How To Expand Your E-Commerce Business Internationally (Expert Guide)
In today’s world where the internet has made it a global village, it’s hard to ignore the thought of expanding your e-commerce business internationally.
This is a must-take shot to tap into new customer bases, enhance your brand’s global presence, and increase your business’s overall revenue.
Expanding your online store beyond the local market opens up various opportunities for you to engage with a diverse customer base, adapt to varying market demands, and ultimately drive more sales to your shop.
This article will give you a comprehensive guide and expert tips on expanding your online shop internationally.
Whether you’re a small or established brand, you’ll discover valuable insights and practical tips to help you successfully expand your online business into international markets.
Small vs Big Brand: What’s Your Brand’s Position?
When planning to expand your e-commerce business internationally, one of the key things to consider is where you stand in the online shopping landscape.
Are you a small brand or a well-established big brand?
The answer to this question will significantly influence your expansion approach and the resources you’ll need to ensure successful global growth.
Let’s take a closer look at each of them:
Small brand
A small brand typically has a limited but loyal customer base.
It often operates on the lean model, where all its inventory is managed by the suppliers who get to ship the products directly to customers.
Such a brand usually has limited resources and may rely on specialized products or niche markets to find a place in the competitive world of e-commerce.
Key challenges a small brand may face when trying to expand internationally include:
- Limited financial and operation resources necessary for managing international logistics, marketing, and customer service.
- Competition from local and established international brands can also be quite high
- Handling inventory across multiple locations can also be challenging especially when relying on suppliers for direct shipping to your customers.
However, there may still be some opportunities for small brands looking to expand beyond the domestic market such as:
- Since small brands focus on niche markets, they can find their place in the highly competitive landscape by selling products/services that appeal to specific market segments that larger competitors completely ignore.
- Small brands have much better flexibility in terms of quickly adapting to consumer preferences and market changes.
- The lean model for many small startups enables them to minimize overhead costs and focus on growth strategies with no significant upfront costs.
Big brand
Big brands, on the other hand, are well-established players with a broad customer base and good brand recognition.
As expected, such brands usually have extensive resources, including marketing budgets, logistics networks, comprehensive customer service operations, etc.
They are also capable of handling larger inventories and usually utilize sophisticated supply chain management systems.
Some of the challenges you may face as a big brand trying to enter international market include:
- Managing international logistics can prove complicated and costly for you
- Creating marketing strategies that resonate with a region’s diverse cultural and regional preferences may also be a challenge.
However, there are also several opportunities for well-established brands planning to expand horizontally. These include:
- Unlike small brands, a big brand has sufficient financial and operational resources to facilitate more in-depth market research, extensive marketing campaigns, and advanced logistic solutions.
- As a big brand, you can take advantage of your large-scale operations to help reduce costs and increase overall efficiency
- Since you already have an established brand identity, entry into new markets and gaining customer trust can be much easier.
Use The Lean Brand Approach For Small Brands
If you define your online business position in the e-commerce landscape as a small brand, this is your part.
You may want to consider the “Lean Brand” approach to expand your online store internationally.
This approach simply enables small e-commerce brands to efficiently run with minimal overhead.
It involves managing inventory through suppliers who are also responsible for shipping products directly to the suppliers.
The key benefit of this method is that small brands can greatly reduce operational costs and maintain high flexibility to market changes, new trends, and changing consumer demands.
However, it’s not all roses for this approach.
One of the major hurdles you’re likely to face is shipping internationally.
This can arise from increased shipping costs and the whole complexity tied to it, potential delays, and customer satisfaction issues.
To overcome these challenges and successfully expand to the global market, you may consider these solutions:
- Collaborate with the local suppliers in your target markets. This can help you significantly reduce shipping time and costs.
- Collaborate with international marketplaces like Amazon, eBay, and Alibaba. This can help offer you a platform for reaching out to a global audience with no need for extensive logistics management.
You may also consider taking advantage of dropshipping platforms such as Doba, Oberlo, AliExpress, etc.
Here, you’ll get access to a global network and easily find and manage suppliers for international orders.
Overall, you can adopt the lean brand approach for international expansion to allow you to maintain operational efficiency while being able to reach new markets and customers and drive growth to your online shop.
Use Third-Party Logistics (3PL) For Big Brands
As we mentioned earlier, a well-established, big e-commerce brand is much better positioned to expand internationally.
This can get even better if you incorporate third-party logistics (3PL) in your market expansion efforts.
For starters, a 3PL simply refers to outsourcing logistics and supply chain management activities to specialized service providers.
These providers usually have a variety of functions including warehousing, order fulfillment, shipping, and distribution.
