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Growing Globally: Exploring the ‘Modern Silk Road’
Borders are no longer barriers for international retail players flooding our shores. The question is, will local retailers take advantage of this trend and also explore the ‘modern silk road’?
As the world of online retail gets smaller, borders are no longer barriers for businesses making a serious play within the retail sector. It has been proposed that the rise of online retail has given way to a ‘modern silk road’, as described by Andrew McGregor, CEO and Co-Founder of eCommera in The Trading Intelligence Quarterly Global Commerce: The world is not enough report.
So you ask, ”Why should I consider expanding my e-commerce business internationally?”
“Why wouldn’t you?” asks Laura Yeomans, Country Manager for ShopStyle at Allure Media. “The beauty about online retail is that retailers are now less restricted by geography and this needs to be taken advantage of. Think outside the previous boundaries.”
“The 2011 DHL Export Barometer showed Australian exporters expect to have the highest growth expectations to China for the coming year, with 59 percent of exporters expecting to increase orders in 2012,” says Gary Edstein, Senior Vice President of Oceania for DHL Express. This indicates that the notion of internationalisation is on the radar for an increasing number of Australian businesses.
How do you decide which markets to move into? As pointed out by Martin Newman, CEO of Practicology, scope of opportunity is a big driver in determining whether or not to move into overseas markets.
Ways in which to determine what markets are right for your business are of course through examining market trends and statistics, the competition in these markets and what demand there are for your products or services.
“Use the data you already have,” advises Yeomans. “Find out if there’s an existing demand based on incoming traffic from a particular country or region. Begin catering for that region and reward those consumers for buying from you. As this grows and you feel more confident about servicing them look to your next market.”
Think Globally, Act Locally
Newman’s number one tip to retailers expanding internationally is to ‘think globally and act locally’. This notion is crucial for success in any market, however particularly when internationalising your business. Along with a multitude of commercial, technical, legal and operational considerations, a common theme is the need to cater to local customers.
“If you want to be successful in new markets, you need to show that you’re really making an effort to engage with customers and that means having local language sites, with local customer service and payment types,” he advises.
“Some retailers that go abroad are a bit naïve. They just think about the internationalisation aspect, rolling out multiple sites, in numerous languages and currencies, but forget what the local nuances are,” adds Kees De Vos, VP, Business Consulting at hybris.
Supply and Demand on a Grand Scale
When thinking beyond borders, the complexity of delivery not only encompasses getting your product to the customer on time and in a fit state, but taking into account the various legal, customs and tax implications that come with internationalisation.
Edstein urges retailers to do their research. “Understand what the customs and duty charges are likely to be for the goods you’re offering and incorporate them into your online price,” he recommends.
“Know what your competition is doing online and make sure that your offering satisfies customer needs in a unique and value added way. Finally take the time to select a reputable and truly global service provider who can assist you in delivering your goods to wherever in the world your customers might be located.”
“It’s not just about delivery,” Newman adds. “Customers will check what your returns policy is before they buy. I suggest that you make this free or at least as easy as possible otherwise they won’t buy from you.”
Exploring the Modern Silk Road
E-commerce undoubtedly offers local retailers the opportunity to explore the ‘modern silk road’ and grow their businesses beyond the local market in a relatively accessible way. With the wider Australian market in downturn, this presents an opportunity for local retailers to buck the trend, learn from their competitors and take advantage of the global consumer market.
Download the full Power Retail Growing Globally Special Report for more insights and best practice advice to internationalise your business.