Updated: Sep 7, 2020
The name Cross Border eCommerce itself signifies the fact that any eCommerce transaction or activity happening beyond the international boundary of your country is known as Cross Border eCommerce. As majority of eCommerce shipments are through courier and mostly in one or two products are shipped per order, it is also called Online retail export or international eCommerce or export through eCommerce.
eCommerce is applicable across various industries and verticals. It could be goods or services. In this blog, we will focus eCommerce transaction of goods and products from country of origin to country of destination.
Although in eCommerce, Travel is the biggest marketshare, however here we will focus on eTail that is retail goods like Apparels, Clothing, Fashion accessories, footwear, jewellery, handicrafts, home furnishing, Indian handloom products, home decor, business and industrial goods etc. Also these are the categories which are fast moving in international eCommerce.
This blog will be long as I am trying to feed in as much information as possible about selling international from India through international eCommerce channels. Would appreciate your patience.
You need to consider several things before you plan to sell global. You need to understand the goods or products you want to sell and it should have demand in that country, what price points would you consider. Also while selling good online to global markets you need to understand that each country has it's own buying behaviour and purchase power. Hence a same pricing for all countries will not work. Then you have Logistics and Supply Chain. Logistics is the biggest component of Landing price of your product. You need to consider the best logistics carrier for different countries and evaluate the best rates to fulfil the orders. Then you need to consider best OPGSP (online payment gateway service providers) to remit your money to from international currencies to local currency. Apart from all these there are customs regulations for eCommerce products that you need to consider. We will cover them all with respect to selling global in the article.
Going global and that too through eCommerce channels has its own sets of opportunities and Challenges. Let's understand why you need to Go Global?
Cross Border eCommerce global market will cross over USD 5000 Billion by 2027.
According to Zion market research, the B2C eCommerce market was over USD 600 Billion in 2019 and expected to grow at a rate of 27% till 2026. Hence this is a channel that you cannot ignore.
Moreover 60% of this trade is dominated by China and India contributes less than 0.8% in Global eCommerce sales. Thus Indian merchants have a long way to go and speed up to match the Global demand of online products.
Let us understand now the step by step process that you need to consider in becoming an eCommerce Global Brand.
It is obvious that brand owners are very emotional with their products and why not. There had been several years of hard work that has gone in creating that product. Right from product design, procurement or in house manufacturing, investment, local market validation etc. Hence there is always a gut feel that a brand owner carries that their product will do well anytime.
However, while going to sell your products to an international buyer, you need to understand your buyer persona extremely well, else inspite of all your efforts you will not succeed. You need to apply a data based approach instead of gut and assumptions.
You need to understand trend and demand of similar product that you want to sell in a particular market, Identify the demand for last 2-3 years. Observe the peak seasons when the demand had been high. Then you need to check the price points and see if you have competitive advantage with. your competitors or not. Do a reverse calculation of product pricing and see if bottom line justify your pricing. Then look at quality of material, do you have an advantage here. You will also need to see at reviews to understand the need of the buyers. Once done,
Now that you have done research on Product, Place and Price you need to understand the kind of promotion your competitors are doing. Best would be to see if there are sponsored ads within an online marketplace in that country. Also find out how your competitors are promoting externally in that region. Thus apply 4Ps of marketing to understand your brand positioning in that market.
Wait, was that too much. Take it easy, there are plenty of tools and services that will help you with that research at a low cost.
(You may discuss with EximScouts market research team to help you with this basic market research and sometimes they don't charge you anything for this service)
Now, once you are done with the market research, you need to consider the Marketing or Sales Channels. Let's see what are the international online sales or marketing channels to promote your products.
Sales and Marketing Channels to consider to grow Online Sales.
International Online Marketplaces
Social Media Channels
Online Local Distributors
1. International Online Marketplaces:
This is a a low cost sales channel to create your Marketing funnel (awareness, consideration, conversion, loyalty and advocacy). As you have Amazon.in, flipkart.com, myntra.com, in India, thus most countries have multiple online marketplaces of their own.
