August 20, 2009
Over the past year, many online retailers have looked to tap
into global online shoppers by adding international shipping options. International shipping presents a relatively low-cost first step into
global markets – it also allows retailers to tap into the increasingly international
consideration set of consumers around the globe. This topic has been key within
our research this year: our international shipping report addresses this issue from the US
perspective and we’ll soon be posting a report on cross-border shopping within Europe
This morning I had the opportunity to speak with Juha Usva,
the CEO of Finland-based Fruugo, a European site that
aims to facilitate cross-border shopping within Europe
Launched in public beta in May, Fruugo’s current offering is part international
checkout solution, part international shopping mall. Fruugo allows European users
to order from online shops in other countries – today some 70 online retailers
are up on the site in three different markets. Revenues are based on a percentage of sales.
Below is a quick summary of our conversation – Fruugo is aiming to tap into cross-border demand through the
operates in Finland
knowledge of these markets, the company is gaining expertise prior to rolling
out services in some of the larger European markets. Sweden
currency as opposed to the Euro also provides a good opportunity for the
company to hone its ability to handle multiple currencies.
category, Fruugo has focused its efforts on a handful of categories: Mother
& Baby, Outdoor, Health & Beauty and Home & Decoration.
addition to handling international payments and local currency display, Fruugo
manages other cross-border issues for retailers. For example, despite the
duty-free nature of cross-border shipments within Europe
some products still require payment of value-added tax (VAT). Fruugo helps
retailers calculate these costs upfront.
retailers to provide translated content for consumers in other markets – the
amount of translated content is determined by the retailer. Fruugo also offers
machine translation technology from Language Weaver to help consumers
understand retailers’ offerings in other languages.
companies navigate the complex landscape of local regulations. In Finland
example, returns must be free: online retailers cannot charge shipping or
restocking fees. In Germany
similar situations exist. By contrast, in Fruugo’s other two markets aside from Finland – Sweden