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How marketplaces provide technology ecosystems for international sales strategies
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Global Banking & Finance Review®
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By Tony Preedy, managing director atFruugo
For retailers wishing to bolster their sales intake and grow their business, marketing products overseas is a highly effective way of doing so. Expanding their reach beyond their borders can be a powerful protection against decreased demand at home.
Plus, a new study from Juniper Research forecasts that 33 percent of ecommerce spend will be cross-border by 2028. As ecommerce growth shifts to developing markets, the cross-border ecommerce market is predicted to grow by 107 percent over the next five years, from $1.6 trillion in 2023 to over $3.3 trillion in 2028.
As more and more consumers shift to online shopping, it is increasingly important for retailers to implement a well-thought-out, international ecommerce strategy to meet the needs of the modern-day customer and tap into both local and growing global demand.
There are a number of hurdles that retailers must clear to sell their products internationally, and these are often expensive and complex to manage. However, cross-border marketplaces offer a number of tools that substantially reduce these difficulties.
For retailers who wish to sell overseas from their own website, they firstly need to adjust the languages and currencies of each product page to fit each market to which a retailer wishes to sell. This includes deciding whether to continually update prices when exchange rates shift.
When it comes to the language adjustments, these must be uniform across the retailer’s website, from the product categories, onsite search engines, the site-wide banners and each individual product page. Once this task is complete, it needs to be repeated whenever that seller wishes to list a new product on their site – meaning continuous updates. This also applies to advertising campaigns, which must be localised for each region and must direct the customer to the respective regional website.
Even once the website’s content is ready in each region, the checkout process needs to be robust enough to manage intercontinental traffic; a crucial undertaking that is no mean feat.
Provided, there are numerous tools and third parties which are able to support sellers with these individual processes. However, given the number of tasks that must be completed, this will result in significant time and cost investment. For an exercise that has no guarantee of being successful, it is a risky one that could prove ruinous for smaller retailers.
This is where utilising the tools that marketplaces have to offer becomes beneficial. When listing their products on these platforms, sellers are able to take advantage of a plethora of tools all in one place, which simplify the individual components of cross-border selling.
As well as supporting with all of the above adjustments and updates required for selling in different markets overseas, cross-border marketplaces can also support their sellers with the respective taxes for each country or area – from VAT to shipping – which is often a time-consuming task.
Some specialise in orchestrating regional advertising on behalf of their retailers’ products, using their algorithms to constantly scan the universe of shoppers for opportunities to match global demand to supply.
Having access to all this support in one integrated platform means that all a retailer needs to do is arrange for the package to be delivered to the customer. By simplifying these tasks, sellers can more easily jump through the necessary hoops of cross-border selling and reduce both complexity and cost. In turn, retailers benefit from the perks of a sophisticated cross-border selling strategy and what would otherwise be a series of expensive digital transformation projects.
In addition, many of these platforms operate on a policy where retailers only collect fees when their products are sold, meaning they can retail in these new markets, and in front of many more prospective customers, with much less risk involved.
This in turn allows sellers to put a greater focus on other aspects of the business, such as making the most of their inventory without compromising on costs. For example, instead of applying reductions to clear their inventory in their domestic market, sellers can pivot to other markets where there is still demand and sell at full price.
As with joining any new service or platform, there will be some tasks that need completing to get up and running on marketplaces, but this investment of time is a one-off and one that will lead to greater rewards than going it alone. Once complete, they can sell their products across international markets and boost their growth while the platform does the hard work.
With the right tools in place, sellers can capitalise on overseas demand, which can lead to much greater profitability than focusing solely on customers at home. Furthermore, if a retailer were to diversify their sales channels by listing products across multiple platforms, this will lead to an even greater reach, with even more eyeballs on product, and therefore increased sales and revenue.
Cross-border ecommerce refers to the buying and selling of goods and services across international borders through online platforms.
An international sales strategy is a plan that outlines how a business will sell its products or services in foreign markets.
VAT, or Value Added Tax, is a consumption tax placed on a product whenever value is added at each stage of production or distribution.
Localization in ecommerce involves adapting a product or service to meet the language, cultural, and other specific needs of a target market.
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