Our guide to first-time cross-border eCommerce

Market research for cross-border eCommerce

So, where to start?

A huge factor of success will depend on whether there is a viable international market and demand for your products. It’s sensible to start by validating this before you spend precious time planning out the finer details.

Researching the target market allows you to:

• Assess the size of the market and its growth potential.
• Set realistic expectations and determine the scalability of your campaign.
• Understand the preferences, behaviours, and expectations of the target audience.
• Analyse the competitive landscape of the target market, and identify existing competitors, their strengths and weaknesses, and potential market gaps.
• Develop a pricing strategy that is both competitive, aligned with the target market's expectations and cost-effective for the business.

How to conduct market research

The first step involves understanding the demographic composition of the target market.

By delving into age groups, income levels, cultural nuances, and preferences, you can tailor your product offerings to align seamlessly with the needs and desires of the local audience.

Leverage international analytics tools and platforms to gather insights into the demographics of your intended audience. Platforms like Google Analytics and international market research tools can provide data on user behaviour and geographic distribution.

Online tools can also be used for competitor analysis. Tools like SEMrush, Ahrefs, or SimilarWeb can provide insights into who your competitors are, their traffic sources, keywords, backlink strategies, and overall website performance.

Scrutinise these competitors’ websites for design, user experience, product, and pricing strategies. Pay attention to key elements such as product descriptions, customer reviews, and checkout processes. Identify any unique selling propositions (USPs) or promotional tactics that set them apart.

Insights gained from this research provide a strategic foundation for developing a competitive cross-border eCommerce campaign that addresses market gaps, leverages competitor weaknesses, and positions you for success in new markets.

Laws and regulations

Embarking on a cross-border eCommerce strategy is an exciting venture, albeit one that requires thorough legal planning.

Your ability to move forward with confidence hinges on your assurance in understanding the laws and regulations of the country or countries in which you intend to sell, along with those of your home country.

You should consider:

• Online payments
• Tax
• Customs
• Data privacy and protection
• Consumer rights
• Product regulations
  

Before I jump ahead and explore the above in more detail, it’s worth mentioning the UNCTAD Global Cyberlaw Tracker.

It tracks the eCommerce legislation (online payments, consumer protection, data protection, privacy and cybercrime) of 194 member states.

It’s a great resource as a first port of call.

Online payments and taxes

Researching the laws and regulations surrounding online payments is a proactive step that not only ensures legal compliance but also establishes a foundation for a secure, transparent, and customer-friendly payment environment.

Different countries have diverse legal frameworks governing online payments, covering consumer protection, payment security standards, currency regulations and, importantly, cross-border transaction fees.

Using a global payment gateway can be a strategic move for online retailers aiming to expand into international markets. It not only simplifies the technical aspects of cross-border transactions but also provides a layer of support for legal compliance and security.

Some global payment gateways provide tools and features to help merchants manage taxes more efficiently. This can include automated tax calculations and reporting, assisting businesses in adhering to tax regulations in various jurisdictions.

Customs

Different countries have distinct laws governing the import and export of goods. Ensuring compliance with these regulations is crucial to avoid legal complications, fines, or the confiscation of goods.

Proper documentation is needed for the smooth passage of goods through customs. Understanding the required paperwork, such as invoices, certificates of origin, and customs declarations, helps in preparing accurate documentation, reducing the risk of delays or rejections at the border.

Data protection and privacy

Ignorance of data protection laws can lead to unintentional violations. Being aware of the legal requirements helps in proactively addressing potential risks and implementing necessary measures to protect customer data.

While some regions, such as the European Union, have implemented comprehensive and harmonised data protection regulations across member states, other regions may have less uniformity, and individual countries may establish their unique legal frameworks.

• Europe (European Union) - General Data Protection Regulation (GDPR) applies uniformly across all EU member states. The United Kingdom continues to adhere to this.
• Canada - Personal Information Protection and Electronic Documents (PIPEDA)
• The United States does not currently have a comprehensive federal data protection law. Instead, data protection in the U.S. is regulated through a combination of federal and state laws.
• The Asia-Pacific region also exhibits diversity in data protection laws. For example, Australia has the Privacy Act, while Japan has the Act on the Protection of Personal Information (APPI). China has introduced data protection laws, such as the Personal Information Protection Law (PIPL).
• Latin American countries may have varying data protection regulations. For instance, Brazil has enacted the General Data Protection Law (LGPD), while other countries in the region may have their data protection legislation.
• In Africa, the approach to data protection is evolving, with some countries enacting or debating data protection laws. South Africa, for instance, has the Protection of Personal Information Act (POPIA).

