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E-Retailer Global Expansion Report

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E-Retailer Global Expansion Report RESEARCH the global leader in e-commerce data IRINTERNET RETAILER 2018 Edition E-RETAILER GLOBAL EXPANSION REPORT How retailers and brands, large and small, are taking advantage of a growing array of channels to reach the world’s online shoppers. Internet Retailer, a Digital Commerce 360 brand OVERVIEW GLOBAL MARKETING CHARTS Overview: Building a marketing strategy for Global impact . 4 The international opportunity . 4. global e-commerce . 41. How companies view International e-commerce is already big, and many international e-commerce . 5 companies see it as an important source of growth. GELF Insight: Do you know your brand equity in foreign markets? . 51 . Brand recognition offers an edge . 6 INTERNATIONAL SALES Case Study: Victoria’s Secret enters Top 10 countries for China e-commerce with a bang . .52 . international online sales . 11 International e-commerce sales International share of e-commerce sales . 12 by the numbers . 10. GLOBAL OPERATIONS Top regional priorities for e-commerce growth . 13 GROWTH STRATEGIES Surmounting the key operational Top international online marketplaces . 16 hurdles to global e-commerce . 55. A strategic framework for Global growth strategies . 16. international e-commerce . 20 GELF Insight: A strategic framework CONCLUSION It’s not all about size . 21 for international e-commerce . .19 . Conclusion . 67. International traffic by merchant type . 22 Business Model: Fulfilling foreign International traffic by orders from a primary e-retail site . 21. RANKINGS merchandise category . 23 Case Study: Selling cross-border . .26 . Top 450 U .S . Based E-Retailers Consolidation of cross-border Business Model: Selling globally Selling Outside of North America . 71 service providers . 24 via online marketplaces . 27 . How retailers fare on Case Study: Online marketplaces . 34 . international marketplaces . 28 Business Model: Building country- SPONSORED INSIGHTS Marketplaces: Pros and cons . 32 eShopWorld . 8 . specific e-commerce sites . 35. Top U.S. retailers selling abroad . 35 FedEx Cross Border . 14. Case Study: Operating country-specific Localized websites: Pros and cons . 38 e-commerce sites . 39 The role of local partners . 44 About the authors . 84 Top international e-commerce hurdles . 56 About our sponsors . 85 Experience pays off . 67 The long-term outlook . 69 OVERVIEW Many consumers around the world are North America and accounts for 70% GLOBAL IMPACT shopping on retail websites outside of U.S. Top 1000 retailers’ international Share of U.S. Top 1000 retailers’ web sales their home countries, looking for goods sales. But, even without Amazon, other outside of North America OVERVIEW they can’t find at home, better prices U.S. Top 1000 e-retailers generate Amazon 48 .8% or products they trust. Retailers and $28.5 billion in annual web sales from Rest of Top 1000 8 .8% brands increasingly are seeking to outside of North America, nearly 9% of THE Source: Internet Retailer. Excludes sales in U.S. and Canada serve these global shoppers, and the their web sales. INTERNATIONAL prospects for growing sales and profits from international e-commerce have Top 1000 retailers also are increasingly OPPORTUNITY never been greater. reaching global shoppers via web marketplaces, not only those operated Already, 72 of the Top 1000 retailers in by Amazon and eBay Inc., but also such International e-commerce is North America by online sales operate shopping sites as JD.com and Alibaba’s already big, and many companies websites outside of the United States Tmall in China, as well as Mercado Libre see it as an important source and Canada, according to Internet in Latin America. of growth Retailer research. And those sites account for more than 23% of their web And the most common way that North sales. America’s top online retailers serve global consumers is simply by taking That number, however, is skewed by their orders on the retailers’ primary leading e-retailer Amazon.com Inc., websites and shipping merchandise which operates 12 non-U.S. e-commerce abroad. Nearly half of the Top 1000 sites outside of the U.S. and Canada, fulfill orders to consumers in such nine of them with online marketplaces major European markets as the United where other merchants and brands Kingdom and Germany, and more than can sell. Amazon generates nearly half a third to such countries as China, of its retail-related revenue outside of Russia and Mexico. 