The Globalization of eCommerce in 2012
As we look back on the year 2011, eCommerce organizations continued to expand their global reach. A growing number of US and European retailers started shipping internationally. Brands enabled eCommerce on their own websites in new markets and launched online stores on marketplaces in multiple countries. Other companies with an interest in global eCommerce used the year to gain insights into new markets, determining which ones to prioritize in the years ahead. Rumors swirled about Amazon preparing to enter India. Or Brazil.
For many companies, however, the globalization process is still just beginning. Aside from a handful of companies that operate eCommerce sites around the world, few companies have a truly global online footprint. The growing number of US- and European-based companies that ship internationally will see revenues increase from these markets, but will start to hit a language ceiling: Close to two-thirds of online consumers in both France and Germany, for example, agreed with the statement, “I only shop from websites in my native language.” In the UK, the percentage is close to three-quarters.
2012 will not be the year that eCommerce organizations blanket the globe with localized offerings – they will, however, continue stepping into international waters. Next year we expect to see :
- More brands will sell direct in international markets. It is now commonplace to see large consumer brands operating their own eCommerce-enabled sites in markets such as the US and the UK. However, only a handful such as Dell and Burberry operate transactional websites in dozens of markets around the globe. Next year, an increasing number will look to extend their reach online globally, with brands expanding beyond French-, German- and English-language eCommerce sites in Europe, and increasingly enabling transactional sites in Asian markets such as Korea and China. Stay tuned for a more in-depth look at this topic in our upcoming report, due out within the next few weeks.
- International shippers will focus on consumers in specific markets. A growing number of online retailers embraced international shipping this past year, with well-known US brands such as Crate and Barrel, Williams-Sonoma and Bloomingdale’s all launching global shipping in 2011. In 2012, however, retailers will start to target customers in specific countries. The era of simply shipping to dozens of global markets while paying little or no attention to any individual one will give way to a more focused approach. Companies will invest more in localized landing pages, spend more on paid search and create shipping promotions targeted at shoppers in key markets. The most aggressive of the international shippers will look to improve the customer experience in their most lucrative global markets by exploring local fulfillment options.
- eCommerce companies’ “Tier 1” markets will include multiple emerging markets. In the past, eCommerce globalization for many companies meant launching a handful of sites in North America and Europe, with Japan frequently representing the sole eCommerce offering in Asia. By 2012, however, eCommerce organizations with global aspirations will have put the big emerging markets on their list of the most strategically important markets, lavishing funds on teams in or preparing to launch in these countries. Brands selling through traditional offline channels recognized the importance of emerging markets many years ago: In 2012, these markets will be equally important in brands’ online initiatives.
- BRIC will still be the acronym, but CBIR will be the order. Last year, I called out that China would be top of mind for many global eBusinesses in 2011. The momentum in China continued throughout the year, with a growing number of global brands launching their own eCommerce sites in the country or developing branded sites for marketplaces such as Tmall. In 2012, brands will continue to put the huge-and-growing eCommerce market in China at the top of their list of emerging markets, but Brazil will quickly emerge as the next big opportunity. Already, a number of global brands are turning their attention to Brazil, and next year will see many more launch. By contrast, India and Russia fall a step behind the two larger economies when it comes to attracting global eCommerce players, with retailers continuing to cite logistical challenges as barriers to entry in both markets.
- The mobile commerce gap will narrow substantially on global offerings. It’s common for eBusiness executives to ponder whether they should bypass traditional PC-based eCommerce altogether and go straight to mCommerce, especially in emerging markets. The answer is no: Setting up a back end supply chain in these markets is pricey and complex, so foregoing the traditional (and dominant) PC-based model to focus exclusively on mobile makes little sense. However, retailers today are still at the other extreme. Most launch traditional websites for new global markets without an accompanying mobile website or mobile app – only later are mobile options added. Next year, look for retailers and brands selling internationally to reduce the amount of time from an initial eCommerce launch to mobile commerce launch in new markets, and for an increasing number provide both in tandem.
What global trends does your eBusiness expect to see in 2012?