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Going international with e-commerce – how to get it right?

Having overtaken the U.S. market, Europe is now the world’s largest online shopping region (Centre for Retail Research, 2012). The opportunity for cross-border sales is certainly growing – but how can merchants turn domestic success into international expansion? And what are the challenges they will face? By Shane Fitzpatrick

GENERAL MERCHANDISE

Going international with e-commerce – how to get it right?

Having overtaken the U.S. market, Europe is now the world’s largest online shopping region (Centre for Retail Research, 2012). The opportunity for cross-border sales is certainly growing – but how can merchants turn domestic success into international expansion? And what are the challenges they will face? By Shane Fitzpatrick

According to the Centre for Retail Research, more than €200 billion was spent by Europe’s estimated 240 million online consumers, and e-commerce sales are predicted to keep on growing by 16% in 2012. No surprise that retailers such as Marks & Spencer have recently announced that they will be trading online in 10 countries by the end of the year.

Online sales in the UK are expected to grow by 14%, but merchants have even greater international e-commerce opportunities in other high- growth areas. For example, growth in Poland is predicted to be 24% followed by France (22%), Sweden (18%), Italy (18%) and Norway (17%) (Source: Eurostat 2012). These trends present great new international expansion opportunities for CNP (customer-not-present) e-commerce merchants. In addition, one could argue that the Queen’s Jubilee and the 2012 Olympics also played an important role in fuelling international e-commerce appetite for British products – so timing has never been better.

Attitudes towards cross-border e-commerce can vary widely across Europe and consumers can be cautious about shopping from e-commerce stores in other countries. But that just means that merchants need to adapt to the local shopping habits in each market and build consumer trust by translating websites into local languages or offering additional payment methods. Taking this into consideration is an important step in embracing international e-commerce.

At the same time, retailers should not underestimate the increased complexity and operational demands of handling international sales. Fortunately, adopting a standardised approach to managing international payments, offering multiple currencies and online fraud tools can help minimise the costs and risks associated with cross-border selling.

Sounds too complex? Not really. E-ecommerce merchants should work hand-in-hand with their payment acquirer to help develop a cross border strategy to meet their commercial objectives. Key items to consider are asking for advice on the methods of payment in each of your markets – and making sure that you offer your customers their preferred local currencies. Equally important is to consider whether your customers’ online experience could be improved, and again you should work with your acquirer to implement new solutions such as customer profile management or soft descriptors to help improve authorisation rates. By embracing these simple guidelines, merchants have a real opportunity to embrace international expansion.

Shane Fitzpatrick is the President and Managing Director of Chase Paymentech Europe Limited

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