It is no news that Covid-19 and the widespread lockdown measures led to the increase of online shopping and penetration of e-commerce. According to Eurostat’s 2020 Community survey on ICT usage, which includes a specific section on e-commerce, in the 12 months prior to the 2020 survey, 64% of people aged 16 to 74 in the EU had shopped online for private use. Online shopping increased by 4% compared with 2019 and by 10% compared with 2015 (62%). In addition, according to Statista on average 53% of individuals in Europe bought something online from an e-shop abroad. This trend is expected to continue, with the e-commerce sector expecting a definitive growth in product sales in 2021.
So with all this growth in e-commerce, and cross-border shopping becoming more prevalent what are the exact benefits of expanding your retail business internationally?
- Increased sales. The growth of e-commerce is making it easier than ever for companies of all sizes to find and sell to new customers overseas who are increasingly looking to shop across borders in search of better prices, better quality and goods that are not available in their market. According to a Visa Global Merchant eCommerce Study 87% of executives say their biggest growth potential lies with international online sales expansion, and 66% of e-commerce firms say cross-border sales account on average for nearly a third of their annual revenue.
- More brand awareness. Selling internationally isn’t just about the money. Executives in the same study cited increased brand awareness (46%) and expanded customer base (46%) at nearly the same rate as revenue (45%) as key benefits of expanding online sales internationally. Simply put, expanding abroad allows you to build name brand recognition and establish credibility.
- Gain new market insights. By entering new markets you gain insight on best practices followed by other brands and competitors and allows you to gather data on different kinds of consumer behaviours and preferences. In that way, you build your expertise and broaden your perspective in order to be better prepared for future business growth.
- Increased resilience. Expanding your customer base can also make your businesses more resilient to economic downturns. One of the downsides companies face when they operate in only one country is the exposure to market changes. Taking your business international allows you the opportunity to diversify your markets, so your revenue is more stable. If your domestic market is slowing down, having the advantage of a global market will help cushion the company during slower economic times.
And although these benefits sound great, expanding internationally can be a daunting task with a number of challenges to overcome and little likelihood of immediate success. Even the companies already selling abroad are unsure of the strategy they are following with 51% of them not feeling completely confident that their company knows how to maximise their international online sales. Top reasons for keeping businesses from expanding into foreign markets include shipping/logistics issues, processing foreign transactions, legal/trade issues, limited marketing resources and lack of data or analytics on international consumers.
With the ExportProject, a service created in collaboration with Mediacube we help you not only identify the right market, but plan your operations carefully, taking into account all the above factors, in order to significantly increase your success chances when you’ve made the decision to expand your business abroad. Contact us today to find out more about how we can help you!