Member Article

Making your internationalisation plan work

The OC&C Strategy Consultants, in a study in collaboration with Google, report that online sales from outside the UK will rocket from the £4bn generated in 2012 to an estimated £28bn by 2020, accounting for around 40% of total sales revenue. For online retailers the arrival of increasingly good platforms, cheap translation services and global banking means that pretty much anyone can now sell internationally. To succeed however, trading to a new region should not just be seen as an extension of a local market.

As the CEO of a print-on-demand, e-commerce platform I spent much of last year rolling out our marketing, sales and operations strategy outside Europe and the USA. We are now active in 19 markets and 12 languages and our customers can pay in 11 currencies. We also operate five production sites in Germany, Poland, the USA and Brazil and deliver to about 200 countries. How did we make our internationalisation plan work? Here are five things we learned along the way:

1. Going global might mean appearing local

Your internationalisation strategy should be about making things easy for your customers and this might mean localising your brand and website. Customers should be able to access your site via their own country domain name and pay in their currency. Most consumers want to buy from a local service and some of our sellers are only interested in reaching their domestic market, so we have had to provide that, alongside a global service for those that want it.

2. Check on the local tax and business rules

This is where partnering can sometimes be a better bet than organic growth; you take on a business which already has all the right permits and understands how to do business in the region. For example, in the USA there are tax variations between the States, which need to be taken into account, along with the tax issues surrounding cross-border sales. If a customised t-shirt is sold by a YouTuber in New York and shipped to Brazil, but the transaction happens in Berlin, where is the tax paid? These are issues an international e-commerce company must be on top of. Spreadshirt is not only an online retailer, but we also provide a platform for other e-sellers, so this is especially key for us; it’s our job to make this a smooth and efficient process. No-one wants to get bogged down in tax issues when they’re creating and selling their ideas.

3. Get your product to the consumer

Shipping is a vital component in the supply chain and it must be fast, reliable and priced right. In 2014 we added delivery to over 150 new countries. Within weeks, we had to delist 10 countries due to fraud and delivery problems. However, there were some nice surprises within the mix. Some countries even with small populations, such as Bermuda, Guadeloupe and French Polynesia, are doing very well. Other countries had good sales, but have had to be paused until delivery issues are sorted out. Spend time getting this right.

4. Plan to get on the ground

Many of our key sellers build a fan base on global social platforms such as YouTube and Facebook - making demand for their products truly international. We see huge traffic coming from countries like India and Brazil, meaning that eventually shipping will not be enough to satisfy consumer expectations. We’ve therefore acquired last year a partner in Brazil and are looking at India, Turkey and other countries, to reduce the shipping time. A demand driven approach from traffic or shipped orders always governs our next steps. You have to go to where the customer is.

5. Consider cultural differences

Consider the possible complications of growth in different regions. Are they culturally similar to your initial countries? This is not just language but consumer attitudes. For example, the US and UK are vastly different in their consumer behaviour, so perhaps look at the possibilities of partnering or acquisition in countries where doing business might be complicated or culturally very different. Often, the quickest route to success in a region is to find locally successful companies to partner with.

The world is a great place to do business and in our experience more valuable orders were gained than lost due to problems. Glitches can be easily sorted out by switching off certain payment types, changing a shipping provider or turning off a whole country.

The process of going truly global has been a positive move for us and the outlook for 2015 is extremely optimistic. The goal is to continue expansion via acquisition, access, and strong international partnerships with an eye towards local production hubs. But while growing internationally is an important aspect of doing business, all the successes generated by launching in new markets can be rapidly jeopardised with a poor delivery and supply chain so be sure to have a clear strategy with trusted partners before taking that next step.

Author: Philip Rooke, CEO of Spreadshirt. Follow him on Twitter @PhilipRooke

This was posted in Bdaily's Members' News section by Philip Rooke .