Yeah, you’re reading right, 40%! There are not many strategies that allow such an increase in sales. And if it’s only 20%, it’s certainly a lot more than you can do with other strategies like marketing, website optimization, etc., if you only make use of the possibilities in your home country and in your language.

Let’s take ASOS, a British heavyweight, for example, which early on focused on the international expansion of its online platform and now generates approx. 60% of its online sales abroad.

Online providers who avoid cross-border trade and ignore the uninterrupted growth in cross-border sales leave growth rates in double figures.

Missed opportunities – what growth potential are you missing?

The market for cross-border online purchases is huge – Last year, the gross value of purchases across borders was $300 billion, or 15% of total e-commerce. With a growth rate of around 25% p.a., this market has excellent growth potential that no retailer should miss. The growth rate is almost double that of domestic e-commerce. This gives retailers and manufacturers a unique opportunity to grow faster than their local competitors. Suppliers who do not serve this market miss out on relatively easy growth potential.

In all likelihood and according to forecasts, demand for foreign products will not decline even after 2020.

Amazon is regarded as a model example here. Since the end of the 1990s, potential markets have been opened up and more than 40% of its sales are now generated outside the USA. As an example to the contrary, 90% of Alibaba’s sales (an online trading giant) were still generated in its home market of China.

Speaking of China, China is the largest e-commerce market in the world. Last year’s annual turnover was €405 billion, of which €19.4 billion was generated on foreign websites.

Of course you can ask yourself, what do I care of China, that’s too far away. But especially Chinese people looking for premium articles. And if you believe the buying behavior of the Chinese, a delivery time of 2 weeks is completely acceptable for them.

Internationalization – not only for the online giants

As an example, I have now only mentioned big global players, but just because you may have a small online shop, it does not mean that globalization would be too big for you. Nowadays, there is nothing to stop even the small online retailer from doing so. The myths that it would be too complicated to exist on foreign markets or to land at all can be countered quickly:

  1. Localization of online shops does not require a solution to be built from scratch. With solutions like WooCommerce and MultilingualPress this is possible with relatively cheap means in shortest time. Read more at the end of this article.
  2. Nowadays, there are many shipping companies that offer premium shipping and thus orders arrive relatively promptly and safely at the customer.
  3. Numerous fulfillment companies make it possible to store the products cost-effectively, if necessary, also abroad on site. Thus one has the same shipping conditions and times as domestic suppliers.
  4. The more specific the product range and the smaller the niche, the higher the probability that this product or range will not exist in other countries.

Main reasons for buying abroad

The top 3 reasons that customers decide to also buy in foreign shops:

  1. The product is not even available in the customer’s country.
  2. The prices are lower than the local competition.
  3. The selection of sizes, colors, variants, styles, etc. is more extensive than in the domestic shops.

Cross-border purchases are becoming more common. Every 7th online purchase is now made in a foreign online shop. In 2020, it is predicted that every 5th Dollar will be spent on cross-border online business.

Pioneer for cross-border sales

Great Britain, the USA and China are the three largest supply markets in cross-border online business. The share of the total revenues of these three countries is currently around 60%.

The success can also be seen in the figures. Although Great Britain has fewer inhabitants and therefore also Internet users and online buyers, Great Britain has by far the highest turnover:

Great Britain – Japan – Germany

Population: 64M – 126M – 80M

Internet Users: 60M – 115M – 71M

Online buyers: 43M – 77M – 47M

Turnover: $174 billion – $114 billion – $66.2 billion

On the one hand, British online shops have far more cross-border sales than e.g. Germany, as many foreign customers speak English. But also because British companies, due to their existing presence in Commonwealth markets, are traditionally more internationally oriented than online shops, e.g. from Germany or Japan.

Attractiveness as a manufacturer

Cross-border sales are particularly attractive for manufacturers of products. This gives them direct access to their customers instead of having to go through an intermediary. Thus the profit margin increases many times over, especially if it is a specialized product with a protected designation of origin (e.g. food) or exclusive sales rights, it leads almost automatically to success.

Next steps towards internationalization

In the next article I will tell you which measures have to be observed and how to best implement them with WooCommerce and MultilingualPress. So stay tuned and see when the right Advent door on this topic will open in the next few days.

* Vielen Dank an Rawpixel für das Foto, das wir in diesem Beitrags-Header verwenden.

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