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Business Management

Top Tips: Breaking down the barriers to global commerce

25-11-2015-breaking-down-the-barriers-to-global-commerceKlas Back is General Manager of International and Payment Strategy at Braintree, a PayPal owned online and mobile payments platform. He is responsible for Braintree's global operations and customers, as well as managing their international offices in London, Sydney, Melbourne and Singapore.

Klas shares his top tips on breaking down the barriers to global commerce.

Odd as it may seem, retail still represents one of the most fruitful ventures in the start-up community. Would-be business owners simply cannot get away from the allure of vast consumer markets and numerous niche audiences just waiting to be tapped. Entrepreneurs are not ones to shy away from the opportunity and challenge these trends represent, so the beat of commerce disruption goes on.

Much of the innovation today revolves around bridging the gap between traditional commerce and new mobile experiences, and those truly adventurous souls are taking the concept to new lengths. E-commerce presents this instant opportunity to extend not only across cities and states, but also across borders and oceans. With the right plan in place, global commerce can be done nearly out of the gates.

Global ecommerce sales are expected to reach $1.4 trillion by 2016, an increase of 14% since 2012, according to Deloitte Digital. Combine this huge potential with projections that many emerging markets will grow even faster than the U.S., getting into the game today means hitting the ground with an understanding of how to scale quickly on a global level.

In theory, it should be simple. Consumers are consumers the world over, right? Everyone likes to buy things. In practice, however, the act of launching e-commerce in foreign countries does raise many questions, and there are a number of subtle factors to consider that can be the difference between success and failure.

Here are the top five tips that any entrepreneur absolutely must get right to have a chance at success on a global scale.

Expand in the right place, at the right time - Ultimately, the decision to expand internationally boils down to two primary factors: Does my product category mesh with the tastes and desires of a given population (or can it be adjusted to do so); and, how well is a given country positioned to grab hold of mobile shopping.

Point one really becomes a function of ground-floor planning as you craft your business plan. If you know you want to be a global operator, take the time to learn about product trends in various markets around the world. Gather as much data as you can about who’s buying what, and where. There are many resources to consult, from the likes of Deloitte, PwC and EuroMonitor.

Get mobile right first - Mobile shopping represents the fastest way to get in front of the largest possible cross-section of global customers. PayPal recently conducted a 22-country survey of nearly 18,000 consumers to determine mobile shopping trends internationally. Interestingly, China, UAE and Turkey emerged as the top performers; in each of those nations, more than 50% of online shoppers said they’ve bought online via a smartphone in the past 12 months.

In most countries the incidence of smartphone shopping via an app is higher than doing so via a browser. As a final step to reduce friction, you need to be thinking in terms of an app strategy in addition to ensuring mobile browser functionality. Getting mobile right first is a key route to get in front of your audience as rapidly as possible. However getting this right means investing in the experience that mobile offers. It absolutely has to be easy for consumers.

Take away the barriers - By now, it is a known quantity that eliminating a customer’s need to enter payment information at online checkout creates the ultimate frictionless purchase environment. Time and again, this strategy has proven to boost the consumer experience, improve loyalty metrics and, most importantly, increase sales and average order volumes.

Adapt or fail - When it comes to international there are two key adaptations to how you present your site that need to be made, or risk losing sales at the last hurdle.

  • Currency consistency: Even though it is very easy these days to accept and convert among virtually any global currency, there’s a rub. It is all about the presentation. Be sure to set your site to operate in the relevant local currency as this will also help the buyer to determine if the purchase can be considered a good deal.
  • Tax compatibility: Beyond reality-checking various standing regulations for international trade  whether tariffs, duties, taxes, banned products and shipping rules, knowing the native tax code and legal points represents a final area where familiarity can make or break your retail business.

Adjust your strategy to cultural norms - Culturally speaking, there are a few tenets to live by.

  • “Know what not to sell.”
  • “Know your cultural holidays.”
  • “Do business as business is done.”

Every culture has its own set of taboos and customs and some can lead to opportunities. In Israel, it is customary to bring a gift when invited to someone’s house for a holiday meal, during Ramadan, activity and spending on food and consumer goods see a marked increase. Promoting these kind of items online in lead up to holidays could lead to boosted sales.

In short, you need to know how to do business as business gets done.

In the modern economy, going global is not as difficult as it may seem. There are a number of perceived complexities to cross-border commerce but, when you really dig into it, that’s all they really are: perceptions. If you launch your business with the right foresight, strategic priorities, technology partners and tools in hand, going global is not measurably more complex than sticking to domestic markets; the upside of exposing your business to exponentially more lucrative markets far outweighs the risk. 

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