This makes it easier for you to ship internationally and enables you to focus on your business’s core operations such as product development, customer service improvement, and marketing.
Because these providers already have well-established processes and networks in place, they offer you faster and more flexible shipping solutions — enhancing your brand’s overall customer satisfaction.
An added benefit of working with 3PLs is that they’re already well-established globally.
Thus, they offer you an easier path to navigate international logistics and ensure smooth and compliant operations across different countries.
HOWEVER, we advise you to take your time when choosing a 3PL partner.
Only work with providers who have a proven track record in handling international logistics as well as a deep understanding of the industry.
Additionally, ensure they provide the specific services you need, whether it’s order fulfillment, warehousing, customer brokerage, etc.
Additional features to keep in mind when looking for a 3PL supplier include:
- Their geographical coverage (ensure they’re present in the region you plan to expand to)
- Technology that allows for real-time tracking and inventory management,
- Overall reputation and reliability (check customer reviews and feedback).
Test the Market First!
Market testing is one of the essential steps in your path to expanding your e-commerce business internationally.
Before you can commit significant resources to a new market, testing the waters will help you understand the demand and reduce risks associated with international demand.
We suggest that you conduct small tests to gauge the potential success of your products in the market without bearing the financial burden that comes with a full-scale launch.
In simpler words, testing the market comes with the following benefits:
- Prevents costly mistakes by helping you detect potential issues early, e.g. regulatory challenges and cultural misalignments before you can make any significant investments
- Helps you fine-tune your marketing strategies and strategies depend on real-life feedback and data
- Helps you determine if the products you plan to sell meet customer needs and resonate with the local market.
- Testing the market enables you to understand the demand level for your products and meet consumer needs.
Create localized creatives
When testing the market, we advise you to consider creating localized materials that align with your target audience.
This includes image and video creatives in the local language and tailoring the marketing messages to suit local preferences.
And when creating the creatives, be sure to use native speakers and incorporate cultural elements.
Don’t forget to add design and imagery that’s familiar and appeals to the local audience.
Tailor your marketing messages to address the specific desires, needs, and pain points.
Run test campaigns to gather data and insights
Search engines and social media advertising can be powerful tools to help new markets. They help offer you targeted reach and measurable results.
This allows you to test specific demographics, monitor real-time performance, and assess the effectiveness of your campaigns.
Also, it helps you run A/B tests to compare how different marketing creatives and messages compare.
Finally, you’ll need to test the performance of your test campaigns to help you make more informed decisions about your market entry strategy.
Using the insights you gain from your test campaigns, you can then easily decide whether you want to proceed with a full-scale launch of your online business and how to optimize your approach to increase the chances of a successful launch.
Transitioning To Full-Scale Operations
The final step in your journey to expanding your online shop internationally is to do a comprehensive evaluation of your market test results, and effective logistics setup, and then implement various long-term growth strategies.
When evaluating your test results, you’d want to focus on key performance indicators (KPIs) such as:
- Conversion rate, sales volume
- Customer acquisition cost (CAC)
- Return on investment (ROI)
- Customer feedback
- Return On Ad Spend (ROAS)
These are crucial metrics for helping you gauge the market demand as well as the profitability of your initial efforts.
Using this data, you can easily make an informed decision on whether to proceed with a full-scale launch based on demand sufficiency, financial viability, and infrastructure availability.
If you decide to go full-scale, then you’ll need to set up your logistics operations by partnering with a 3rd party logistics provider as we discussed earlier.
PRO TIP: Analyze market trends and consumer behavior regularly to ensure you stay at the top of the game. Keep monitoring your competitors to identify potential threats and potentials and innovate with new products or strategies.
Build brand loyalty by engaging your customers with personalized communication, implementing loyalty programs, and collaborating with local partners.
Conclusion
Expanding your e-commerce business internationally offers you an opportunity to reach new markets, expand your customer base, and potentially increase your revenue streams.
However, this process requires careful planning and execution to ensure successful entry into the new markets.
This guide has just discussed the most suitable approach and key steps to follow for small and big brands when expanding internationally.
Remember to test the new markets before going full-scale to ensure you understand market demand and minimize the risk associated with expansion.
If you implement the expert advice shared in this guide, your online business will hit new heights and enjoy continued growth.
Ready to take your e-commerce business to the next level? Let TrendHijacking be your partner in helping you scale internationally.
Whether you’re a small or big brand, our services and tailored solutions will help you conquer new markets with ultimate confidence.
Act now — book a call with us today and let’s get started on how we can help you achieve worldwide success with your online shop!
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