Globalization of E-commerce: Are You Ready? By Alexis Gutzman
May 17, 2000
IDC and the Computer Industry Almanac, in separate reports, agree that last year that the U.S. represented only 43% of online users. By 2003, that percentage will have fallen to 33%. The word "World" is being re-injected into the World Wide Web with a vengeance. In a few short years, Americans will be relegated to the familiar position of loud tourists in a land that we used to think of as our own.
More Than Just Traffic; Revenue, Too! What''s even more stunning for those who have built English-only Web sites and e-commerce sites, by 2003, e-commerce sales to customers outside the U.S. will exceed those to customers inside the U.S. The U.S. portion of e-commerce revenue will fall from 61% (of $130.5 billion) to 44% (of $1.6 trillion).
From the "glass is half full perspective," that means that U.S.-based sites that fail to offer multi-lingual support, global shipping, and multi-currency options still have access to a $704 billion market for U.S. sales online. However, it means that they''re foregoing $896 billion of available revenue.
According to IDC, only 45% of sites make any effort at all to accommodate non U.S. customers, and only 11% of sites display prices and accept sales in local currencies. Can you afford to lose the sales of half or more of the Web audience out there?
Going global may seem like a daunting task. Will these international visitors come to your site? Check your Web server log files - most likely international customers have already been there. Most e-commerce sites, even those entirely in English and don''t even ship outside the U.S., will find that more than 1/3 of the traffic they see and the pages they serve are already being served to an international clientele.
What''s Involved in Going Global? There are several ways to go global. The first is probably the easiest. Find companies that will localize your site, such as US-Style.com, which handles converting your site into Japanese, managing e-mail customer service inquiries, and cultural content. Japan''s not a bad place to start, by the way, since IDC reports that Japan will have 57 million Web users by 2003, and by 2004 will have $1.6 trillion in online revenue, according to Forrester.
Note: I apologize to our non-U.S. readers that the rest of this article is particularly biased toward the U.S. merchant. I hear from the rest of you often, and I realize that being called "foreigners" isn''t particularly appealing, but I needed to take a vantage point to communicate what''s involved, so I ask your patience in advance.
In order from easiest to most difficult, here are the things you need to do to globalize your site:
Find a way to ship globally This is rather straightforward. UPS and Fedex will both handle international shipments. Of course, you need to make sure you have labeling on your boxes that will pass muster with the customs offices both in the U.S. and abroad. For an additional fee, these shipping services will take care of that for you. Be sure to add any additional fees to the checkout pages so international customers know what they''ll be billed. Forrester recommends that product prices not be altered when selling internationally, but that all shipping and handling costs be passed along. If non-U.S. customers want the products and they can''t get them at home, they''ll shop from you. They''re generally used to exorbitant shipping costs when they order internationally.
Determine and inform customers about local tariffs You need to be sure you can actually ship your product to the countries where your customers live. Computer sales, for example, are limited to licensed telecommunications dealers in some countries. Some countries have very low tariffs on personal imports, so shipments should be marked thus. Others tax luxury items, like imported wine, at prohibitive rates. Find out what you can ship where, limit your dealings with countries about which you know the rules, and show the customers what the tariffs are when they check out. Unpleasant surprises can lead to chargebacks! One site with which I''m familiar simply tells customers that by making the purchase, they agree to assume all responsibility for knowledge and payment of local tariffs; this is another possible road to take, although its legitimacy in the local courts hasn''t been tested. The Open Directory Project lists companies that can help with this. From2.com is one with which I''m familiar with some pretty nifty online tools your site can use.
Add multiple currencies to your site Most merchants aren''t aware of the fact that merchant banks will generally accept charges in any currency, as long as the merchant sends the currency information along with the purchase amount when transmitting sales information. Check your payment-processing software to see what''s involved. There are free and inexpensive sites and services that will allow you to get currency-conversion files in real time so that shoppers can see the product prices in their local currencies on your site. Check with your payment processing network and your merchant bank to see if they provide these feeds. Make minor modifications to either your product presentation pages or your shopping cart so shoppers can see what they''re going to be charged in their local currencies.
Convert your site to local languages There''s a quantum leap between the previous item and this one. Many decisions need to be made here - notably which local languages you want to support. German and Japanese should be at the top of your list. If you support appropriate payment methods for Latin American commerce, particularly Mexican, and credit cards aren''t among the best options, then definitely include Spanish on the list. Mexico alone is expected to account for $107 billion in e-commerce revenue by 2004. To find companies that will handle language localization, visit the Open Directory Project (Be sure to find a native of the language you''re considering to visit other sites translated by the company you choose to make sure the translation is of a high quality. This is a consulting fee well worth paying.
Employ multi-lingual customer service As long as your site is being displayed to your international customers in their own language, you should expect them to want to communicate with you via e-mail as well. You have two choices for doing this: contract with a customer service center with native speakers, or hire someone to translate the communications (written only) into English, answer the inquiries, then let that someone translate the answers back into the original language.
Convert your site to culturally-relevant content This is the step that will ultimately separate the wheat from the chaff -- local sites to which international customers will return again and again, and U.S.-based sites from which international customers may shop, but they''ll feel like foreigners. This is also the most difficult to implement and the most expensive to maintain. When you undertake this step, you commit to rewrite your site for the local culture. You may find that not all products are appropriate for international sale, so the first thing you should do is to review your product catalog with an eye to determining which products will sell in your target market based on shipping costs, local tariffs, and general availability. Again, there are companies that will help you with this. I recommend you find one located in the country you''re trying to break into so that you know the translators and marketing writers are native speakers.
Don''t Be Left Out! The fact that you have a Web presence already puts you ahead of much of your brick-and-mortar competition. Why aren''t they online yet? They''ve been worried about how complicated it will be, how expensive, and all the unknowns. Don''t let those same reasons keep you from going global now. The World is dying to shop from U.S. merchants who have access to more consumer goods than those of any other country. Therefore, open your doors to everyone.
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