Explore the official websites of the target country's data protection authorities or regulatory bodies. These websites often provide comprehensive information, guidelines, and resources on local data protection laws.

Product regulations

Finally, I turn to the products themselves. Different countries have specific product regulations to ensure the safety and well-being of consumers and to maintain a set standard of product quality across the market. 

Before moving forward in developing any cross-border eCommerce campaign, consideration must given to product safety standards, age restrictions, licensing and certification measures, consumer protection laws and any market entry approval processes that apply to the business’ products and services.

You don’t want to be stopped in your tracks at a later date.

Cross-border eCommerce logistics

So, you know there’s a market, and you are confident that you will be able to satisfy the legal and regulatory requirements associated with selling your products abroad.

The next step is to nail down the logistics of cross-border order fulfilment; ‘the process of fulfilling and delivering customer orders that involve the movement of goods across international borders.’

What are the steps you are taking to receive, process, pack, and ship products to customers located in your target country?

Cross-border fulfilment strategies

Businesses often employ various strategies to ensure efficient and reliable delivery of products to customers across borders.

Third-party (3PL) logistics

Utilising third-party logistics providers that specialise in cross-border shipping can streamline the fulfilment process.

These services often have established networks, shipping carriers, packaging suppliers and expertise in navigating international logistics making it an ideal strategy for first-time cross-border eCommerce.

The primary benefit is cost savings. This includes the avoidance of expenses associated with maintaining a warehouse or employing staff to monitor supply chain operations.

Some examples of third-party logistics companies include:

• Global-e, integrated directly with our eCommerce platform to help clients establish their cross-border strategies.
• DHL Supply Chain
• FedEx Supply Chain

Dropshipping

Dropshipping involves partnering with suppliers or manufacturers in the target country to 

fulfil orders directly to customers.

This strategy eliminates the need for holding inventory and can reduce upfront costs for retailers, making it another viable option for first-time international sellers.

Local distribution partners

Partnering with local distributors, retailers, or fulfilment providers in the target country can enhance the efficiency of order fulfilment by tapping into local knowledge of customs procedures and utilising their pre-existing logistics infrastructure.

International warehousing

Establishing warehouses or fulfilment centres in the target country or region allows for faster, cost-effective and scalable order processing if the retailer has the resources to cover the initial investment and operating costs, which are likely to be expensive.

Shipping from home

Fulfiling your international orders from your home country is indeed a strategy to consider but it comes with benefits and drawbacks.

Operating from your home country simplifies logistical processes, leveraging existing infrastructure and familiarity with local regulations. It also provides greater control over inventory, quality control, and overall operations.

However, it can result in longer delivery times, potentially leading to customer dissatisfaction. While shipping costs may be lower domestically, they can become a significant expense for international shipments, impacting your overall competitiveness in the market.

Multi-channel, hybrid approach

Implementing a hybrid fulfilment model combines elements of various strategies depending on their suitability to different regions, countries, or products.

For instance, a retailer may utilise international warehouses for popular products while employing dropshipping for less popular items.

This hybrid approach optimises cost and efficiency but requires thorough inventory and order management technology to keep a detailed track of stock location and movement.

This leads us nicely to the next section of the article.

Website and platform

Let's dive into the selling process, where two key components come into play.

The first component is your eCommerce website, and it's essential to ensure that it delivers an optimised experience for international users.

The second is the platform underpinning it, which determines the features you can offer and influences the efficiency with which you can manage your international orders and inventory.

Optimising your website for international sales

By implementing these measures, an eCommerce website can overcome language barriers, adapt to diverse regional requirements, and simplify the overall shopping experience for international customers. 

Localised checkout experience

To establish a strong conversion rate your checkout experience must be easy to use for international customers.

Multi-currency support

Multi-currency support allows users to view product prices and make transactions in their local currency. It simplifies the purchasing process for international customers who are more comfortable and familiar with their native currency.

A currency converter tool can be used to display product prices in the local currency of the user, while global payment gateways will support common credit cards, digital wallets, and regional payment methods to enhance accessibility.

International shipping options

Clearly present various shipping options with estimated delivery times and costs based on your chosen fulfilment strategies. If you are shipping from your home country, offer choices from reliable carriers specialising in international shipping.

