E-Tailers finding more opportunities to expand abroad
Retailers have always looked eagerly to foreign markets as a way to increase sales. In the past, such a bold move was generally limited to industry leaders such as Wal-Mart due to the huge expenses associated with opening new brick-and-mortar stores. However, with the rise of digital shopping in developing markets, there are more opportunities for retailers to expand their reach.
Internet penetration in developing markets such as Latin America has led to a sharp uptick in online shopping, according to research from Nielsen. The study found that nearly half of Internet users worldwide plan on making an online purchase within the next six months. Nielsen’s study polled customers from as many as 60 different countries, which illustrates the potential global reach for retail brands considering international expansion.
“The lightning-fast pace of change in the digital landscape has ushered in a consumer mindset that is both adventurous and exploratory when it comes to online shopping,” said John Burbank, president of strategic initiatives at Nielsen. “Consumers everywhere want a good product at a good price, and the seemingly limitless options available in a virtual environment provide new opportunities for both merchants and consumers. The market for fast-moving consumer goods is no exception.”
Merchants with eyes for international customers should consider all the challenges associated with expanding abroad. Websites will have to be localized for the different markets in a way that makes sense for customers in that specific region. Simple translation will not always do the trick in that regard.
Another point to consider is order fulfillment. Some services such as Fulfillment by Amazon and eBay Global Shipping may allow merchants to expand into other territories, but it comes at a cost in terms of margins.