Online sales are rising steadily. For Germany alone, the trade association HDE is forecasting an increase in turnover of 9.3 percent for the current year. Last year, e-shoppers generated sales of more than 1.1 trillion euros worldwide – one of the reasons why more and more retailers want to internationalize their business. We spoke with Malte Gosau, Managing Director at Hermes BorderGuru, a subsidiary of the Hermes Group, about the opportunities of internationalization, common mistakes regarding the market entry and the future of global e-commerce.
Dear Mr. Gosau, BorderGuru supports retailers in the global shipment of their goods and, thanks to a worldwide partner network, can not only handle cross-border logistics but also warehousing and customs clearance. What are the most frequently asked questions by your customers?
The questions vary from customer to customer and according to the target markets of the companies. If the customer is in the early stages of internationalization, there is often a lack of knowledge about cross-border shipping. Therefore, in a first step we clarify which data must be provided for the export and import declarations, e.g. customs tariff numbers, goods values and countries of manufacture.
If you already have experience in international shipping, we usually discuss special features of various import procedures in the respective destination countries as well as the implementation of returns management. In addition, we advise our customers on the product categories that are particularly in demand in the respective target markets. Here we are constantly learning new and sometimes curious things: In China, for example, e-shoppers buy air from Alpine countries.
When it comes to internationalizing their business: What are the
Malte Gosau, Managing Director at Hermes BorderGuru.
advantages for companies?
While growth opportunities might be exhausted or only be possible through displacement in the domestic market, the internationalization of the business opens up new opportunities in one swoop. Some markets are still underdeveloped, so that companies can quickly gain significant market shares. Furthermore, the competitive situation is often somewhat more relaxed than it is in the home markets, which are dominated by marketplaces, platforms and large players. The profit margins in new markets are therefore much higher. Due to the fast, international shipping procedures, investments in own storage space are not immediately necessary. Thus the initial investments are not as high as many retailers assume.
With what kind of ideas do companies approach you? Against this background, what are the most common mistakes and how can companies avoid them?
There are still companies that think that they only need to offer shipment to Europe in order for the sales figures to increase rapidly. However, this does not correspond to reality.
A market entry requires a clear strategy – not only with regard to logistics, but also regarding sales channels, online marketing, payment and customer care. The number of consumer inquires for product and shipping details alone is immense. If those cannot be handled by the company itself or its partners, it is unlikely that the company will be able to enter the market successfully in the long term. Thus a long-term strategy is required. Rapid success within a few weeks is quite rare.
More and more companies are discovering the potential lying in the internationalization of their business. This is accompanied by growing competitive pressure. How do companies assert themselves in international competition? What advice do you give companies planning to enter the market?
First of all, it is important to concentrate on certain selected markets. Companies cannot start successfully in 180 countries at the same time. Furthermore, companies do not immediately need their own local warehouse for all markets and a return does not have to be offered on all markets. If offered, it does not have to be free of charge. Internationally speaking, return rates are often not as high as they are in Germany, for example. These are questions that companies keep coming back to us with.
E-commerce is developing rapidly: instead of using self-owned online shops, many retailers generate a large part of their sales on marketplaces such as Amazon or Alibaba. In China, the trend is going towards seamless shopping or „the seamless shopping experience“ – online and offline, as well as device-independent. What do you think the global e-commerce of the future will look like? What are the trends for the coming years?
With the speed of current transformation, it is very difficult to predict the future of global e-commerce.
I wouldn’t be surprised if international freight and parcel shipments will continue to converge. I believe that e-shoppers will be supplied by both local warehouses as well as from overseas in the future. For retailers, this means that bestsellers will be stored at dedicated locations close to the end customer, while the wide range of goods will only be available at one or a few locations.
In addition, I expect the transit times for international shipments to become shorter and shorter, so that the end customer does not even notice where the goods were originally shipped from. Cross-border and local business are inseparably linked – the omnichannel in e-commerce logistics, so to speak.
Mr. Gosau, thank you very much for this interview.
Would you like to know more about this topic? Click here for the article “Cross-Border E-Commerce: Tips for Internationalization”.