E-commerce Merchants International Expansion Issues

Goals

To understand what kind of issues large e-commerce merchants are faced with when expanding internationally and how they deal with them. This information will be used for a project.


Early Findings

  • Amongst the main issues facing e-commerce merchants looking to expand internationally are language, cultural perceptions, technical infrastructure, logistical issues, customer support, currency, and payment methods.

Currency and Payment

  • E-commerce merchants thinking about international expansion have to be able to process payments from a variety of different currencies.
  • Therefore they have to choose a payment service provider that has the capacity to process multiple currencies.
  • The payment provider should also be able to offer many different payment options as different countries use different means of payment.
  • For example, credit cards might not be so popular in many countries as a means of payment.
  • When it comes to prices, the e-commerce merchant also has to be able to show prices in different currencies by converting the local currency to the target country's currency on its website.
  • Research has shown that 33% of online shoppers would drop a potential purchase if the price was only shown in US dollars and that 92% of those have a preference for shopping on websites that show prices in their local currency.

Technical Infrastructure

  • It is important for an e-commerce company to have a strong website that is optimized for global business. This means that the site needs to have location settings in order to specifically tailor the site according to the region or country it targets. Things such as prices, language and shipping rates would vary depending on the target market. The best option is to opt for a product that adjusts these details automatically.
  • In addition, internet speed differs in various countries, from extremely fast to extremely slow and e-commerce companies have to take this into account when designing their local websites. Having servers located in the US and websites targeting countries such as India could result in a slowdown when loading a page, and a potential loss of customers. Studies have shown that 50% of online shoppers give up after 3 seconds of waiting for a page to load.
  • A solution to tackle this issue is to have a host that includes Content Delivery Networks in order to load the webpages faster. What this means is that the host will use cache servers located closer to the target market, which will make the loading process faster.

Logistics

  • An e-commerce company that is planning to sell digital products does not have to worry about this issue but any company that has to send physical goods to a client will have this issue as a major one. These companies will be aced with issues like cost of international deliveries, customs, regulations and return policy costs.
  • A partnership with a logistics company specialized with international delivery represents a potential solution to this issue and would take full responsibility for deliveries, but their services come at a cost.
  • Another solution is for the e-commerce merchant to build an internal team that would take charge of this responsibility.

Proposed next steps:

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