What you need to know when expanding in Europe
Sometimes it looks like cross-border ecommerce is an easy task. Just look at the success of global market places such as Amazon and eBay or the international expansion of European players like Asos or Zalando. However, it requires a lot of research, adaptation, flexibility and understanding of the new market to be successful.
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Due to differences in cultural behaviours, it is impossible for online retailers to take their existing selling model and expect it to work abroad. This is the first and most important lesson Rick Kirk, sales director at B2C Europe, wants to teach online retailers. That’s why he wrote this piece for us, informing ecommerce players across the continent about the things you need to know when expanding in Europe.
Localize the shopping experience
Translating the language of the website content and displaying products’ prices in local currency are the first things you should do when expanding internationally. Offering the customer a localized experience reassures them that they can trust your business. For example, FreestyleXtreme, a company that sells sporting products online, saw its revenues almost double in a matter of months after translating its website into 13 languages and offering nine different currencies. And that’s also why Dutch omni-channel company Coolblue is almost ready to enter new markets in Europe. “The last hurdle is multilingualism”, CEO Pieter Zwart said this summer.
Understand payment preferences
There is a plethora of different payment methods when paying for online orders. In Italy, for example, the CartaSi credit card has 40% market share and over 7 million users, making it the most popular payment method. By contrast, in 2015, 56% of online purchases in the Netherlands were made through iDeal. Meanwhile, in Germany, where card penetration hovers at around just 20%, consumers pay for their orders via an open invoice.
Making sure that you are able to support these different payment methods is crucial to international expansion. If you do not offer consumers their preferred payment method, then they may not buy from you at all.
Target the relevant marketplaces
Where online marketplaces are concerned, UK based businesses might find it hard to believe that the world extends beyond eBay and Amazon. While these sites are well known, there are other European marketplaces growing in popularity. If you plan on expanding internationally, it is worth spending time exploring these sites to see if and how your products would fit.
- France: the top 5 most visited marketplaces are Amazon, Cdiscount, fnac, eBay and PriceMinister.
- Germany: consumers are likely to search on Amazon and eBay in the initial online search, and then move to alternative marketplaces Zalando and Otto.
- Italy: Zalando is the biggest ecommerce site for Italians. Other popular marketplaces include Amazon, Euronics, IBS and BonPrix.
- Netherlands: domestic sites Bol.com and Wehkamp.nl are more popular among Dutch consumers than Amazon and eBay.
- Spain: Amazon and eBay are the most popular sites, but Privalia, Rakuten, Zalando and Spartoo are all growing in popularity.
Cater to different delivery needs
Last year, B2C Europe’s research found big differences in consumers’ delivery preferences from country to country. In the UK, the average consumer is willing to pay for next day delivery with track-and-trace on their parcels. The French on the other hand, prefer to collect their order from a local convenience store at their leisure. These different delivery preferences were also shown by research from Metapack in 2015.
The research also revealed that delivery preferences and costs are sometimes enough to stop the consumer from completing the purchase. Dutch shoppers, for example, are particularly price conscious about delivery costs and state that if the cost is too high, they will abandon the order.
Keep returns policies simple
Returns can be a headache for online retailers and consumers alike, but international returns can be a full-blown migraine. Which method is the cheapest and quickest? What are the customs rules? Should I offer a free returns service?
What is more, Amazon regulations on international sales requires that sellers now provide their customers with a local returns address. This rule was introduced to make the returns process more convenient and cheaper for customers – you need to make sure you have a way to offer this service.
Read up on the import regulations
Customs taxes and import duties can add up when selling overseas. It’s important to consider including these costs as part of the product price to not deter customers. In addition to fees, there are regulations on products being sold across borders. For example, there are restrictions on perfume and other flammables being sold into the UK. One French company that sells health and beauty boxes to monthly subscribers found that due to perfume import regulations, it was obliged to offer different products in its UK packages. Make sure you keep a close eye on customs regulations and fees, now that Great Britain appears to be leaving the EU.
Father’s Day, Mother’s Day and other celebrations are obvious opportunities for online retailers, but many holidays take place on different dates across the world. Even for Christmas, while many see 24th as the most important date, in the Netherlands, Belgium, Luxembourg and Northern France, the 6th December, Sinterklaas (St Nicholas’ Day) is the most popular day for exchanging presents. Across all of Europe, 7 December is the busiest shopping day.
Online retailers must be aware of these variations in dates so they can ensure they are offering customers in specific countries relevant products and deals at the right time.
Need more tips? Read our 8 tips for cross-border success in Europe.