It’s no news that global business is booming. According to ResearchandMarkets.com, the share of online shoppers in Europe making purchases from web stores in other countries has increased significantly over the past decade, nearing 50% in 2019 – and the ongoing pandemic provides an additional boost. Whether retailers have a large company or an SME (small- to medium-sized enterprise), the global marketplace offers many new opportunities. We present five of the several reasons, why retailers should internationalize their business as soon as possible.
- Increasing sales: New markets, new opportunities
If a business is successful on the domestic market or the market seems already saturated, retailers will be pleased to hear that there are plenty of new markets waiting to be discovered. After all, consumer markets are increasingly expanding abroad. Especially presently underdeveloped markets and underserved product categories offer an enormous growth potential and chances for a decent market share. Another incentive is the possibility to generate economies of scale in sourcing, production, and marketing. Retailers should get to know their new target market and keep in mind the differing consumer landscape.
2. Increasing security: Making the business less vulnerable
Expanding a customer base internationally can also benefit a business’ short- and long-term security – especially in times of economic insecurity. Retailers that sell cross-border are less dependent on periodic fluctuations and downturns in the respective home market. Thus, sales in foreign markets do not only increase profit, but have historically shown that retailers can retain and improve their employment, financial structure and production capacity.
3. Not missing out on innovative developments
Getting out of the comfort zone of a domestic market and extending the customer base to an international level can be demanding. However, it can help retailers to learn from competitive markets and firms. Potentially rewarding partnerships can arise, too. Additionally, increased profit can enable retailers to invest more in innovative technology or product development. Furthermore, keeping up with the latest trends in global e-commerce, such as a merging B2B and B2C business, a more comprehensive marketplace integration and a seamless shopping experience via the merging of offline and online shopping from independent devices, can help retailers with targeting new and younger customer groups.
4. Forestalling international competitors in the domestic market
Online giants such as Amazon or Alibaba increasingly put pressure on local retailers and their brick-and-mortar and domestic online businesses. Competition is becoming tougher every day, as many customers do no longer have a clear preference when it comes to where they purchase. Retailers need to keep that in mind and should not wait too long with the internationalization in order to secure a decent market share. Cross-border business opens up new possibilities for international competitors. Retailers should not miss out on these growth opportunities.
5. Knowing that obstacles are solvable
Granted – starting to sell goods abroad can create obstacles for online retailers. Especially uncertainties concerning legal matters as well as complicated customs procedures and doubts regarding payment and returns handling scare off retailers from making the leap. Alas, having an experienced e-commerce and logistics partner to rely on can make these obstacles surmountable and solvable. Hermes International assists its clients with these tasks to create a smooth shopping experience for new, cross-border customers.