Go Global or Go Home: Why You Should Expand Your Ecommerce Market
This is a guest piece from online tech retailer Newegg.
Consumers are savvier these days. The speed in which they are able to search, review, and buy products seamlessly online makes it the economical and convenient choice, instead of at their local brick-and-mortar store. eMarketer estimates that ecommerce will account for 14.6% of total worldwide retail sales, topping $4 trillion by 2020. The growth of ecommerce has also helped level the global playing field. Consumers are not only shopping online more than ever, but they are purchasing products from all around the world. According to Forrester, cross-border transactions will outpace domestic transactions at a compound rate of 17% between 2017 and 2022.
In 2016, the Asia Pacific region accounted for the majority of ecommerce sales at 12.1%, followed by Western Europe and North America at 8.3% and 8.1%, respectively. China drives most of the sales in the Asian Pacific region, their ecommerce sales alone are projected to top $1.9 trillion by 2019. A large portion of those global transactions are happening on marketplaces–online storefronts where consumers can find products from many different sellers.
How to choose your market
Now before you grab a map and start pinning every country you’ve ever traveled to as the next place to expand your business, begin your preparation by surveying the lay of the land. The opportunities are there, but what are the right market conditions for you? Consider the following as a guide.
- Compatibility to your business – Assess your current product portfolio and the markets you want to take them to. Is there a demand for those items in a particular country? A great way to test this is check if your competitors are out there.
- E-commerce market size – Demographically speaking, examine the size of the country’s working population. How much of their population purchases products online? And just how competitive are the relevant industries? Is it saturated or do you have enough space to operate?
- E-commerce growth rate – How much of the total retail sales are coming from ecommerce? Select markets where internet penetration is increasing. For example, many Asian countries were early adopters of online and mobile shopping, and now many of those countries have a robust online shopping ecosystem in place. This is why many sellers target Asian markets as their next ecommerce destination.
- Cross-border volume – Target countries that demand international goods. In particular, Western brands have seen product demand soar. Within the ecommerce sector, how much of those sales are cross-border
- Market readiness – A market can have the right shopper demographics, but a common deterrent is infrastructure. How does that country support logistics and fulfillment? What payment methodology is accepted?
Evaluating a country by these metrics will give you insights on if the country’s retail environment is conducive for cross-border sales. Once that’s figured out, the next question you ask yourself is: how can you streamline operations?
Look for Part 2 in our Global Ecommerce series with Newegg next month.
Newegg is the world’s leading tech-focused marketplace, with over 32 million registered customers across the globe in over 50 countries. They offer turnkey solutions for sellers searching for fulfillment, marketing, merchandising, and e-commerce assistance to scale. If you’re interested in taking your sales cross-border, learn how Newegg Global tailors a program that fits you.