Today’s global marketplace presents immense opportunities for online retailers – it’s like having millions of people in front of your shop window, which can be both exciting and frightening. What should you do first?
If you’ve decided to expand internationally, the first step is to decide on which countries to target in order to get the best ROI from your internationalization project. It’s essential to choose the right countries. This article aims to give you a few pointers on how to start.
How to choose your next target country
Logic would suggest starting with countries that border your main target country, as they often share similar cultural and business patterns, and sometimes the same language, which all help to facilitate the internationalization process. This can sometimes be a good idea.
But a better indicator would be your current customer base. Who are your current customers, what are their shared characteristics and interests, and why are they buying from you? It is very likely that other people with the same profile in other countries would also search for your product/service.
Let’s take an example with a hypothetical business scenario. Say you’re an Italian wedding planning service for people from overseas who want to get married in Italy. Your customers are mainly from the United Kingdom and the United States, and you would like to reach a wider audience online by localizing your website in a new language other than English.
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After conducting market research, you conclude that there is a strong demand for your service in Russia, Japan and China. But which of these three countries offers the greatest sales potential and most promising return on investment (ROI)? Should you localize your website in Russian, Japanese or Simplified Chinese?
Choose the country with the most potential
The T-Index ranking helps you determine each country’s online sales potential. It ranks 195 countries and their respective languages by combining the number of Internet users with an estimate of their annual per capita expenditure, resulting in a percentage value that expresses the e-commerce potential of each country. The higher the T-Index value, the higher the online sales potential of a given country.
According to T-Index, China is the second most attractive country for online sales worldwide. It has more than 689 million Internet users – making it the world’s largest online community – with an estimated annual expenditure of US$4,818 per capita. However, there are unique challenges involved in targeting China’s online audience.
China still completely blocks many foreign websites – the so-called Great Firewall. And you’ll have to learn about China’s most popular search engine (Baidu) and social media platforms (WeChat and Weibo) to increase your online visibility there. Last but not least, your web presence will have to be fully optimized for mobile, as more than 95% of Internet users in China use mobile devices to go online.
So, let’s take a look at Japan and Russia, which might be more easily accessible for your business. Japan ranks third in the T-Index ranking, while Russia ranks fourteenth. This means that you would be better off investing in Japan rather than Russia, because Japan combines a higher number of Internet users (115,605,881 versus 101,010,813) with greater spending potential (US$20,740 versus US$6,306).
Once you have analyzed your business and decided on the best country to target (Japan, in our example), it’s time to translate your website – but that’s not all.
This is a common mistake that online retailers make. They focus on translating their webpages but forget about emails, brochures and all the other communication materials that are part of the customer journey. It’s important that you localize the entire customer experience so that your visitors feel comfortable and secure during the evaluation phase.
Translate, but also adapt to local preferences
Lastly, keep in mind that translation is the first step towards attracting new customers, but other key aspects such as the price of your product/service, the available payment methods and the user-friendliness of your website must also be optimized to transform your future visitors into potential buyers. Your website and communications need to be designed to resonate with your new users’ cultural and functional expectations.
The top 5 barriers for cross-border shopping are:
- Shipping costs
- Concern that item may not be received
- Delivery time not fast enough
- Concern that item may not be as described
When you start a localization project, look closely at all these items. You won’t just need to translate the contents of your original website; you might also want to customize it and/or add new content in order to match the expectations of the target audience you’re aiming to convert.
The inherently global nature of the web gives you access to a whole world of new prospects and customers. We hope this quick guide will help you choose your next target countries to take your business to the next level!