In a digital
world where there are no borders, the opportunities for expansion for
companies seem endless. Yet there are aspects that you, as an internet company,
if you wish to achieve international growth.
By 2020, 30 per cent of all
B2C transactions will be cross-border. Capitalising on economies of scale, tapping into
new economies or testing new goods and services – these are
just a few of the many reasons why companies are expanding across borders. Whatever your exact
reason may be, you’ll always have to deal with legal and cultural differences
between countries and even regions. In this blog, I’ll outline the regional differences
in online consumer behaviour and explain what you need to bear in mind
if you want to expand your online business geographically.
Research by Ecommerce Europe shows
that the total European market was worth 509.9 billion euros in 2016, an increase
of 12 per cent compared with the previous year. However, the European market is a
market characterised by enormous differences in GDP per capita, the size
and a wide variety of languages. Consumer behaviour and
internet penetration also vary considerably from country to country. Some indicators are:
Conversion rate: One of the
key performance indicators for your online shop is the percentage of visitors who
actually make a purchase and the breakdown of this by country. In Germany, the
average conversion rate is 2.22 per cent. In the US, the average is 1.96
, whilst in the United Kingdom the average is 1.88 per cent. In
Southern European countries, the average conversion rate is considerably lower,
for example in Greece (1.44 per cent) and France (1.10 per cent).
Repeat buyers: Northern and
Western European countries have a much higher percentage of returning consumers
than in Central and Southern Europe. This may be because consumers in these regions
are more loyal, but also because e-commerce players are better positioned here and
their platforms provide better customer retention.
Further
differences can be found in the bounce rate; in mature e-commerce markets
(such as the United Kingdom) this can be as low as 35 per cent,
whilst in countries with lower internet penetration, a bounce rate of 40 to
45 per cent is quite normal. Finally, the percentage of abandoned shopping baskets
(purchases that are not completed) averages 52 per cent. This figure can also
vary considerably from country to country.
What is the key
to success in different regions? Localising your offering.
Local look and feel: both the website
and customer service must be adapted to local preferences. It is
crucial that texts and product descriptions are written in the local language
. Customer service, email addresses and telephone numbers must also
be localised.
Payment options: this goes far
beyond simply accepting payment in local currency. Every market has generally accepted
payment methods with which consumers are familiar. In the United States,
, consumers pay via EFT; in Canada, via Interac Online; and in China, via
Alipay. In Europe, payment methods vary from country to country. For common
payment methods, see the image below.
Fulfilment and
delivery: a good fulfilment partner must be able to provide strategic advice
on logistics and provide insight into potential cost savings. Here too,
significant differences between markets. Different countries
use different packaging materials and dispatch methods. In the United
United Kingdom and France, for example, collection points are very common. In
the Netherlands, same-day
or next-day delivery
the norm, whilst German consumers accept longer delivery times and
place greater value on clear information. Not to mention
delivery within a specific time slot.
Returns: here too,
, consumers prefer your
returns policy. There are significant differences in consumer behaviour across European
countries, even for the same types of products. In Northern and Western European countries,
return rates are generally high, whilst Southern European consumers
tend to keep the product more often.
Online shoppers across Europe want to be able to
(free of charge) to a local address. Today’s consumers also expect
a prompt refund for their returned items as well. Free and fast
returns are often a deciding factor in a consumer’s purchase. For
retailers, it is more cost-effective when products are made available online again
.
Checklist for European growth:
- Local website and marketing
- Local customer service
- Adapting to local currency and payment methods
- Complying with local legislation
- Adapting to local delivery preferences
- Local return addresses
- Create 'Brand Fans': turn consumers into loyal consumers
Finally: in almost all cases,
it is preferable to work with a local partner. They can
advise you on the checklist above.
Jorg Megens - Business Innovator at Docdata