Address format compatibility

To that end, adjust the checkout process to accommodate different address formats based on international standards. Include fields for region-specific information.

Multi-lingual website support

A survey by Common Sense Advisory found that 72.4% of consumers said they would be more likely to buy a product if they had information in their language.

There are various ways to achieve a multi-lingual website, and the approach you choose depends on the complexity of your site, your budget, and your technical capabilities. 

Many modern CMS platforms offer built-in multi-lingual support. You can create different versions of your content for each language and manage them within the same CMS.

You could use a translation plugin. These tools facilitate the translation of content and offer features like language switching.

You could also create separate subdomains or subdirectories for each language version of your site. For example, en.yourwebsite.com for English and fr.yourwebsite.com for French. Similarly, you could use /en/ and /fr/ as subdirectories.

Universal product information

Ensuring universal product information involves presenting details in a way that caters to an international audience. This includes providing measurements, sizes, and specifications in both metric and imperial units to accommodate different regional preferences.

The role of your platform in cross-border eCommerce

It is crucial that your eCommerce platform enables you to concurrently operate your existing domestic operation alongside your newly launched overseas venture. 

Running the two on separate pieces of technology is unfeasible; at best, this would result in siloed data that is more challenging to manage, and at worst, your business could collapse amid an inventory and order data management disaster.

One single view of inventory, orders and customers

You must have confidence that your chosen platform can provide a single point of control for all aspects of your eCommerce business.

As you begin to hold stock across multiple locations, perhaps in multiple countries, you need a system that can easily tell you what is where, and the flexibility to transfer that stock across locations when required. Lack of real-time inventory tracking will lead to overselling, customer dissatisfaction, order cancellations, and potential reputation damage.

Whether you've sold a product to a customer in Manchester, Berlin or Timbuktu, the data needs to be stored in a central system, providing you with a comprehensive view of your orders and customers across all sales channels.

Read more about our eCommerce platform and the starring role it can play in your cross-border strategy.

Regional availability

It's possible that your supplier has specified restrictions on selling their products, limiting you to certain regions. In such cases, an inventory management system that enables you to designate product availability by country would prove highly advantageous.

This functionality ensures that you can feature a product on your website but restrict its sale to users within your region. By doing so you can guarantee adherence to your supplier's restrictions and terms, and make certain that you do not have to disappoint customers by cancelling orders you cannot rightfully fulfil.

Reaching your new customers through marketing

Embarking on a cross-border eCommerce strategy demands a thoughtful approach to reach and resonate with a new target market in another country. To establish a successful presence, you can employ a combination of techniques.

Firstly, localised marketing plays a pivotal role. Understanding the cultural nuances, preferences, and behaviours of the target audience is imperative for crafting marketing messages that resonate. Leveraging localised content, advertisements, and promotions helps in building a connection and trust with the new market.

A robust paid advertising strategy will provide you with immediate visibility in your target location. Utilising PPC and paid social media campaigns allows you to target specific locations, demographics, interests, and behaviours with a clear view of the campaign’s return on investment.

International SEO is another indispensable technique. Optimising the website for search engines in the target country involves not only translating content but also adapting keywords, meta tags, and other elements to align with local search behaviours. This enhances visibility and ensures your brand is discoverable in local search results.

Utilising popular marketplaces in the target country is a strategic move. Uploading your products to established platforms provides accelerated access to an existing international customer base.

A successful marketing strategy can integrate various strategies, it’s all about testing and learning. This multifaceted approach ensures a comprehensive and culturally sensitive engagement with the new target market, laying a solid foundation for sustained growth and customer loyalty.

Support for international customers

Finally, it pays to consider how you intend to look after your international customers.

Understanding the cultural expectations, communication preferences and peak activity times of the target market is pivotal.

Starting with pre-purchase, offering multilingual customer support, accessible through various channels, including email, live chat, or localised customer service hotlines, will foster trust and address potential concerns effectively. That said, it is also important that you can offer this support during the target country’s working hours.

The next consideration is post-purchase, particularly around returns. From experience, returning an item bought from a foreign eCommerce site can be confusing and a real chore. So, how can you make this as painless as possible for your customers?

To ensure a hassle-free returns experience, you should communicate and educate customers about potential duties and taxes associated with cross-border returns. Develop a returns policy that is detailed for each country of operation, providing clear information about customer requirements and your responsibilities.