E-commerce: how to enter unfamiliar markets?

Bilderlings Pay on what needs to be taken into account when scaling and localizing your business.

It seems likely that since the fall of the Tower of Babel there has not been a single day that could be called ideal in terms of communication. Linguistic, technical, legislative and other barriers are undoubtedly less noticeable when you work within your own national market than when trying to operate in neighboring ones.

But today success in e-commerce depends on an entrepreneur’s ability to reach a global market. And this, in turn, is directly impacted by the often tough requirements of local markets on online trading platforms. In this article, Bilderlings Pay will remind you how to avoid localization missteps in the global market.

Consumerization: the whole world is not enough

The basic principles needed to see sales growth are few but universal. First of all, when entering any new market, it is necessary to anticipate needing to effectively perform all major – both global and local – methods of online payments. These should be available to customers, regardless of their location. There may be a huge number of options associated with providers of payment and software solutions.

Be sure to pay attention to the redirect service, when clients are smoothly redirected from an online storefront to a fully customizable payment page. A built-in iframe option which integrates the transaction security check without redirection is important as well.

Differences in local markets can be very significant. Neglecting them can completely bury a new online store under the wreckage of an unwise strategy. China and Southeast Asia can be a good illustration of the possible difficulties inherent to scaling. This terra incognita is opening to Western business quite reluctantly. The reasons for the complexity of this expansion are not even in the policy of isolationism per se, but primarily in linguistic, technical, legislative and even sociocultural obstacles. Western merchants who don’t understand and, consequently, ignore these obstacles cannot move successfully in this new geographical direction.

Complexity of choice behind the Great Wall: iOS or Android?

More than 60% of retail sales in the e-commerce segment are now made from mobile devices. Internet retailers sell from all available devices, thus strengthening the strategic development of mobile commerce in the first place.

However, in the US and Canada, more than 60% of users use Apple smartphones based on iOS, with the rest using Android. In Europe, the share of Android and, accordingly, loyalty to its applications, is higher. But in China, Korea, and the other promising – but not widely open to Western merchants – markets of the Southeast Asian countries, devices with the Android OS are the absolute leaders.

At the same time, both iOS and Android have their own loyal customer base. So, in China, the share of American smartphones is only 25%, but their owners are more affluent consumers, with high loyalty and positive shopping experience. In 2016, spending on iOS applications in China was more than 15% higher than in the US.

Therefore, scaling to the Chinese market through the Apple application store is easier, because in this case the rules for optimizing the Apple Store (ASO) are the same as everywhere in the world. With Google Play there are more applications, but more chaos. Here, optimization is still a far cry from the order that exists in Europe and the United States, where almost the entire market segment was shared by two American players, Google and Apple, and their application stores.

In China everything is different; telecom operators trade applications through China Unicom WoStore and China Telecom Tianyi Store. In addition, applications are distributed by the smartphone manufacturers Xiaomi and Huawei through their stores. Chinese marketplaces like Tencent Myapp App Store, mobile assistants “360” and Baidu, which cover about 500 million users in total, launch their products with adaptation for Android and iOS, competing with global players from the US.

At the same time there are more than 200 local application stores, which often take up to 50-90% of the sales profits! They focus mainly on local payments with WeChat and AliPay, and not on cross-border transactions. According to TalkingData, in 2015 only 25% of Chinese users installed foreign applications on their smartphones. It should also be noted that, for example, Facebook Marketplace is not accessible there – either at all or only through VPN and proxy servers.

And finally: to be engaged in this business in the Chinese market, European manufacturers, exporters and merchants have to pass quality control of applications for the above-mentioned partners.

This is just one example of the difficulties that an e-trader can face in a local market. The entry process can be complicated by the nuances of national legislation, the specifics of the local business environment, protectionism measures or simply by peculiarities of the “wild market” which has already been all but forgotten even in Eastern Europe. Therefore, to achieve growth in sales, it is worth using all available “buttons”.

Forget about the Tower of Babel!

In general, growing Asia is a rather specific example of the challenges presented by global e-commerce. We must remember – in any new market, many things will be completely different, starting with suppliers and certification requirements, and ending with pricing strategy and buyers’ habits. Your challenge is to adapt your trading platform, including the store interface and a set of payment instruments, to the requirements of the new market. To learn to sell in a market where the interests and culture of consumers are different from those of your current or potential buyers within a familiar market is a difficult task.

Factors such as the language or languages spoken by a significant part of the population of the country where you are looking for your customers is very important. In Finland, for example, the Finnish and Swedish languages are a must, as well as the Sami language. In Latvia, these are Latvian and Russian, in Ukraine – Ukrainian and Russian. To think that one language can be the universal key to sales success is precisely the dusty Utopia from the times of the construction of the Tower of Babel, at least in linguistically diverse Europe.

Nevertheless, as we see from success stories in the Chinese marketplace, English is indispensable on the global market. It is impossible to imagine AliExpress or GearBest without English buttons.

Added value to the service and product is created by integral advertising and informational video sequences designed to convince the potential client of the technical characteristics and good quality of the goods. Therefore, advertising and marketing in each new market should be considered separately. Markets differ from each other in many ways. Therefore, each time you – literally – have to start anew.

However, at the present moment, the ability to adjust and adapt, including with the help of rebranding, will be the most important thing. For example, in China, Coca Cola is Ke Kou Ke Le (which is translated as “tasty happiness”), and BMW is Bao Ma, “Precious horse.” But branding, advertising, social media marketing and other nuances of scaling are a different story.

Bilderlings Pay provides opportunity of translation of the payment page to any language. To speak a client’s language is important not only for cross-board trade. In the age of globalization it is important to be polyglot and offer buyers languages they speak even on the domestic market.

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