Success Stories

3 major challenges of international eCommerce

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Kate Pearson

9 months ago

International eCommerce is expanding at breakneck speed. It’s estimated that cross-border selling in the top 6 markets will grow five fold and be worth $130 billion by 2020.  Britain are the front runners, generating the most trade internationally, but setting up an international site can be tricky. This article will explore what some of these challenges are and how to overcome them.

Payment processes and multi-currency options

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Up to 59% of shoppers will not make a purchase if their preferred payment method is not offered, so it’s crucial to provide multiple options.

Payment method preferences vary: So it’s essential to research the dominant choice in each locale. For example, major European countries like Spain and France prefer credit card transactions whereas only 30% of Germany does, instead opting for Direct Debt and Wire Transfer. Alipay is China’s most popular payment method and India has shown a strong preference for cash on delivery.

Display the appropriate currency: If a website is only pricing in USD chances are people from the UK are not going to be purchasing from it. It’s crucial that your eCommerce business can recognise your customer’s location automatically and display the right currency and payment type. If not, you risk causing friction at the checkout and potentially losing sales.

Tips:

  1. You should research the country and see what is the most used type of payment method. One payment provider found that localisation can increase conversions by up to 10%. You can help boost customer confidence if the checkout process is familiar and straightforward to complete. For example payment providers Klarna can offer some of the best options suited to different countries. So most places in Europe can use credit cards however they allow Germany to use their preferred wire transfers.
  2. Going international with your eCommerce you should partner with a payment gateway that has connections to multiple banks. This will ensure you have a higher success rate of customer’s payments over just one bank.
  3. Your gateway should re-route your payments automatically through all of them for a better success rate.

Shipping, Regulations and Law

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Legal obstacles: There are limitations when shipping internationally and if certain requirements are not met, even for an eCommerce business, you can be held liable. For example, some countries need mandatory information on food packaging like nutrition or expiration dates. Not meeting these regulations can be a violation of the local laws of that country.

High abandonment rate: The number one shopping cart abandonment reason is finding out shipping and tax was too high. 61% of people surveyed agreed, so along with regulations businesses face the challenge of appeasing customers when shipping internationally.

Variations on tax: It’s important to understand the tax rates you have to pay in the country you’re looking to sell in. It even varies in different US states, tax is either charge from the origin of delivery or the destination it’s going to. VAT depends on your company’s size, where you want to trade, the quantity of goods and more. If you fail to accurately register and submit the information you could face penalties.  

Tips:

  1. Many growing eCommerce companies pick, pack and dispatch from one central location (e.g. UK). It’s just a case of partnering with an experienced logistics provider. One that can handle the complexities of global compliance and international shipping. Working with a specialised company means you’ll have reliable end-to-end support and assistance throughout the process. Here are some of the most popular.
  2. Or you could explore using local providers for fulfilment. This can be challenging to organise and a big investment but if feasible can provide cheaper, quicker shipping for international customers.
  3. Clearly display your international shipping details including cost and timescale of delivery on your website. It should be displayed on the homepage, product pages, checkout- key areas during the customer journey. Shipping internationally can add credibility to your brand and having them clearly displayed will encourage conversions.

Cultural and linguistic differences

The inability to communicate effectively with your customers can cause a big barrier when selling abroad. In fact, nearly 75% of shoppers will not purchase with you if it’s not in their native language. If you want to open your business to the international marketplace, you’ll need sufficient translations on your site and an understanding of your foreign customers.

Need accurate translation: Languages are complex and layered with subtle nuances so directly translating can change the meaning of a phrase. It’s not advised to use something like Google Translate for sites because direct translation can easily be misinterpreted. For example, KFC translated their infamous slogan ‘finger lickin’ good’ directly into Chinese which was “eat your fingers off”. 

Understand the country you’re selling to: Treating countries like they’re the same can potentially ruin your business’s credibility in that market. Different countries have different cultures, seasons and national holidays. Offering the same winter wear to the UK and Australia around Christmas is going to lose you business.

Tips:

  1. You can secure your place as a trusted eCommerce site if customers are comfortable navigating your site. Having multilingual options available that are tailored to each country you sell in. it’s also recommended you use a copywriter or native speaker to help with the correct translations.
  2. Research the location to understand cultural differences. For example if they have a national holiday coming up that is specific to that country, marketing special products can help engage customers on your international sites.

Entering the overseas market may seem daunting but so long as you do your research and use a reliable platform provider, you can easily navigate the international waters.