E-commerce has quickly become a major factor for businesses across the world, as consumers’ comfort with online shopping continues to increase. With more options, better prices, and the flexibility of shopping at home, e-commerce has opened a new avenue for companies to conduct business, with global sales expected to hit $1.5 trillion in 2014. This avenue has also allowed companies to expand their operations across the globe, tapping new, lucrative markets. With this global expansion has come several challenges that businesses have to meet, as they must tailor their marketing and operational strategies to account for differences in each diverse market.
One important area companies must account for is differences in currency and taxes. Customers want to see items priced in their own currency, as any confusion over pricing can easily lead customers to leave the website. Businesses must also be cognizant of the competitive prices in each market, as simple currency conversions between markets will not always give a competitive price. The American market might be willing to pay more for an item than in Europe, or vice versa, meaning businesses will have to spend time researching each market to set their prices. Tax laws also can differ from country to country, so businesses must make sure their checkout process is correct and transparent on tax charges, or risk customers losing trust and cancelling their purchase.
Another area that e-commerce businesses must focus on is customer service, as cultural differences across countries and regions greatly affect consumer expectations. One example is preferred payment methods, which differ from country to country. In the United States, credit cards are the main way people pay for online goods, while in Germany, wire transfers are the most popular. In China, e-wallets make up the majority of e-commerce transactions, demonstrating the importance for businesses to make many payment methods available to their buyers. Companies must also realize that expectations for shipping and delivery can vary greatly. Successful e-commerce sites will research the expectations for shipping costs and delivery times to make sure that customers in countries around the globe are satisfied with their service.
There are many more issues that online stores must address when conducting business internationally, such as language differences and differing product tastes. Even with all of these challenges, the great potential of global e-commerce for a business will usually outweigh any costs. E-commerce is quickly growing, especially in emerging markets, giving companies access to more customers than ever before. Stay tuned to the globalEDGE blog the rest of this week to learn more about global e-commerce and its impact on businesses and consumers, as our November blog series looks at several aspects of online shopping around the world.