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Secrets to international success in the online world

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The UK has become the largest export economy for e-commerce in the world, with 340m shoppers coming from the US and other European countries according to Gov.uk. In addition, government figures highlight that overseas exporters have a 59% faster growth rate than retailers who do not export overseas.

Data from digital marketing company Rakuten Marketing shows that more than half of the traffic to its UK network of retailers is from outside the UK, and 15% of its ecommerce sales come from international markets.

As UK retail gains speed globally, Rakuten Marketing brought four leading international companies together to discuss the secrets to international success at its annual Symposium event in London last month.  

Chair:

Nick Fletcher, Director of Service Strategy, Rakuten Marketing

Panellists:

Simon Bird (SB), General Manager International, Savoo

James Maley (JM), International Marketing Manager, Hilton Hotels Worldwide

Damien Clothier (DC), Head of Acquisition, MATCHESFASHION.COM

Christina Maitland (CM), Head of Commercial EU, Shopstyle

Q. Which market excites you the most and why?

JM: Each international market presents a unique challenge and opportunity but the markets that excite me the most are the APAC regions. People here are the quickest mobile adopters and they are more willing to purchase using a mobile phone. Countries like China have had a 4G service for the longest period of time, and they are used to turning to this channel to purchase, which presents an exciting challenge and opportunity for retailers in this market. In addition, Africa sees huge mobile adoption and they use mobile in a very different way from the rest of the world.

Q. Are other retailers seeing the same thing in these markets?

CM: At ShopStyle, China, Russia and the Netherlands are the three locales driving us the most traffic outside of our localised site markets. Of those, we see China as the biggest opportunity for us. It's a huge market, so a small level of penetration can make a big impact. In addition, we've found that Chinese visitors have strong conversion and high AOV - they know what they want and they have a strong intent to buy.

Q. The Chinese market is historically difficult to get right, which companies are getting China and more broadly, global, strategy right?

CM: Farfetch is a company we have been impressed with. They have managed to maintain their editorial voice and USP as a global brand while tailoring their in-market offering through localisation and on-the-ground resources.

Q. Can you share any unusual experiences for companies from your own experience of setting up business abroad?

SB: The success Savoo had in Brazil was a real surprise to us. When we started our international strategy a few years ago, we had ‘knowns’ and ‘unknowns’ in terms of countries. Brazil was an unknown and we were not expecting the level of uptake we have seen. In Brazil, there is a real ‘coupon culture’ which has taken off, so we’ve seen a great level of success there.

Q. The UK is very good at exporting, what do you think it is about UK businesses that makes them so successful?

DC: We are lucky that Britishness is very much en vogue within a lot of other countries at the moment. In addition, two other areas that are less exciting but fundamental in UK business success are:

1) The postal system. The network of postal options we have in the UK means we are able to export items to other countries very quickly, which is less common in other countries; in some cases, it is quicker for us to export to Australia than for them to ship one item from one side of the country to the other!

 2) The UK has a huge pool of technological ability and this allows us to out-perform other countries. A lot of talent in the UK is moving into the world of technology and so innovation on computer systems has benefitted the UK export economy.

Q. For a company looking to expand, what tips are there on how to get there?

DC: We have taken a very organic approach; we don’t tend to target individual countries as that would become messy. Instead we focus on expanding into regions. We look at the data as we are a data-driven company and when we see interest coming in from a region, we look at what is proving popular and decide on expansion in that market. We may see that there is very little proactive outreach from us in a market, yet there is a lot of activity incoming from there, so we know that there is an opportunity for us. Without data insights, it’s a much more difficult process.

CM: That’s very similar for us. We compare what activity we are seeing within our network with third party data, which allows us to evaluate market receptivity to our product. If the data looks positive, we begin to plan our expansion tactics in that market.

Q. How can companies interested in exporting take advantage of partnerships to expand?

SB: The most obvious partnership to mention is working with affiliates who have an international presence. In addition, make sure you have a great accountant and lawyer – you need to know exactly how each market works in terms of exporting, and investing in this will same time and money moving forwards.

DC: As you get further away from western regions, Google becomes less of an important player, so it’s also important to look into partnerships with local agencies. For example, although a retailer might have a high search rate on google, in Japan, this will become irrelevant as Yahoo Japan is the biggest player. Internationally, you have to play with your global marketing tactics so having a local agency who understands the differences will really help.

CM: On that point, it’s really important to remember that social networks also change a lot so you need to ensure that the channels you are using have relevance in those markets. Conducting research or partnering with an agency who has this knowledge will help.

Q. For smaller businesses, is there a risk of spreading yourself a bit thin?

CM: The point of online is that it's global, without boundaries. There's no such thing as a one-market offering - you just have AN offering, and whoever wants your offering has access to it and should be able to purchase it. In my mind, if you have an online presence, you're already on your way to being a global business.

JM: It’s important to use the UK as a base when you are starting up, but when you really have a solid presence in these other markets, you should have a physical location there too. Local presence physically is really important for your customers as you become bigger and more established.

Q. What is your final piece of advice?

JM: When looking to expand internationally, make the best use of partners possible. If you don’t have your own data insights coming from a certain market, use partners who have that knowledge and data. If they have a footprint in that market they can help with a more in-depth knowledge of the patterns of your audience in that market. In addition, speak to your peers in that space; there’s nothing better than insights from people who have been there.

CM: Leverage your partners as a low risk and low cost way of entering a new market. In addition, do your homework. Find out who your customer is likely to be in that market and what their spending habits are. Never run too fast into a new market, do your research and you will reap the benefits.

DC: Back to the point of spreading yourself too thin: look at where the opportunities are and go into those. As online retailers we can often forget that the offline world exists and I think there is a huge benefit to using offline resources. For example, PR agencies can really smooth the road for you using both online and offline outreach tactics. As consumers in that market become more familiar with your name, using the offline presence helps create multi-touch marketing which allows you to build a brand presence in a new region.

SB: Understand that the local dynamics in terms of shopping and sales may differ from market to market. In addition, do your research not only into the audience, but also into the exporting laws in each country and region; getting money out of a country changes for each country and you have to understand the processes before you begin. Don’t underestimate the importance of local contacts with local knowledge. It’s a challenge trying to bridge the gap between your home market and a local market, but their knowledge can help you successfully build your business in a new market, brick by brick.


Published on Friday 08 May by Veebs Sabharwal

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