

Local expectations

Up to 76 percent of shoppers prefer to transact in a local currency, so a key aspect of serving an international market is to use a currency that locals use daily.

Customers also do not like hidden fees – for a good overall experience, merchants should focus on working with the right payment providers to ensure that fees are clearly stated, without any hidden transaction fees that would only appear after a customer checks out. 

Payment providers could also help merchants in understanding regional price preferences, and displaying pricing in familiar conventions.

Avoiding international sales may seem like a safe bet for now, but it will not encourage business growth. Business is all about risks, some are worth taking, some are not. This one is definitely one that is worth banking in on.