There has never been a more critical time to enter international online markets than now. The UK domestic market is plateauing, emerging markets are growing at speed and the days of the internet being the exclusive domain of UK companies are long gone.
Despite the UK e-commerce industry growing by a double-digit percentage during 2013 and 2014, growth is predicted to slow by the end of 2015. Meanwhile, a new wave of global e-commerce growth has seen emerging markets in Latin America and Asia-Pacific soar by 20% and 30%, while growth in China and India continues to outpace all others. For the first time ever, consumers in Asia-Pacific will have spent more on e-commerce products than North America in 2014. With B2C sales expected to reach $525.2bn in Asia-Pacific, compared to North America’s $482.6bn, this means that in 2014 46% of global digital buyers came from Asia-Pacific.
It’s clear the international digital landscape is changing fast. Last year Amazon reported 44.5% of its total sales come from the company’s non-US websites. Meanwhile ASOS, the UK’s leading online fashion retailer which ships to 180 countries, received more than 43.1% of its revenue from outside the UK in 2014.
The Importance Of Internationalisation
Research* commissioned by Oban Digital among CMOs globally revealed that while 67% of business executives claim that internationalisation is a key part of their growth strategy, only 20% of businesses had all of their current online communications adapted for local culture or language, a key driver of sales success.
The trend towards cross-border online trade and its resulting impact on business growth is acknowledged by the 41% who said that at least some of their communications are customised for international consumption and yet almost 30% of businesses recognised that they simply ‘do not do enough of it’, when it comes to internationalising their business communications.
Other key findings from the study:
- The three most common barriers to Internationalisation are cost, the additional overhead added to the communications process and the business having other priorities
- Only 11% of businesses see Internationalisation as being too risky or complicated, or something they don’t need
- Translation and localisation services are the most in-demand internationalisation requirement
- The responsibility for internationalisation sits firmly in the corporate headquarters, with 46% of companies locating it entirely in their corporate HQ, and 33% having some regional representation
Businesses need to optimise their digital presence in every local market to ensure that they reflect local language, cultural norms and online habits. It’s not enough to presume that the social media platform that works in one market will have the same resonance with your target consumers in another country, for example. There is no one-size-fits-all solution. Companies need to have a watertight strategy to reach this growing international audience. Doing so is both a growth strategy and a defensive one, for the obvious reason that internet commerce travels in both directions.
Local Events Create Global Opportunities
Local insight shows that some of the biggest campaign opportunities in global e-commerce centre on local events – both traditional and newly-emerging. Each country has its own events that are driving online purchasing – whether these are national secular holidays, religious events or newly created product inspired sales seasons – an understanding of the key events and how they are celebrated in your target markets can provide inspiration for your global digital marketing campaigns. For instance:
- In Mexico, Dia de los Reyes Magos which is celebrated on 6 January is the day when children traditionally receive gifts. In 2014, the average family budget for this celebration was 1200 pesos (around $90); and in Mexico City alone spending amounted to 560m pesos ($41m).
- Often celebrated in Japan and South Korea on 14 March, on White Day men purchase gifts as a return favour to women who gave chocolate the preceding month. Koreatimes.co.kr reports that spending can be 15% higher on White Day, the “answer day” to Valentine’s Day.
- Celebrated on 11 November, Singles’ Day is an event dedicated to singles in China. Largely associated with special promotions, it has grown to become the largest online shopping day in the world. In 2014, a staggering $9.3bn worth of goods were sold through Alibaba Group’s shopping platforms alone.
Markets Closer To Home
As more and more countries continue to improve internet penetration rates so the opportunities for e-commerce businesses continue to grow. Emerging markets are improving logistics, their middle classes rising with increased purchasing power and a fondness for and trust of foreign goods. There is much talk about Asia Pacific and specifically China, though this should not prevent brands looking at opportunities closer to home. More established markets like Western Europe are set to see an increase of B2C e-commerce sales from $208.8bn in 2010 to $343.5bn in 2015.
What is clear from the Oban study is that CMO’s have the ambition to internationalise more than ever in 2015. What is also clear is that the role of digital has never been more critical in helping CMO’s achieve this growth. In addition it can provide useful insights and data on customer behaviours that should be at the centre of any international strategy, planning and execution. For these plans to be fully realised the budget allocation towards international growth has to be in place and well-funded.
*The Oban Digital Internationalisation study polled 204 senior business executives around the globe in October and November, 2014.
Oban Digital’s Global Ecommerce Calendar 2015 helps marketers uncover hidden ecommerce opportunities around the world. It can be downloaded for free here.