As a digital company, your business can reach across conventional borders. You have the ability and the opportunity to reach customers anywhere in the world. At the same time, your business is looking for new markets. Customers are also looking for goods and services outside of their local region.
According to Statista and Shopify, the expected retail ecommerce sales worldwide by 2021, is $4.8 trillion, with 85% of the world’s purchasing power outside of the United States.
To take advantage of opportunities in these borderless markets, you must create a welcoming online store that makes shoppers from another region feel they are still getting a local experience. Localization is an essential part of the overall customer experience, as it instills trust in the buyer and builds a bridge with the seller. The trustworthiness of a site was ranked the most critical factor by 30% of global consumers—making it even more important than price, as noted in our recent survey.
The European Union is doing its part to encourage cross-border commerce, by all means possible. For example, it has forbidden geoblocking for online shoppers, which means that ecommerce websites can no longer block shoppers from other EU countries. The EU rules open up new markets for potential buyers and support fair ecommerce opportunities.
Most recently, the European Union passed the second Payment Services Directive (PSD2), which already provides greater security in payment processing and data protection for consumers. These additional regulations and compliance requirements will increase confidence and trust among shoppers purchasing across borders within Europe.
In the US, the California Consumer Privacy Act (CCPA) became effective on Jan. 1. This grants new rights to California consumers, with the objectives of expanding their current privacy rights, and of requiring businesses to be more transparent about their data processing activities. Although they are similar, CCPA and GDPR are separate legal frameworks that have different scopes, definitions, and requirements. Being compliant with the EU’s General Data Protection Regulation does not exempt a company from taking the necessary measures to obtain compliance for the California Consumer Privacy Act, but it is a good starting point and indication of some typical company principles, related to data protection.
These consumer protections are a direct response to consumer’s demands for increased security, as the global ecommerce marketplace broadens.
Tips on localizing for global ecommerce
If your business wants to sell globally, you will need to allocate the necessary resources to localize your digital sales strategy, to each market you target. True localization is much more than translating your website into a few foreign languages and currency conversion.
To give buyers the familiar experience they want, you ideally must localize every aspect of the buying experience. Localization includes everything from the website, marketing materials and product language, payment methods, currency and prices, purchase flows, text, labels, and messages to date and time, phone number, graphics, formatting, punctuation, and addresses. In addition to keeping the customer satisfied, you must also comply with local regulations regarding sales taxes, refunds, privacy, and customer communication.
You want to start by focusing on what matters most, and take it one step at a time. For example, at least 70% of consumers more likely to purchase if the retailer displays its shopping cart in their native language and makes their preferred payment method available. Because of those preferences, you may place the priority on the ordering process, with the rest to follow.
Shoppers in different regions have different expectations when it comes to shopping cart display and purchase flows. Customers in some countries prefer to see complete order information, while others prefer a more efficient experience. Shopping cart formats can vary widely from country to country. For example, surveys have shown that consumers in the U.S. preferred a shorter purchasing form, while buyers in Europe preferred a longer form. However, for some B2B companies that tested their purchase flows, results are showing the opposite. Therefore, be sure to test everything locally for the best results, and develop a variety of cart templates, so you have the right template for each region.
Visa, MasterCard and PayPal have been the most used payment methods globally for many years. However, research shows an increase in local payment methods dominating specific markets.
In the Netherlands, for example, iDEAL is the leading payment method (over 50% of all transactions), while in China, AliPay and WeChat Pay together are used for more than 80% of all payments, while in France, Carte Bancaire is the most widely used payment method. In Brazil, over 75% of consumers are paying for their purchases in installments, an option only available when working with a local payment processor.
Taxes and compliance
Understanding and implementing every country’s tax laws is a huge task. The simplest option you have, as a merchant, is to work with a payment platform or other financial provider that will have these rules and regulations built into their services and regularly updated. Hiring a vendor dedicated to this issue, or working with a commerce provider that acts as your merchant of record, can go a long way toward handling taxation for your business and relieving you of this burden.
The opportunities are there, and the technology and regulatory barriers are manageable, to expand your ecommerce business. Nothing is stopping you, so go ahead and create a localized experience, to bring your products and services to markets worldwide, and watch your revenue stream grow.
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