Global Phasing: 5 Paths to Expanding Your E-Commerce Business into New Markets

July 1, 2020

As opportunities emerge in cross-border commerce amidst the current global event, many businesses are beginning to understand the importance of geographic diversification when it comes to their selling strategy.  While taking your e-commerce website into multiple global markets all at once can be overwhelming, here are some ways e-commerce merchants can expand in phases.

As more and more international consumers gain access to the internet and smartphones, cross-border e-commerce is increasing in popularity around the world. There’s never been a more profitable time to be a cross-border e-commerce merchant. However, rolling out an aggressive global expansion strategy in several different markets at once can be complex and overwhelming because consumers in different countries and regions will have different needs and concerns and it can be challenging to manage all at once. Brands that have the foresight to conduct their due diligence and build out a strategic plan will have an easier time making decisions and avoiding operational headaches down the road.  

There's no singular path for cross-border e-commerce expansion. Each online merchant needs to closely examine their unique circumstance. To help get started, here are five common pathways to global expansion based on what your brand is experiencing now.

1. Existing demand in geographic markets.

Products vary in popularity across the world. What’s hot in one market may be a flop in another. However, you may already be noting traffic to your e-commerce website from other countries based on what you sell. In some cases, online retailers may experience an explosion in international traffic on their website driven by social media campaigns, organic search, or word of mouth. Looking at traffic and sales in international markets is an excellent starting point to assess new market entry. But do keep in mind the importance of localizing your website for those markets so as to capture and convert the traffic coming from those international sources.

2. Adjacent markets with strong logistics or entry routes.

For brands that are making their first foray into the world of cross-border e-commerce, a smart choice may be to enter a market that is physically close to the domestic market. For example, U.S.-based brands often start with Canada as their first global market due to the close physical proximity and logistics infrastructure. Similarly in Europe, where several countries are in close proximity, it might make sense to expand slowly to markets adjacent to where your brand is based or may already have a presence.

3.  Language and/or cultural similarities.

If your brand is based in an English-speaking market like the U.S., consider starting your cross-border e-commerce journey by targeting other English-speaking countries first, such as Canada, the U.K, and Australia. Also, depending on what types of goods you offer, you may find cultural synergies in foreign markets. An example of this: brands that sell surfing gear and clothing from the U.S., such as Outerknown, often have crossover appeal in other markets with big surfing cultures, such as Australia.

4. Channels and wholesale partnerships.

Many emerging e-commerce retailers join forces with wholesale distributors and channel partners to help them broaden their reach in foreign markets. Wholesale partners can serve as a real-time window into which global markets are prime for direct-to-consumer expansion. This was the strategy that designer accessories retailer MZ Wallace adopted to help them ramp up their international presence. Additionally, the brand leveraged Flow to manage and control dynamic pricing on their site to align with their wholesalers in the region so as to avoid creating friction across both channels.

5. Unexpected niche markets.

Sometimes, a retailer is in the right place at the right time when one of their items or a product category becomes an unexpected phenomenon or hot trend that goes global. For example, MZ Wallace found that their goods were particularly popular in Japan, where they have extended their marketing efforts and operations to achieve strong results. The brand also saw growth in unexpected markets like Peru and Switzerland.

Do any of these five paths resonate with your brand? Depending on where your brand is in its growth, you may see multiple paths that could work for going global. Keep in mind, though, that in each new market consumers will have country-specific preferences along the e-commerce journey. Making the online shopping experience on your site feel domestic for each shopper in each market is the second step to executing a winning global expansion strategy. Flow can help.

To determine your brand's global readiness as an e-commerce merchant, download our International E-commerce Kit.

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