How to make e-commerce Global Expansion successful

We usually associate “Global Expansion” with strategic decisions, complicated planning, and significant investment. It can be a daunting task and a dangerous minefield.

It is only natural to react to such an intricate scale-up with the perfect plan that makes everyone feel in control and reassures the board of directors. Maybe someone in the management team may feel uneasy with how self-assured the whole team is, but they wisely keep it for themselves.

  • The most common topics I hear when online retailers talk about Global Expansion are:
  • Localisation of the website, on dimensions such as language, currency, and pricing
  • Product Market Fit
  • Payment Methods and Payment Service Providers
  • Delivery
  • Warehouse and logistics
  • ERP systems
  • Budget for customers acquisition
  • Customer Service
  • Questioning the ability of the current e-commerce and marketing agencies to support the scale-up
  • Merchandising
  • Accounting
  • Reporting
    etc…

Those are all valid concerns tackled during the project scoping and planning.

The problem with this approach is that it misses the point. There is a lot to learn for any B2C business going global, which cannot be accomplished through a big-bang project approach.

Below are a few aspects to consider when expanding your business globally, which many companies tend to underestimate. At the end there is a link to a video about a talk about “How Graze is Experimenting Their Way to Growth”.

Product-Market Fit

Before even thinking of having a local presence in a new market, hiring people, sort out fulfillment, and more, make sure you have done all you can to generate traction in that new market from your current base, for the following reasons:
being able to create traction is in itself a validation of Product-Market Fit
this is usually the fastest and cheapest way to learn
you will have a much better understanding of what works and what doesn’t. That knowledge is the basis for a successful expansion
you will have learned the unit economics of your business in the new market, which will inform how best to invest the capital

Learn fast while using existing knowledge

Obviously, there is already existing knowledge about the market you are expanding to, and there is no point in reinventing the wheel. However, you still need to learn how that specific market works out for your brand and products. The key is to maintain and to continue developing in-house capability while benefitting from working with the best-in-class 3rd parties (e.g., Digital Agency). For instance, high-quality agencies can provide access to talents and help you avoid mistakes previously made by other companies.
It is paramount to develop a culture and build the processes that allow your business to collaborate with 3rd parties. It is also essential to be transparent about how the relationship will evolve with time. You may want to build the capability of a new market in-house slowly, and let the 3rd party manage new markets and new activities.

Work-out your Go-To-Market

Don’t assume that what works now in your current market(s) will work in a new market. Your messaging and positioning may need changing; the new landscape may be highly competitive; hence, driving the cost of customer acquisition and unit economics up. In this situation, you may need to explore new and more efficient channels to acquire your customers.

Decentralise your organisation

If your business can experience significant growth in a new market, you may want to consider investing into it by hiring local talents, opening a new office, and more.

Knowing that there is a product-market fit will not wholly protect your investment and guarantee the best ROI. The business would need to be prepared to shift from a centralised organisation to a more decentralised one. The new hiring will need to have the support and levers to be as successful as they can be.

The business should be in the position to send over some of their best people from HQ, for an extended period.

Summary

It is not possible to strategize your way to global expansion anymore; nowadays ambitious businesses need to experiment their way to global expansion.

In this talk you will learn how graze managed to experiment their way to a staggering growth – View Talk

Guest Author

Osvaldo Spadano

Founder & CEO – Elastera


Do not miss the Retail Recharged event, taking place in London on October 11th 2017. In just a few years, Retail Recharged has established itself as the not-to-be-missed half-day, highly curated and invite-only Retail event, which attracts a fantastic crowd.

Retail Recharged puts retailers and learning at the centre of the event. Every year there are talks, panel discussions and debates on specific topics. Some of the best start-ups showcase their products.

This year’s key topics are:

  • Personalisation
  • Global Expansion
  • Brand Engagement

Unlike many other events, Retail Recharged is all about helping retailers surf the continuous waves of innovation.

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