What is international ecommerce?
International ecommerce is the business of online retailers expanding their trade across borders and selling to foreign consumers. The international e-retail industry is expected to rapidly grow in the years to come; according to a recent report published by Statista, the ecommerce market is expected to reach $6.54 trillion worth of sales in 2023 (vs. $3.53 trillion in 2019).
This growth has been accelerated partly by the Covid-19 pandemic, with consumers shifting from brick-and-mortar stores to online retail at unprecedented rates. With so much opportunity available, many retail businesses are looking to expand their operations overseas. We have therefore outlined the key considerations for international ecommerce below.
1. Get to know your audience
The first step to success in international retail is to fully understand your audience. Getting this right means you are able to deliver an online experience that suits the unique needs of each market, ultimately resulting in positive user engagement and a high conversion rate.
Knowing your audience may seem a simple task at first; you want to attract anyone who wants to buy your product(s), right?
But exactly who are these people, and why would they choose your product over your competitor’s? Also, how do their purchasing behaviours differ compared to customers in other countries?
A sensible place to start answering this question is to look at historical sales data, if you have it. Review the characteristic trends across your data to identify audience segments such as:
- Age range
- Device choices (mobile)
- Related interests (affinity categories)
Tools like Google Analytics are goldmines for such audience analysis data. If your site is already up and running – and you’re using a tool like Google Analytics to capture information about your visitors – you can learn a great deal about the people who visit your store.
Google Analytics Audience Report
The ‘Audience’ report in Analytics is a great place to start when getting to know your audience.
Here, you’ll find insights into the demographics of your audience, including location, gender and age, which is inferred from logged-in data or browser settings of users.
You’ll be able to gather valuable insights such as the preferred device types in different markets. The ‘affinity categories’ report also shows you what interests your audience based on other websites they visit outside of yours.
If you don’t have historical sales data, you can still identify trends across different markets. Look for industry-relevant research or, better still, speak to any existing customers. What you’re trying to identify here are trends that might inform the structure or design of your site in different countries. You should be able to answer these questions:
- Which foreign countries are you currently receiving the most traffic from?
- Are they more likely to purchase on desktop or mobile devices?
- Which product pages do they visit most?
2. Carry out market research
The process of selling in foreign markets requires thorough research and planning before going ahead. It also requires the collaborative effort of the marketing, logistics and senior management teams to understand how best to approach it.
One of the foundations of international ecommerce success is understanding your marketplace in each country. That means getting to know your competitors – both those you already know, and those who compete with you in the search results. There are various tools out there to help you to gather this data.
The best place to start is with your own team’s knowledge; who do you recognise as competitors? Also, try searching for your products on Google, Bing etc – who outranks you, who is advertising on the search results pages? Armed with a list of competitors, you can start digging further into what those competitors are doing and how this can inform your strategy.
Market research tools
There are various tools which can uncover further detail about your competitors, particularly from a digital marketing perspective, such as:
SEMRush – www.semrush.com
This tool is free to use to a point, though you’ll need to pay if you want more data. Simply input your competitor’s website address to see data including:
- Estimated traffic levels
- Organic search terms and ranking positions
- Paid advertising
You can set the tool to compare domain vs domain, to see directly how you compare.
AHREFs – www.ahrefs.com
This is another tool that’s free to a point, but a paid version is required for more detailed insight. Input any website address to see the full list of websites linking to that site – i.e. backlinks (which are an important factor in search engine optimisation).
AHREFs also provides insight into most linked – and therefore most promoted – pages on the site, which can provide insight into the products your competitors are trying most to push.
SEOmonitor is a paid-for enterprise tool used for keyword rank tracking & SERP analytics. As a competitor analysis tool, it’s one of the best ways to see who’s growing in terms of share of voice in the search results, and who’s struggling, too.
The tool allows you to bulk export your ranking data over any time period and compare it against your competitors.
3. Consider landed costs
Once you have identified your target international markets, you will need to understand the landed costs of selling your products in those countries. While the demand for your products may be there, there are wider financial considerations that may impact the scope of your international expansion.
