So, your e-commerce company has conquered business operations on a national scale, and now you are eyeing international customers. Or, maybe you are a small business, and you are looking overseas to expand your ecommerce customer base. Globalization for any business, big or small, can be an intimidating challenge to consider. However, the benefits of taking your business global far outweigh the pitfalls.
The business climate of today heavily leans on digital interactions and transactions; meaning that even if you weren’t thinking of going global, the current business environment might force you to for your business to stay competitive.
In fact, Rutgers University highlights the popularity of companies going global, stating that, “72% of companies plan to increase their international share of the business.” It would follow reason that your e-commerce business contributes to this 72 percent.
Read below to understand some challenges of expanding your business globally, strategies to avoid pitfalls, as well as what you stand to gain from deciding to take your e-commerce business global.
Challenges of Taking Your E-commerce Business Global
When stationing your business operations locally, you have a firm understanding of operational costs, cultural norms and customs, and compliance regulations.
However, when taking your business global, especially for e-commerce businesses, these aspects of business will become an unfamiliar territory. It’s important to take these business matters into account when setting up shop overseas.
Different locations have fundamentally different ways of going about business. One noticeable difference and one that will directly affect you if you aspire to conduct global transactions is currency.
In the process of sending and receiving money in another country, you are likely to deal with the price of currency exchanges.
Exchanging currency back and forth between your country’s dollar and your partnering country’s currency can become pricey, depending on the exchange rates.
An additional cost to factor in when considering globalization is shipping. Any e-commerce owner understands the necessary cost of shipping and handling in a localized business setting.
This price will most likely increase with differences in shipping methods, including the cost of shipping overseas. Delivery methods will be different abroad, and taking this value into account will be a necessary obligation to factor into business operations.
3. Cultural Differences
In many cases, especially if you have plans to expand radically, you won’t be dealing with your regular customers. Going global means differences in language and cultural norms. Things you and your team must prepare for when taking your business overseas will be overcoming language barriers and understanding cultural differences.
A business that can successfully operate through translation issues while being sensitive to other cultures’ norms, customs, religious holidays, etc. will find the global transition immensely easier.
Imagine trying to establish and maintain a business partnership if you can’t properly communicate with them, or are even insulting them because you don’t understand their cultural values. If you aim to expand your business globally, you must understand and overcome this challenge for a successful company.
It’s hard enough complying to the policies and laws in your own country. Furthermore, you may have become accustomed to the ins and outs of business operations where your company is located. Moving operations means adhering to new regulations, and if you aren’t familiar with the protocols of the region you are looking to spread to, it can land your business in hot water.
To further complicate things, very recent mandates have taken effect concerning business operations and data security in the European Union. The GDPR, or the General Data Protection Regulation, is changing the way businesses obtain and secure data.
Even if your company operates outside of the EU, if you have clients in the EU and hold their data, you’ll need to adhere to GDPR policies or risk significant fines. This is especially important for e-commerce businesses that rely on a considerable amount of data to operate smoothly. Strong knowledge of the GDPR, among other regulations, is needed to expand your operations to other regions.
Even with all the challenges that can arise when taking your business global, companies are still choosing to make the leap. This decision is easily made because the benefits of (successfully) going global far outweigh the challenges.
Benefits of Going Global:
The foundational reasoning behind taking your business global is business 101 — expansion and growth. Expanding to new and broader horizons means more markets, and more markets mean more customers. Furthermore, every business-savvy professional knows of these benefits, and with advancements in technology making it easier than ever before, globalization cannot be avoided to compete as a business today.
Taking your business to new markets carries the benefits of new markets and customers for your products, and therefore decreasing your dependency on your current market. If done correctly, the revenue of your new markets and customers is well worth the investment of globalization.
The key phrase here is “if done correctly.” Navigating the pitfalls of the challenges of going global will be crucial if you want your business to survive in world markets.
Strategies For Going Global:
Many of the challenges above involve a firm understanding of the cultures of the regions you plan on expanding your business to. When conducting international business, things will go wrong, get misconstrued, and misunderstandings can happen. It is your job to minimize these issues the best you can and possess the adaptability to handle these issues when they arise.
Global operations demand you to get out of your comfort zone as procedures will be out of the norm. Because you will be in unfamiliar waters, it is vital that you do your research to gain an extensive knowledge of your new customers and their culture(s).
To overcome language barriers, hire a translator, actively learn the language, and make sure to provide translated versions of your website. Understanding the language of regions you plan to move to will allow for clear communication, reducing the possibility of errors and misunderstandings.
Cultural sensitivity will extend beyond just learning a language. A business can falter due to a faux pas, and when operating in a culture you don’t fully understand, the opportunity to insult a community of people increases when you expand.
It is best to understand religious and cultural values, etiquette, and other cultural norms of the regions you’d like to market to. Being culturally aware will increase your chances of successful expansion.
You wouldn’t negotiate a foreign business partnership without at least doing a bit of research, so why wouldn’t you take the time to investigate the place you are taking your business to properly? The information above is a start on how you can get started expanding your business.
However, going global requires extensive thought and planning, especially for an ecommerce business. But when it’s all said and done, the benefits will far outweigh the challenges of globalization.