4 OVERVIEW • THE INTERNATIONAL OPPORTUNITY 2018 E-RETAILER GLOBAL EXPANSION REPORT ‘A critical source of growth’ 13% said the path to profitability appeared too HOW COMPANIES VIEW long, 80% of respondents called international That doesn’t mean international e-commerce is e-commerce “a critical source of our e-commerce INTERNATIONAL E-COMMERCE Percentage of respondents who agree or strongly agree with easy, as demonstrated by the results of a 2018 growth in the future.” each of the following statements: International e-commerce is... survey of 111 retailers and brands by e-commerce A critical source of our e-commerce publication Internet Retailer and the Global Notably, in a separate question, 78% called growth in the future 80 .0% E-Commerce Leaders Forum, an organization international online sales “suitable for us Too complex and not worth dedicated to helping retailers and brands sell because we have many international customers the effort and resources 3 .6% internationally via e-commerce. and followers of our brand and products.” That Too risky due to fraud, counterfeit products, political risks and other aspects largely underscores that the retailers and brands likely beyond our control 9 .1% Survey respondents pointed to such hurdles as to have the most success selling globally are Too long of a financial payback or regulations that vary by country on product safety, those many online shoppers already know or path to profitability 12 .7% marketing practices, customs and taxes. Language, are finding through search engines or social Suitable for us because we have many international customers and followers of customer service and fulfillment all present media. Global e-commerce leaders tell GELF’s our brand and products 78 .2% challenges, they say. And there is a relatively new researchers that they are broadening their use of Source: Internet Retailer/Global E-Commerce Leaders Forum survey, April-June 2018 factor: More governments are tightening customs “discovery” tools like search and social to include regulations or introducing new fees as they messaging platforms like WeChat to connect with see more parcels arriving for their citizens from international consumers. international websites. The survey sample was not scientific and Despite these hurdles, among those engaged in likely skewed toward companies investing in international e-commerce nearly 48% reported international online sales, given that 80% of 2017 growth in overseas web sales of at least 15%. survey respondents say they sell online outside of And while 4% called e-commerce beyond their their own market while only about half of Top 1000 home countries not worth the effort and nearly retailers do so. Even with that tilt toward global, 5 ©Copyright 2018 Internet Retailer® (a Digital Commerce 360 brand) & Vertical Web Media LLC. All rights reserved. Data as of July 2018. OVERVIEW • THE INTERNATIONAL OPPORTUNITY 2018 E-RETAILER GLOBAL EXPANSION REPORT however, many report relatively modest overseas What’s in this report BRAND RECOGNITION OFFERS AN EDGE online sales: 53% of respondents say international On a scale of 1 to 5 where 1 is “totally disagree” and 5 is “totally revenue represents less than 10% of their total The opportunities to reach a global consumer agree” respondents rated their opinion of the following statement: International e-commerce is suitable for us because we have many e-commerce sales. audience prompted Internet Retailer and the international customers and followers of our brand and products. Global E-Commerce Leaders Forum to join forces That suggests many companies are still at an early to produce this inaugural report on international Totally disagree 3.6% stage in marketing to global online shoppers. e-commerce. In fact, 54% of survey respondents have been Disagree 3.6% engaged in international e-commerce for less than The report draws on three sources of exclusive five years. information: Neutral 14.6% While it is still early days for international l Internet Retailer data on the international sales Agree 41.8% e-commerce, many North American retailers and of North America’s Top 1000 retailers, including brands report that selling globally via the internet for the first time estimates of online sales for Totally agree 36.7% is easier than ever. Among the factors opening the each of these retailers’ international websites. Source: Internet Retailer/Global E-Commerce Leaders Forum survey, April-June 2018. door to international web sales are the growth of Percentages exceed 100% because of rounding. online marketplaces that provide an avenue to l The survey of 111 retailers and brands about reach millions of shoppers, improved services from their experiences in international e-commerce, vendors for handling everything from customs of whom just over two-thirds were from North clearance to fulfillment and the growing comfort America. among shoppers the world over in shopping online. l Interviews with more than a dozen retailers, brands and e-commerce experts, most of them from U.S. companies. 6 ©Copyright 2018 Internet Retailer® (a Digital Commerce 360 brand) & Vertical Web Media LLC.
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