In B2B you may consider Amazon Business or Alibaba.
Advantages of selling through International Online Marketplaces:
Number of Channels to showcase your products increase by 5X. In India you are dependant on only one or two channels namely Amazon and Flipkart, but by doing international eCommerce you may reach to 15-30 Online Channels at one go.
Use the traffic generated by these marketplaces to showcase your products. Understand the Marketplace functionalities and best practices to engage your customers.
Create ad budgets based on trends and run your campaigns to maximise your growth in that sales channel. Build your ROI calculations and optimise your ad spend returns.
Keep a tap of several festivals and retail seasons in those markets, like you have Big Billion Day Sale in Flipkart in India, you will have several promotional events in other marketplaces also. Try to promote your products aggressively during those times.
Disadvantages of selling through international online channels :
Low margins as you need to pay commission per sale to the marketplace.
Lot of dependancy on the Marketplace and you cannot take complete ownership of selling your products.
Adhere to the return policy of the marketplace.(Although the return percentage is extremely less compared to India as most orders are prepaid in nature)
Comply with regulations that the marketplace will not interfere like customs, last mile and duties and taxes, warehousing, payments through OPGSP etc.
But advantages out weigh the disadvantages. Isn't it? ( Let me know your thoughts in comments section).
OK, so if you got it, then let's see the other sales channel.
2. Selling to international buyers through your own WebStore or eCommerce Website.
Alright now you have your online marketplaces set and a channel of sale. However, buyers are well informed these days and would like to do some preliminary research sometimes. Here you need to showcase your exclusive presence over the web. And that can be done best through your own online Web-store.
Store Set Up: Setting up you own eCommerce web-store is very easy these days. You need not know a line of code to actually build your own web-store. All you need is to use a DIY platform like Shopify.com or Magento.com and start building your eCommerce web-store from scratch.
Else you may hire an expert Web designer or developer to get it developed for you. You may also discuss with EximScouts web design team.
The advantage of using such platforms is that you can use several plugins and apps to boost the performance of your web store. Moreover certain times when buyers see the site is built on Shopify or other such platforms, it adds credibility to the site as well.
3. Social Media Channels:
You cannot ignore a social media channel as a brand today. The world is changing to engagement based buying patterns and social media channels are the best way to engage with your customers. The more the engagement, the better the conversions.
Also these platforms provide you to do a lot of targeted marketing by running ads through their platforms. However, you need a strong sense of Social Media Strategy and implementation to achieve success.
4. Online Local Distributors:
There are certain geographies where you cannot sell your product through eCommerce without having an incorporation or setting up your company registration in that country. For example India is a locked country. If an international seller wants to sell their goods in Indian online marketplaces, they need to form their company in India.
Likewise regions like Middle Eastern countries need local incorporation. To solve this problem, you may look out for local online distributers in those countries. These distributors will import your products and sell them through the online marketplaces of that country. They also have local intelligence of what would sell well. They would take few samples of your products to understand the chances of sales.
However there are demerits in this model as you do not have much control on payments. The marketplace will pay the distributor and the distributor will pay you in return. There could be problems and solving them need deep mutual trust. Hence go through reliable sources. Also these distributors charge a huge cut as commissions on the sale of goods that might impact your bottom line.
Logistics and Payments are important support verticals in helping you facilitate your eCommerce export business.
As you have completed your Market Research and understood the channels through which you need to sell your products. There are two very important things you need to set and add their operational processes in your company.
International shipments are costly. And you need to consider the shipping charges in order to make your products competitive in the country you plan to sell. There are low cost carrier models too.
You need to plan well which logistics carrier you will use to fulfil your orders. Also will you mark your Landing cost inclusive of the shipping charges or show shipping cost as extra. You also need to compare rates among various logistics carriers.
Also would you be drop-shipping your goods from India or would you hold your inventory in the warehouse of the country that you want to sell. How would you liquidate your inventory in case there is not sale of any goods? What about reverse logistics? These are fundamental questions that you need to ask yourself and create solutions around them.
