Optimizing the Local Market for International Selling

The cross-border commerce world is booming rapidly. With just a click of a button on smartphones, you can buy and sell anything across the globe. As per the Forrester study, the cross-border commerce is likely to double by 2021. This will bring a phenomenal increase in the outcome of sales and revenues. Thus, a majority of the online shoppers are going global in their search for sales and purchases. This has given a little run for money to the retailers. However, some of them have joined the bandwagon in the global marketplace.

For instance, the cross-border market of China will see a remarkable progress in 2021 with a huge increase in sales and purchases in this market. India and US are also following suit.

Let us understand the major considerations for the success in the global market.

Optimize local markets

As per research, a majority of online shoppers prefer using the globally recognized marketplaces. They focus on gaining a potential profit margin. This gives them a global recognition and a great customer outreach. It is necessary for these merchants to understand the market rates and values. Also, timely analysis of these helps them to increase their market.

Consumers should look out for multiple benefits to shop at marketplaces:

  • Best deals
  • Free shipping and delivery
  • Ease of searching what you what at one click
  • Wide range of products for all categories
  • Faster delivery time
  • Customer Loyalty Points
  • Quality products
  • Great customer experience
  • Brand loyalty

Cross-border market strategies

Marketplaces have crossed international divides. There has been a substantial increase in the purchase of online marketplaces. This ratio is high when compared to retailer websites.

These cross-border market strategies succeed based on a lot of factors:

  • Retailer’s market presence
  • How much risk a retailer has to undertake?
  • What difference lies between a marketplace’s and retailer’s own assortment?
  • Is the retailer fully aware of the cross-border policies and charges?

Be like the locals and pose like a foreigner

The US, China, and India have an astounding cross-border market. Whether it is clothes, cosmetic products, food products and electronic items, they hold their positions in the marketplace.

It is essential for these online shoppers to know the insights of the local markets. They have to be aware of the conditions of the local markets, policies and the tax benefits. They have to understand and analyze the demand and supply of their products in these areas. This is the biggest challenge though. But from the sell-side, it is the most important thing to consider while entering the global markets.

Participation in the national market

The online brands have to actively participate in the national markets. They have to continuously strive to build their presence. This gives a good exposure in terms of markets and the consumers. They have to keep the important things while expanding their business globally.

  • They have to understand the fiscal policies.
  • They have to be well prepared for regulatory challenges.
  • They should do proper calculations of the border taxes and custom duty charges.
  • They should ensure the import/export compliance.
  • They have to do accurate shipping and product costs’ calculations.
  • They have to manage logistics effectively and efficiently.
  • They have to process the data and conduct secured payments.

Focus on the brand and quality

It would be tough to survive in the global market if marketers rely completely on the brand. Product perception has to go hand in hand. As per a survey, 70% of the consumers make at least one cross-border purchase annually. This is because of the attractive pricing and discounts they get as well as the strong perception of the product aligned with local needs and quality expectations. Also because of the variety, they get in the products and its qualities.

It is quintessential to localize the brand. They need to create its online presence to enter the new global market. They have to deliver quality products and create a brand awareness to the local consumers. Thus, they have to look like an outsider but have to behave like the locals. The brand equity and the product quality matter among the consumers in countries such as India, China, and Hong Kong.

Manage the inventories and outlets

There are few of the retail brands that have managed to build empires. They have made the most of both cross-border and the domestic deals. These global brands do not enter the market directly. They have to plan and strategize cautiously. They have to manage the resources and the entire system. They have to be quick and efficient in delivering goods and services to their consumers.

Managing the inventory globally is one of the prime concerns for all the online retailers. They have to look into the challenges such as currencies, language, geographical distance, instant delivery and customer satisfaction. Regardless of the time zones and the cultural differences, they have to manage the inventories most effectively.

Conclusion

Brands have to evaluate the market position before entering into the cross-border commerce. As per the geographical and historical conditions, they might have to face huge challenges. But, they have to equally focus on the local brand perceptions to rise and stand out in this global market. Once they ensure compliance for all sorts of cross-border transactions, they surely can gain maximum success in multiple markets.

