Differentiate with digital

Fruugo and Cross-Border Online Shoppers

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Zia Daniell Wigder
August 20, 2009

Zia_Wigder By Zia Daniell Wigder

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
following:

 Rolling out in targeted, small markets first. Fruugo currently
operates in Finland, Sweden and the Netherlands.  In addition to having particular in-house
knowledge of these markets, the company is gaining expertise prior to rolling
out services in some of the larger European markets. Sweden’s use of its own national
currency as opposed to the Euro also provides a good opportunity for the
company to hone its ability to handle multiple currencies.

 Focusing on specific categories. Rather than trying to target every
category, Fruugo has focused its efforts on a handful of categories: Mother
& Baby, Outdoor, Health & Beauty and Home & Decoration.

 Helping to streamline cross-border issues for online retailers. In
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.

 Facilitating language translation. Fruugo makes it easy for online
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.

 Mastering local online retail regulations. Fruugo is helping
companies navigate the complex landscape of local regulations. In Finland, for
example, returns must be free: online retailers cannot charge shipping or
restocking fees. In Germany
and Austria,
similar situations exist. By contrast, in Fruugo’s other two markets aside from Finland – Sweden and Netherlands – such restrictions
don’t apply. 


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