There are customs rules. You need to keep in mind the rules of customs in Origin as well as destination both. Also you need to have required documentation. Remember, you might ship a single product, but you would remit international currency against it. Thus you need to show it under exports. You may also discuss with EximScouts logistics team for turnkey supply chain solutions around eCommerce exports.
Similarly payments is an important factor to consider. Remember you will receive payments from Multiple international currencies. You need to transfer them to your local currency.
First you need to setup the payment gateway partner (OPGSP) like paypal.com, payoneer.com, stripe etc and evaluate the transactional and currency conversion rates. Factor that also into your unit pricing. You need to collect the statement of flow of money and also collect e-FIRC statement form your bank and show it in your books. A good accountant with idea on exports would be able to help you with reconciliation of your accounts.
By now your entire Cross Border eCommerce planning and process is set. Here on you need to focus on two things:
1. Usage of Technology to increase efficiency and reduce your overhead costs.
2. Marketing of your products across channels.
It is extremely difficult to manage so many sales channels manually. You need to regularly update your inventory against the goods sold. Also you need to process your orders from multiple channels. If the order volume is high there are chances of manual errors that might affect your online reputation.
Also you need to track all of your logistics shipments to multiple countries through multiple carriers. Also you need to reconcile your payments against the goods sold.
Thus it is advisable to use any multi channel eCommerce software that will sync all your sales channels along with logistics and payments in a single place. Lot of time people call them Omni-channel software or OMS (order management system) or WMS (warehouse management system).
Also there are other technology tools available in the market with respect to Market research, Marketing, Customer relationship management. You may evaluate them and see what works best for you.
The Growth Part | Performance marketing to enhance Online Product Marketing
Gone are the days, when you will list your products with few assumed keywords and little discount and expect sales.
eCommerce has emerged as an important sales channel and hence there are plenty of sellers selling online. Also when you plan to sell to international markets, these markets are more matured in nature. Hence you need to put in extra efforts to create visibility of your products.
There are major two approaches :
1. Organic Marketing
2. Paid Marketing
Organic marketing usually takes a lot of time to gain traction. If you understand the algorithms of the Marketplace or Google then you might do well in organic marketing. Remember, it is extremely difficult and not necessarily gives you possibility of success.
Few things to consider in organic or paid marketing are adding high quality product images, good heading with proper keywords, good content description, pricing should be competitive, check out options should be fast, delivery timelines, shipping rates, participate in marketplace promotions, feeding your social media connects with rich content to keep them engaged etc.
Paid Marketing has two elements to it:
1. Paid marketing through promotions within the marketplace, example Amazon PPC or sponsored ads.
2. Paid marketing outside the marketplace like google adwords, facebook ads, instagram ads etc.
It is important to build your marketing calendar with actionable items for each month. Measure them at the end of each month to understand if you are at pace with your objectives. Have patience though.
Customer Service and Success :
This is the part we as online sellers usually neglect. This is extremely important to create credibility of our brand. There are times when you will receive pre sales inquiries from international buyers. It is important to answer to such queries else you might lose that sales.
Also post sale it is good to reach out your seller to understand if they like your product. This will help you not get negative reviews in case the product reached damaged or something beyond your control. Also if they like your product , pursue them to leave a positive comment with pictures. This will increase your online reputation and would enhance further sales of your products.
Timelines for Online eCommerce Business to become successful : There is not hard and fast rule to see exponential growth in you online business. However, to the best of my knowledge you would need at least a year to see some real growth. The first year will be slow and your investments will be high in terms of creating visibility of our products. The actual traction begins from second year as by then your online store would have gained some reputation and there would be some credibility built to enable buyers to make the purchase decision. Be patient and keep sharp focus on your execution.
I wish to write more, but then there would be too much in one single place to read. I will break actionable items and write separate blogs on each of them in detail like how to do product marketing for your online business, how to optimise your logistics etc. Follow us in our social media channels for regular updates on cross border eCommerce and subscribe to our mailing list.
If you need any clarification you may leave your comment below and. We will reply to your queries.
Thank you for reading!
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