 

 

How E-Retailers Manage Inventory and Fulfillment Across All Outlets

 

Few retail brands have managed to build empires by making the most of both local and cross-border commerce deals. Global brands do not dominate by fluke. In fact, they have to weave an intricate web of strategy, manage the system and even bring about perfect execution. They are required to deliver goods to consumers exactly when they need it.

Managing inventory effectively and efficiently is one of the prime concerns of all retailers, regardless of time zones or channels. Even if common challenges like language, currency and geographical distance are put aside, it is important to manage the inventory considering cultural differences and overall brand perceptions, making it a complicated affair.

Retailers who deal with cross-border commerce need to understand the complications and recognize consumer needs holistically and geographically too.

Regional Perceptions

Just because a brand boasts of a strong presence in one part of the world, it does not necessarily translate into quick popularity elsewhere.

For example, a U.S. based retailer might be known to offer quality brand products at low prices. But distribution issues crop up along that forced the retailer to hike prices in another country. The brand promise changes in this regard, and affects the retailer’s identity too.

Successful global brands develop strategies that support their brand promise universally while considering the varied challenges offered by these markets. They may need to chalk out another brand promise or modify its original one based on the new geographical markets.

Real-Time Insights and Transparency

Real-time visibility and insights into the inventory is challenging for most cross-border operations compared to local operations. This is because of wide customer preferences, cultural differences, geographical diversity, and much more. Retail fulfillment does not work in the sense of a one-size-fits-all model, and hence real-time data is pivotal for inventory management. Leveraging Shopify, some ecommerce solution providers have successfully delivered add-ons that aid in ensuring real-time sales insights on more levels than one.

Retailers need to optimize logistics and processes with latest tools and technologies.

  • Lidl, a European retailer consolidated its routine operations across 10000 stores in 26 countries with a robust, centralized IT system to process large data sets in real-time.
  • The synthesis of this data helps the company to fine-tune their supply chain management and also anticipate consumer preferences in any region.
  • Additionally, the central system ensures timely product availability and profitability across borders too. 

Inventory Optimization to Fulfill Demands

Beyond the required visibility into inventory, every cross-border retailer needs to optimize their operations, as one style does not fit all. Brands need to optimize inventory to sell the products effectively across multiple regions at acceptable price points too. How can one manage this?

Size, color, and style pose significant challenges especially when retailers are keen to leverage inventory across multiple geographies.

Brands optimize inventory and refine product assortments based on buying behaviors witnessed in each region. Inventory that does not sell well is promoted elsewhere or to the online channel to prevent extra stocks and price reductions. The sale is likely to happen through, if the inventory is shifted to the region where it sells well. This is tricky in terms of cross-border commerce.

For example,

  • A consumer in Ohio could order a hoodie that is stocked in Vancouver in Canada.
  • The distribution center then ships the product to the customer’s house or a pickup store in the local region.
  • But the shipment is crossing borders and hence as per compliance regulations, the retailer has to include import and export documentation, along with accurate product classification before the sale can be made.

Varied brands now take recourse to automation to expedite the product clearance through customs, and also avoid noncompliance in any measure. This automated implementation reduces costs of cross-border commerce drastically. An automated customs management system enables retailers to classify products and then calculate taxes and duties involved in selling their products beyond borders. The solution could embed import and export documentation aligned with the strict compliant standards.

Streamline your Payment Processes

When setting up cross-border commerce, retailers need to understand transaction taxes for every country with a robust system in place that can ensure that consumers are conveyed about the charges involved transparently including conversion of their local currency, taxes involved and varied cross-border fees.

A brand can meet currency challenges by stating product price in multiple currencies and languages. This is a best practice that can address the labeling problems as well as address some cross-border commerce challenges.

Conclusion

Brands must also evaluate market position when opting for cross-border commerce to any country. Those who are doing well in the U.S. may also face huge challenges when expanding into countries like Australia, India, or even China. Brands need to pay heed to local brand perceptions, implement visibility of inventory, optimize sales processes and also ensure compliance for all sorts of cross-border transactions for maximum success.