Dear Ted Baker: How to go global

Dear Ted Baker: How to go global

Ted Baker selling its products in Japan is yet another sign of today’s truly global marketplace. Internationalisation is now an inescapable part of commerce – ignore it at your peril.

With companies seeing their home markets saturating, a vast number are looking to sell their products internationally. Retailers failing to seek international opportunities are falling by the wayside.

Businesses have historically shied away from overseas markets because of their complexity and the costs involved with setting up shop – eCommerce has well and truly broken that barrier.

Many regions, from Europe to Africa and Asia, see cross-border eCommerce as a key development tool. They see digitalisation and digital trade as a means to supercharge their economies in the coming years.

“Digitalisation allows businesses to unlock the potential of the internet, to go beyond small national markets and scale up their operations” says Kamil El Khatib, wh is an ICT policy analyst at African Development Bank.

Most companies that attempt a one-size fits all approach will fail. Every market demands a localised, tailored approach. Here are the main challenges that business must understand and meet when going abroad:

Payments

One of the biggest barriers is the check out. Online payments can be fragmented and weak in some markets or require specific payment platform integration. There can low adoption of digital payments in many economies, for example in Southeast Asia. And online shoppers in these markets can be sensitive to unexpected costs.

Things are moving. Before 2016, in China for example, it took 15 days to repatriate money from a global, cross-border eCommerce transaction. Now it takes less than 24 hours.

Some countries have developed a mature online payment network, yet overseas buyers in other markets still prefer to use credit cards when conducting transactions. Offline payments are still prevalent in some economies where cash-on-delivery payment methods need to be implemented with local logistics companies.

Fraud is another massive issue. Retailers are set to lose $130m in digital CNP (card-not-present) fraud between 2018-23. Transactions of this kind are essential to the growth of eCommerce and cannot be ignored.

Infrastructure

In many countries the implementation of quicker deliveries is a huge challenge. There are local stocking and distribution complexities, transport issues and weak delivery and supply-chain infrastructure. Companies are unable to meet customer expectations and lose them as a result. This has a knock-on effect for returns and exchanges.

Postal delivery systems in some regions, where there is limited Universal Service Obligation for the provision of an affordable basic service for all citizens, can create some issues. The development of reliable delivery systems goes hand-in-hand with cross border eCommerce and payment networks.

Culture

Each market has its own nuances that need to be understood. Consumers want to see their own language and currency, plus local payment options. Merely having a site in English or dollar payments will not do.

Looking to treat markets as the same, will fail. For instance, there are huge differences in language, currency and payment profiles just between Hong Kong, Taiwan, and China. Consumers here also use eCommerce differently to those in the West; preferring marketplaces, mobile, and social commerce over straightforward websites via a PC or tablet. In China customers are more focused on WeChat via a smartphone, while in Brazil and India Facebook is a huge marketplace.

Facing this fragmentation companies needs to do their research, target specifically and tailor eCommerce platforms to each country’s unique cultural expectations.

Expanding internationally can be daunting. Which countries to target and how many? Do you need to change you offering? How will they be fulfilled and distributed?

Ted Baker’s initial ploy of partnering with local retailers and distributors is a sensible approach to testing the water in Japan. This way, brands can gauge the reception of their products and brand, without hefty outlays on physical retail stores or eCommerce operations. Selling through local online marketplaces – such as Rakuten in Japan – is another viable option.

Understanding the factors that are driving change – whether that be consumer trends, the market, technology or regulations – is key to successfully penetrating overseas markets.

Elliott Jacobs is the EMEA commerce consulting director at LiveArea

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