Landed costs are the additional charges a retailer must pay for their product to arrive, or ‘land’, at the customer’s door. Landed costs include:
- Currency exchange fees
- Insurance premiums
- Shipping and handling costs
- Payment processing fees
These costs are separate to the cost of manufacturing the product itself, and can significantly affect the profit margins of certain products overseas. Make sure that the landed costs are considered in the final price of your products to ensure that international expansion is viable.
4. Sort your pricing
It is very important to consider the psychology behind your pricing strategy before launching into a foreign market. Research has shown that in Australian consumers respond better to prices ending in nine, whereas consumers in China and Japan prefer prices ending in zero.
This also applies to tax. Customers in the USA are familiar with VAT being added onto the final checkout total, whereas customers in the UK and France expect these taxes to already be included in the price.
Make sure to provide shipping policies throughout the customer journey. A study talked about by Shopify found that high shipping and handling costs are one of the main reasons that customers abandon their carts online, so by displaying your shipping policies elsewhere on the site, customers are more likely to complete their orders.
Alongside this, make sure that your website shows the correct currency for each market. Providing a good user experience to all customers relies on presenting them with the information that is relevant to them. Imagine accessing an online store and finding the currency wasn’t the currency of your country, or that you had no option to change the currency – you’d likely leave the store thinking it wasn’t able to serve you.
There are 3 main options for presenting currencies on your website
Use one currency and enable conversion at payment
In this option, the price is shown in one currency, e.g. Euros, and then converted by the user’s own payment platform, such as PayPal or their bank.
Pros: VAT and exchange costs paid by customer
Cons: Can be confusing to the user, who may not know the conversion rate or assume their order won’t be fulfilled efficiently as it is in a currency other than their own
Let the user specify their currency
This is quite a common solution and involves presenting the user with the option to amend the currency to the one they prefer. Usually represented as a flag or currency symbol with a drop down selection.
Pros: User can choose the currency most appealing to them.
Cons: User may be confused on entering the site if the currency isn’t already set to their own
Automatically set currency based on IP address
Another common solution is to automatically detect the user’s location and set the currency appropriately. This is done using cookies and requires the currency of that location to be available or a default provided.
Pros: User is presented the appropriate currency for them from the moment they arrive
Cons: Requires user to enable cookies, can be inaccurate
Your choice of option will depend on your preference and the functionality of your site.
5. Facilitate preferred payment methods
Consumers in different markets prefer different payment methods. Customers in the US, for example, prefer paying by credit card, while customers in the Asia Pacific region prefer online wallets (58%). Diversifying the payment methods you accept will help you streamline the checkout process and avoid avoidable losses in sales.
Once you know which payment methods you will accept, you will need to select the payment platform. After all, if you can’t take payments, you can’t make sales.
Your choice of payment platform isn’t quite as simple as choosing a platform which functions. Trust is an essential component of ecommerce success, and your choice of payment method can have real implications on the trust your target audience has in your website.
If you are already retailing in the UK, you will have a payment platform. However, you may benefit from migrating to a new platform once you start trading in more markets.
Here are some of the most commonly used payment platforms, along with their pros and cons.
World Pay is used by over 250,000 SMEs and is, according to their website, the UK’s number 1 payment gateway by usage.
World Pay offers two options for you to take payments, the first being hosted payment pages and the second integrated payment pages. If possible, it’s best to use the integrated payment pages, which allow your customer to stay on your site to make their payment, whereas the hosted option takes them to a dedicated World Pay page.
World Pay also enables you to take payments via three primary methods; virtual terminal (over the phone), pay-by-link (which means you can send a link to pay via email) and online payments (pay through your website). You can use one or more of these methods, meaning you can make it as easy as possible for your customers to complete their purchase in the way that best suits them.
The benefits of World Pay include:
- Multiple payment options
- PCI DSS compliant
- Takes credit card, debit card and PayPal payments
Sage Pay is used by over 55,000 ecommerce sites and is part of the much larger Sage Group, which has been providing financial software to businesses since 1981.
You’ll receive your funds within 2 days of payment being made which is, according to their website, faster than the industry standard 7+ days.
