On 14th March 2019, I attended the Retail without Borders conference in London to learn more about the challenges faced by retailers as they decide to expand their business abroad. From return policies to market places via Brexit, the conference covered a lot of key subjects to consider when selling internationally.
Your business might be considering international expansion, or you might already have started. Whether you’re looking to sell your products in the EU, North America or Asia, there are many things to consider before starting the process. So how should you prepare your business for internationalisation?
Get it right at home first
Your business needs to be strong at home before you start selling your products abroad. This might seem like common sense but it’s easy to get overexcited by the potential of new markets and expand too early. Be patient and wise.
Optimise you digital marketing strategy
Make sure your digital channels are working to the full of their potential at home so that you can carry over best practices to other markets once you’re ready. Digital can further be a great ally to selling abroad as it allows you can have more control and provide easier reach to international markets in comparison to traditional direct channels. Platforms like Google and Facebook are both key players in this area and important to develop into your long-term strategy.
Provide world-class services before going global
Ensure your customer service is top notch and your processes are well rounded before going global. Your competition will probably be fierce, and every market has different expectations, so you need to be at the top of your game whenever entering a new market.
Strengthen your position at home
Secure strong, steady sales figures at home to be able to fund your expansion abroad. Make sure your finances and cash flow will be strong enough if you don’t succeed in the new market at first. You will need to keep bringing in revenue so you don’t get into an uncomfortable position in both markets, else it could become a catastrophe that your business might not be able to handle.
Find the right market
Do not skip market research
Don’t assume anything, research the market thoroughly before making any decisions. It will avoid embarrassing failures. There are loads of companies that specialise in market research but you can also use some great tools to get started:
- Google trends gives you search trends for specific terms worldwide or by country and region.
- Algopix provides product data for Amazon and eBay.
- Amazon, eBay and Etsy can provide a lot of useful information on prices, shipping, products, etc.
- Don’t be afraid to look at global or local export & trade organisations for help. They’ll be used to helping businesses and they’ll have a lot of useful data. Think about the World Trade Organisation, the Department for International Trade in the UK or your local chamber of commerce.
Your market research should explore local demand, prices, competition channels but also regulations and duties. Don’t be afraid to ask for help and get in touch with experts. You know your products, but they know the market.
Where should you start?
Your best bet is to start with a similar market to yours as it will be much easier to cater for. Through this you don’t need to reinvent yourself or your products. Consider regulations as well to make it as easy as possible. You can tackle more difficult markets later, once you have more experience and a bigger safety net.
If you’re a UK brand, avoid starting with China, Brazil or Russia. These markets are very different from Western countries and can break a business. You will need a lot of experience, strong dedication and the right partners to enter these markets effectively.
Is there a country where your brand or products are already in demand? If you’re already selling indirectly to another market, this might be a good starting point.
Don’t spread too thin
You will need time, dedication and money to enter a new market so don’t be too greedy and try to conquer the world all at once. You will end up having to split your budget too thin which will be counterproductive. Don’t forget you’ll be competing with established brands who know their market so you will need enough budget to reach potential customers and gain their trust.
Build a solid strategy
Choose your channels
Now that you know your market, you can decide which channels you will use to sell your products. If you decide to sell online, will you use your own website or a marketplace (i.e. Amazon, Rakuten), or both? If you want to go through local distributors, research them thoroughly to ensure they’re reliable and, again, don’t be afraid to use specialists to help you make informed decisions.
Get your numbers right
Duties, taxes, regulations and many other factors can impact your retail price and shipping/return costs. Make sure you factor that in before entering the market to check that your price and process will still be competitive. Not doing so could cost you a lot of money and you might end up with a lot of unsold stock on your hands.
Adapt to the market
Study how your new audience would use your products and if it’s missing something or needs some adapting to fit in. Electric plugs, weight and measures might vary so you’ll need to adapt to ensure people can actually use your products.
Check that your brand name doesn’t have negative connotations in another language. Heads up to the famous UK restaurant chain Zizzi, don’t expand to France with this name because Zizzi means “willy” in French.
If you’ve chosen a market where English is not their first language, you will need to invest in multilingual support. Remember you’re competing against local businesses who know the market inside out so you have to be at least as good as your competitors if you want to succeed.
Be prepared to take a hit
Build your brand first
You’re entering a new market where consumers don’t know you or your products. Don’t expect them to come running towards you unless your product is extremely disruptive. You will need to take the time to invest in awareness campaigns where your audience can get more familiar with your products. This will cost money and you have to expect a negative return on investment in the first months or years. Be sure to include this in your plan to avoid nasty financial problems.
Are you ready to expand?
International expansion is a strong commitment for a business and therefore shouldn’t be done hastily. You need a good strategy but, most of all, you need to surround yourself with specialists in different domains to ensure success.
If you would like to discuss your digital strategy and how to adapt it internationally, do get in touch with our team of expert digital consultants who will be happy to help.