Did you know that the US only accounts for 15% of the world’s purchasing power?
If you’re thinking, “So how can I get a piece of the other 85%?”…well, you’re our kind of person.
The fact is, there are HUGE opportunities for online retailers who can cater to a global audience and sell across borders — now more than ever before.
Of course, it takes work and it can be pretty intimidating. But that’s why we’re here. We’re about to serve up all the info and guidance you need to tackle the challenges of global e-commerce with less stress and more success! Let’s dive in.
The scoop on global e-commerce
- Big world, bigger opportunities
- The challenges of going global
- Challenge: Can you find fans around the world?
- Challenge: Don’t get lost in translation
- Challenge: Dollars to dinars, pounds to pesos
- Challenge: Shipping across the globe
- Challenge: Jumping through international hoops
- Can you afford to miss out on cross-border sales?
Big world, bigger opportunities
So when we say that there are massive opportunities for global retailers, just how big are we talking? Well, let’s take a look at those numbers.
Global e-commerce statistics
Make no mistake: The global e-commerce market is BOOMING.
In 2020, e-commerce claimed 16.4% of global retail sales — an all-time high! 2021 promises to keep that trend going with an anticipated $4.891 trillion in sales… oh, and China is expected to produce $2.8 trillion of it!
But that’s not all: China will also lead in digital buyers (792.5 million, a.k.a. one-third of the world’s e-commerce shoppers) and become the first country to take more than half of their retail sales online.
E-commerce growth is also surging in Latin America — the region led the world with 36.7% growth in 2020.
Don’t discount Europe either: mobile sales are exploding in Germany, and more than half of the UK’s e-commerce sales will happen on mobile devices this year.
Of course, much of this growth came in response to 2020’s pandemic lockdowns, which forced many brick-and-mortar retailers to close their doors for weeks and even months. Buyer behaviors shifted significantly as many older shoppers joined Millennials and Gen Z online, with 84% of consumers choosing to shop online during the pandemic.
Cracking the worldwide market online: The challenges of going global
As our world grows more and more connected, it’s no surprise that e-commerce is expanding across borders too. But for many merchants, buying and selling in a new territory is, well, new territory.
As an e-commerce business, it’s your job to show your global audience that your brand can be trusted to deliver a consistent customer experience, no matter where in the world your customers and products are located.
But you probably know that expanding into new global markets is easier said than done. So what are some of the challenges you might face when you take your online store global? And how do you tackle them successfully?
Challenge: Can you find fans around the world?
So you want to cross borders… but where do you go first? How do you know which markets will be most interested in what you have to offer?
One of your best resources is actually already at your fingertips: your site analytics. Even if you’re not selling to other countries, you may have noticed some international traffic poking around your site. If so, that’s a good sign that you may be appealing to a global audience of shoppers that are already interested in your products and brand.
The US International Trade Administration (ITA) also offers an impressive tool that may help you find new markets for your products, although it is targeted to businesses that are already exporting goods internationally.
The Inside Scoop:
- Do some digging into any prospective markets to make sure they’re a good fit. For each country or region you’re considering, look at things like internet penetration, online shopping habits, Google Trends, potential competitors, etc. to see whether you’ve got a good opportunity… or just a fluke.
Challenge: Don’t get lost in translation
Your Aussie customers might not mind making a purchase in US English, but most global shoppers (75%) prefer to make purchases in their native language. And while major translation fails often make for good laughs… it’s not so funny when they result in lost sales.
Fortunately, many e-commerce website builders offer built-in translation features or add-on translation apps. Activating this feature enables your customers to easily switch to their preferred language, or it may detect users’ browser language settings automatically.
The Inside Scoop:
- Make sure to check whether your translation tool covers custom copy or just generic store labels and buttons. You may need to seek human translation services as well.
- Cultural norms vary widely, which means puns, jokes, and other casual speech may not make sense (or may even be offensive) when translated into another language.
- Don’t forget to translate body language too. 🙈
Challenge: Dollars to dinars, pounds to pesos
Just as customers prefer to see things in their own language, 92% of online shoppers also prefer to see their own currency. Fortunately, this is also a pretty easy fix — especially if you are able to use a multi-currency plugin for your store.
That said, you’re also going to be dealing with currency exchange and transaction fees.
Because exchange rates fluctuate, currency conversions are typically calculated at the time a customer places an order, although some platforms offer you the option to set a fixed price for a product when it’s being transacted in another currency. The specific details will depend on the e-commerce software you use.
Your payment processor may also charge a fixed or percentage-based fee on transactions using an international payment card and/or currency conversion — that is, if they support international payments (and not all do). Your customers may also be expected to pay a currency conversion fee on the transaction as well.
The Inside Scoop:
- Make sure that your currency converter operates all the way through checkout. Conversion rates drop when currencies change before a customer completes the transaction.
- Want to dodge costly cross-border transaction fees? Cross-border payments solutions like the SellersFi Digital Wallet and Business Card can help you easily manage all your global financial payments in one place, so you don’t have to pay conversion fees between platforms.
Challenge: Shipping across the globe 📦 ✈️ 🌏
Patience is a virtue that’s in short supply when it comes to shipping as consumers have grown accustomed to super-fast delivery times. But delivering that kind of speed to overseas shoppers can get really expensive. really quickly.
Selling to international customers will also require you to deal with customs and tariffs. US Customs & Border Protection (CBP) has provided a straightforward guide to help you comply with import requirements, and the ITA has created a tool to help you calculate tariffs. UPS has also put together a fantastic tool to help you identify specific regulations for the countries you’re importing to/exporting from.
Getting these details right is absolutely crucial as inaccurate calculations and non-compliance can result in extra fines and fees, shipping delays… and some very disappointed customers.
The Inside Scoop:
- When dipping your toe in international waters, it may be easier to start by selling on a marketplace. Etsy, for example, requires no additional paperwork and even offers mailing labels with integrated customs forms. Similarly, Fulfillment by Amazon takes care of picking, packing, shipping, and localized customer service.
- Even if you’ve found a reliable shipping company in the US, make sure they can deliver the same level of service across borders.
Challenge: Jumping through international hoops
Each country has its own requirements and regulations for businesses selling to their citizens. While these vary from country to country, there are a few major items to be aware of.
The first of these is the EU’s General Data Protection Regulation, also known as GDPR. This policy applies to businesses of any size that offer products or services to European consumers. If your store runs on a major e-commerce platform
The second is much less tangible — the Great Firewall of China. Your store may be blocked from Chinese shoppers if the government doesn’t approve of and chooses to censor your business, and certain tools connected with your store (like Google and Facebook) may not work well.
The Inside Scoop:
- Always do your research on the specific e-commerce regulations for the countries you wish to sell to. Non-compliance can be a very expensive mistake!
Can you afford to miss out on cross-border sales?
Here’s the thing: Cross-border sales already account for one in seven online transactions.
Shopify saw a startling 3,309% spike in translation apps being used around the world during the pandemic, with significant increases in currency conversion and dropshipping apps as well.
That means that not only are your competitors reaching new customers around the world, you may also be facing new competition from overseas brands.
But that shouldn’t put you off from taking the chance. The data suggests that cross-border e-commerce is more than a trend — soon, it’ll be the norm. If you get your store ready for global sales now, you may well be ahead of the curve.