The benefits of Sage Pay include:
- Industry leading fraud prevention tools included at no extra cost
- Faster payments
- Trusted brand name
Stripe is the payment platform favoured by web developers. Stripe provides code which can easily be taken and used on the host website and customised within the HTML of the page to deliver exactly the look and functionality you need.
Of course, this does mean you need development resource easily available to you. But the benefits of using this system mean it is much easier for your development team to customise the Stripe functionality to your brand and requirements.
The benefits of Stripe include:
- Ideal for developers with code available from Java to Go
- Stripe Checkout offers checkout form templates
- Integrates with mobile payment apps
Authorize.net was one of the earliest available, having been founded in 1996. Today, Authorize.net is used by just under 50,000 websites worldwide (from builtwith.com). It is part of a wholly owned subsidiary of Visa.
Authorize.net has a number of available tools which are available as part of the standard package or at an additional fee. These tools include fraud prevention, automated recurring billing and additional currencies. It also includes Apple Pay as standard.
The benefits of Authorize.net include:
- Award winning support services
- Part of the Visa group
- Can easily be integrated with websites via various methods, so you can choose the one that’s right for you
- Integrates Apple Pay
Amazon Payments makes it possible for Amazon customers to log in to their existing Amazon account and pay for goods through it on your website.
This means the hundreds of thousands of existing Amazon customers will be able to buy from your site without having to sign up or log in to your site – they simply login via Amazon.
The benefits of Amazon pay include:
- Amazon’s existing customers, of which there are hundreds of thousands, can easily pay on your site using their Amazon login details
- Uses the same fraud prevention technology as amazon.co.uk as standard
- Mobile payments also available
Google Pay enables people to pay money to anyone with a Gmail address by downloading an app (available on Android and iOS).
The benefits of Google Pay include:
- Instant payments using a mobile phone or ‘buy with Google’ button
- Mobile focus
- Can be used anywhere in the world
6. Localise your website content
Localising your website is essential to succeeding in an international market. This includes translating your pages to the language used in that country, but it also includes non-linguistic considerations affecting sales, such as cultural references, providing local currencies, stocking and showcasing products according to local demand and changing address forms (e.g. postcodes in the UK vs zip codes in the US).
You should localise the content on every page of your website, including your category pages, your product pages, your blogs and even your terms and conditions. You should always approach this work as part of a larger international SEO strategy, as this will guide which pages to prioritise depending on search volume and how best to meet local search intent.
You should also look to create international sites to house this localised content. There are three main options for international sites:
- Separate country-code Top-Level Domains (ccTLDs)
- International subdomains
You can learn more about the pros and cons of each approach in our guide to international website structures.
7. Run international Google Shopping campaigns
Alongside setting your website up to rank internationally, it is also important to set your Google Shopping campaigns up to run in your chosen markets.
Shopping campaigns are a great way to start generating revenue internationally, and can be launched in over 30 countries, including Australia, France, Germany, Italy, Poland, New Zealand, Switzerland and the US.
Setting up international Google Shopping campaigns works similarly to normal campaigns, except that the feed may need to be optimised for foreign languages and currencies. There are four typical scenarios for international Google Shopping campaigns:
- The product range, feed language and currency remain the same (e.g. an ecommerce website selling the same products in Germany and Austria)
- The feed language and currency are the same, but the product ranges are different (e.g. an ecommerce website selling different products in Germany and Austria).
- The feed language is the same, but the currencies are different (e.g. UK and US).
- Both the feed languages and currencies are different (UK and Germany).
Where appropriate, you should translate your Shopping Campaigns and adjust your product feeds.
Expanding an ecommerce store overseas is a complicated but rewarding process. There are a large number of things to consider, from accounting for landed costs to localising your category and product page content. By ensuring that each of these elements are considered, every e-retailer can leverage the opportunity of selling their products abroad.
Impression helps businesses of all shapes and sizes navigate international ecommerce. We offer specialist digital marketing services, including ecommerce SEO, international SEO and Google Shopping management. If you’re looking to invest in an international ecommerce strategy, get in touch and we’ll be happy to help.