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Beyond Borders: Navigating the Challenges of eCommerce Expansion

ecommerce global expansion

eCommerce continues to flourish, with impressive growth figures year after year. In 2018, global online sales reached almost $3 trillion, and are expected to hit $4 trillion by the end of 2020.

Despite eCommerce taking an increasing slice of the retail pie (which could now be as high as 15 percent according to recent figures), it is increasingly challenging, with competition and cost pressures creating significant issues for merchants of all sizes.

Of course, the usual hurdles play their part; legislation, logistics issues, operational costs and so on – but arguably the biggest and most rapidly evolving demands are around meeting customer expectations.

 

The customer is king – and they are everywhere!

Today’s digitally-connected consumers can be tough customers when it comes to the standards they demand from their online experiences. They’ve come to expect fast, seamless, convenient, secure shopping journeys that support their needs and choices wherever, whenever and however they want to buy.

What’s more, online shoppers are widening their horizons as they seek the best prices and products from wherever they can easily source them – including from abroad. According to Eurostat, 36 percent of European consumers purchased goods and services from other European countries in 2018 – and 26 percent bought from companies outside of Europe. This trend for cross-border shopping is growing rapidly, powered by the forces of eCommerce giants, improved shipping options and the borderless nature of the internet itself.

But for many merchants, supporting cross-border commerce is by no means an easy task. There are a growing number of challenges for retailers to take into consideration when expanding internationally or improving their overseas operations. There’s a need for local warehousing and logistics services to support same-day or next-day delivery internationally, as well as enabling free returns in a way that suits the customer.

But before the physical fulfilment process can even start, merchants must have a robust purchasing experience in place that works across all their target geographies.

 

Keep it local to make it global

To succeed in cross-border eCommerce, merchants must now tailor their customer experience to each market. This means offering international currencies, local language web pages, and an expanded range of payment methods.

Alternative payment methods are growing in popularity, with unique local payment methods establishing a customer stronghold in many countries such as The Netherlands, China and Germany. Research shows that offering the top three payment methods in any market, rather than only the top one, can increase merchants’ conversion rates up to 30 percent. The combination of preferred payment options, with local language and currency, offers a convenient, familiar and more trusted payments experience that can help boost cross-border sales.

It is therefore critical for cross-border merchants to understand local market preferences and connect with the relevant domestic acquirers in each locale. Local acquirers, compared to international acquiring networks, are better attuned to domestic regulations, local market conditions, have access to more complete information, often have higher authorization rates and frequently have more competitive rates.

Of course, successful international expansion requires not only offering shoppers the right payment methods and acquiring options, but also the ability to configure them quickly and efficiently. This is perhaps the biggest hurdle for merchants to clear without the right support.

 

Securing the journey

For merchants that are expanding their online presence across borders, enabling a localized customer experience is a critical step towards success. But without considering a localized fraud management strategy in tandem with a payments strategy, the road to cross-border profitability could be a bumpy (and costly) one.

Understanding the risk profile of fraud trends in each country is an important step, as is analyzing cross-sector fraud intelligence and implementing tailored fraud strategies to address the characteristics that are unique to both genuine buyers and fraudsters in each country.

It is also valuable to consider a solution serviced by a global risk team, which has the local experience needed to combat local threats.

 

Chris Andrews, Head of eCommerce Europe at ACI will be exploring this topic further as part of an expert panel session entitled: ‘Ready To Grow? Key Considerations for Expanding Your Company’s Global Reach’ at eTail Europe, London on Tuesday, June 18 at 2:50pm.