Yesterday I had a chance to join the fantastic Global eCommerce Leaders Forum here in New York. Leaders from Puma, Borderfree and Alibaba delivered keynotes at the event, and in the afternoon, I did a quick presentation on five key themes in global eCommerce to tee up a panel on international expansion:
The Asia pivot. Arguably the biggest story in global eCommerce over the past five years has been the rise of China as an eCommerce force. No other eCommerce market has rivaled China’s ascent to power: Between 2009 and 2014, revenues increased by 16-fold, reaching over $440B in 2014. That shift fundamentally changed how brands view eCommerce in Asia. Instead of contemplating expansion into Asia only after years of operating in North America or Europe, a digital strategy for Asia—and China in particular—is now front and center for many brands.
Options for brands beyond direct sites. Today there are very few brands whose global expansion plans focus exclusively on localized, direct-to-consumer sites. Cross-border shipping and marketplaces —two relatively low-cost, low-risk approaches to international expansion—now factor into the consideration set of almost every brand evaluating new global markets. Indeed, today many solutions are available which enable brands to tap into online shoppers overseas without massive investments or years of preparation. While direct sites will remain a core part of brands’ global expansion efforts—and their value unrivaled in many ways—other approaches will increasingly supplement this tried and true method.
Growing investment in customer insights. Many brands launching new eCommerce offerings around the globe find themselves at a loss for good customer data. Brands that rely exclusively on marketplaces, for example, many not have access to in-depth data on shoppers’ online purchase paths. Other companies may get hit by strict regulations on consumer data collection and usage in certain markets. However, brands also fall short in terms of understanding international shoppers because they don’t invest sufficiently in understanding how customers shop online in new markets—often in contrast to the massive investments they’ve made in their home market. When this lack of investment is combined with the steep learning curve inherent in new markets, brands can find themselves lacking actionable insights. We expect to see brands investing to better understand shoppers in all of their markets rather than just being an expert at home.
Mobile. There’s often an erroneous assumption that mobile now dominates eCommerce in every emerging market around the globe. While it’s clear that mobile is a transformative force everywhere, the pace at which it’s overtaking desktop-based eCommerce has varied by region. In markets like China and India, for example, mobile now represents an extremely high percentage of eCommerce revenues—for some eCommerce organizations, the majority of sales are now driven by mobile. In other regions like Latin America, the shift to mobile has happened at a slower pace, with many retailers seeing mobile figures more in range of 10-15% of total sales. Tablets, too, play a varying role in eCommerce around the globe, with tablets driving a solid percentage of online sales in markets like Brazil but playing a lesser role in markets like India.
The path to profitability. Finally, we tackled the profitability theme that we’ve discussed in previous blog posts. In years past, business plans tended to include overly aggressive assumptions for new global initiatives—subsequently, missed goals were often the norm. Today, however, eCommerce leaders are increasingly under scrutiny to outline and deliver on a path to profitability.