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The development of technology and globalization have opened new opportunities for foreign expansion for companies worldwide. Cross-border e-commerce, or international sales, has become a key element in the development strategy of many enterprises. By expanding into foreign markets, companies can significantly increase the number of potential customers and diversify revenue sources. In this article, we will discuss how to prepare for the launch of an international sales platform and what challenges companies may face when expanding into foreign markets.
Expanding into foreign markets brings benefits that can significantly impact a company’s growth. Cross-border e-commerce allows for a significant increase in the number of potential customers, opening new sales opportunities and diversifying revenue sources, thus reducing the risk of seasonal sales declines in the local market.
(…) In my opinion, each new market represents a new perspective for gaining a larger group of customers that may not increase in the market we already sell in and may not reach us as easily (…) emphasizes Karol Kowalik, Technical Project Manager.
Expanding operations into foreign markets can be groundbreaking for the company’s growth and sales development.
(…) The only perspective for growth is foreign markets. Here, of course, it is easiest to start with European markets, with countries that are part of the European Union. The law and various cooperation agreements between countries facilitate this. In the longer term, we also consider countries outside the European Union.
Foreign expansion allows a company to better utilize its resources, such as technology and production capacity, often leading to lower unit costs and increased profitability.
More on the benefits of international online sales in a special episode of our podcast: E-commerce Without Borders.
Identifying the target audience in new markets is a very important element of a cross-border e-commerce strategy. Consumers in different countries may have different preferences, needs, and expectations. To effectively capture the best foreign markets, a company must thoroughly understand and adapt its offer to the specifics of local consumers. Demographic, cultural, and behavioral analysis allows for precise targeting, increasing the chances of success and building lasting relationships with foreign customers.
Expanding into foreign markets involves choosing the appropriate e-commerce platform model. There are two main models: a common platform for multiple language versions and separate online stores for each market.
A common platform for multiple language versions is ideal when a company sells the same products in different markets, such as the Polish, Czech, or Turkish markets. It is easier to manage all products from one CMS panel. The common platform allows for central settings of all product properties, such as name, description, features, and prices, which greatly simplifies management and reduces costs.
Separate online stores for each market are a better solution when a company’s offer is highly dependent on the specifics of individual markets. If a company sells completely different products in different markets and wants separate management for each, it is more cost-effective to create separate stores. This allows for better adaptation of the offer to local needs, although it involves higher costs and greater management complexity.
(…) it is easier to manage from one place. Mainly, it’s about maintenance costs. If we imagine expanding such a CMS panel and assume that we want to introduce a new option or feature in the product description area that allows us to display a video on the product page, if we have distributed CMS panels and systems, we need to prepare this in two panels, both for the Polish and Turkish markets. We prepare it separately, which increases the cost. (…) summarizes Karol Kowalik.
Before launching an e-commerce platform in new foreign markets, it is crucial to conduct a series of preparations to ensure smooth and efficient store operations. One of the most important elements is logistical preparation, including integration with local couriers and payment operators. Managing the supply chain in different markets requires adapting logistical processes to ensure quick and seamless product delivery to customers. Collaboration with local courier companies optimizes costs and increases service quality.
(…) with one of our clients, at the beginning of entering a new market, there was a high cost due to missing a crucial address detail on the shipping labels. It turned out that the courier operating in that market was unable to deliver the package successfully, causing them to return to the sender and require re-sending. Of course, the client was not charged for the re-sending cost, so only after we corrected the form and required clients to provide that address detail did the orders flow smoothly (…) explains Karol Kowalik.
It is also essential to adjust content and prices to the specifics of each market. Examples of these actions include translating product descriptions, adapting marketing messages, and adjusting pricing policies to local economic conditions and customer expectations. Each market has its unique needs, so it is important for the offer to be relevant to the preferences and financial capabilities of local consumers. This approach enables effective competition and building a strong position in new foreign markets, potentially expanding to further foreign markets in the future.
Expanding into foreign markets involves unique challenges and specific requirements of individual countries. In the interview, Karol Kowalik provides several examples illustrating the diversity of these challenges and the need to adapt e-commerce strategies to local conditions.
In the Bulgarian market, a popular solution is Econtomaty, the equivalent of Polish parcel lockers. Customers can choose Econtomat as a delivery method, which is convenient and familiar to them. For the company, direct integration with Econt is unnecessary, as intermediaries organize the shipment and deliver orders to Econtomats. This simplifies the logistics process and eliminates the need for direct integration with the local delivery system.
Customers in Scandinavia differ from Polish consumers. They are more patient, meaning they can accept longer delivery times. In return, they expect very high-quality products. The company must ensure that the offered products are meticulously crafted and meet high-quality standards, which is crucial for gaining and retaining customers in this demanding market.
Customers in Romania require very precise and easy-to-use purchasing processes. They may easily make mistakes, such as selecting the wrong currency or entering incorrect addresses. To prevent these problems, the company must create intuitive and well-thought-out order forms that minimize the risk of errors and streamline the purchasing process.
(…) when preparing shipments to Ukraine, we had to modify the form. We added a field for entering the patronymic, which does not exist in our country but is required there. It turned out that for the delivery of packages or order processing, it was necessary (…) describes Karol Kowalik.
Read: Global e-commerce trends 2024. Part two
Foreign expansion and developing international sales have become crucial elements in the strategy of many enterprises. Cross-border online commerce offers the opportunity to significantly increase the number of customers and diversify revenue sources. Proper preparation, such as integration with local couriers and payment operators and adjusting content and prices to local markets, is essential.
Cross-border challenges can include specific logistical requirements and unique consumer preferences in different countries. Examples from the Bulgarian, Scandinavian, Romanian, and Ukrainian markets show how important it is to adapt strategies to local conditions. Despite these challenges, appropriate strategies and best practices enable companies to effectively overcome difficulties and achieve success in global sales.
The entire conversation with our specialist: Cross-border e-commerce: How does the foreign customer shop?
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