Stepping into the international markets is an exciting idea for many ambitious eCommerce businesses. The eCommerce industry continues to witness substantial growth globally, becoming an integral part of retail. In 2024, it’s anticipated that the share of global retail sales conducted online will rise to 19.5%, illustrating a continued shift from traditional brick-and-mortar shopping to digital platforms. This trend is driven by an estimated 2.64 billion consumers who are expected to make at least one online purchase during 2023.
Our comprehensive guide is written to guide you through this complex journey, discussing the fundamental legal, cultural, and logistical considerations necessary for a successful international expansion. With a focus on market research, adept adaptation to diverse consumer behaviors, and the establishment of a robust digital infrastructure, this guide endeavors to equip you with the acumen necessary to transcend domestic boundaries and flourish in foreign digital marketplaces. Your expedition towards achieving a global eCommerce footprint begins here, with each chapter of this guide serving as a stepping stone towards realizing an unbounded digital commerce empire.
Let’s start by answering the following question ….
- Why is it worth to expand to foreign markets?
- What should you do before expanding to foreign markets
- The challenges for eCommerce platforms during international expansion
- Wrapping up
Why is it worth to expand to foreign markets?
Expanding your eCommerce business to foreign markets is a valuable effort that opens many opportunities. Firstly, it diversifies the revenue streams and reduces dependency on a single market, which is crucial for risk mitigation, especially during economic downturns or local market saturation. Secondly, engaging in international trade allows for a larger customer base, significantly boosting sales and profitability. A diverse range of international customers can enhance the variety of products available, as different consumers bring different needs and tastes. Moreover, international exposure enhances brand recognition and credibility across a global platform. Working across various countries gives a brand a valuable global presence, which helps to build business relationships and attract loyal customers from around the world.
The global eCommerce landscape is growing year by year, and with the advent of technology, managing international operations has become more approachable to many online businesses. This phenomenon has enabled even small-scale vendors to access a worldwide customer base, significantly broadening their market potential.
What should you do before expanding to foreign markets
Here are some crucial aspects not directly connected to the eCommerce platform yet still essential for successful expansion. First of all, as in the case of processes like eCommerce project planning or choosing a marketing strategy, it is equally important to conduct market research before international expansion.
To do it properly and reach the target market, start with doing some research that aims to understand the demand for your products or services. A deep dive into the market size, including the number of prospective customers and the overall market value, lays the foundation for understanding the scope of the opportunity. Alongside, it’s vital to keep up with market trends, which could range from specific product preferences to technological advancements like mobile commerce adoption. Moreover, learn about buying behaviors in chosen countries or areas and subtle cultural differences. Exploring the shopping habits of people in such countries is the base for creating strategies that connect well with local audiences. This involves, for example, understanding cultural differences, approach to local and international brands, and predominant payment methods.
Thirdly, analyze the competition to create a unique selling proposition (USP) that makes your product stand out. Monitor the biggest sellers in your niche and take a look at the pricing and promotional strategies employed by them, as well as customer’s reviews about their products. This will give you a broader picture of the competition and help to unveil the gaps in the market that your online business can fill.
Lastly, along with conducting market research, also devote some time to learn about the regulatory framework encompassing laws, regulations, and compliance standards. Each country operates within a distinct regulatory framework that eCommerce businesses must adhere to. By doing so, one can mitigate risks related to non-compliance, which can result in severe penalties.
By following the steps mentioned above, you can make important decisions based on knowledge and expertise rather than on gut feeling or luck.
The challenges for eCommerce platforms during international expansion
This section is devoted to the aspects related to the eCommerce platform and its integrations. From logistics to payment gateways, each aspect should be thoroughly analyzed and tailored to meet the demands of the chosen markets. When an eCommerce business decides to sell internationally, it can face many challenges that require careful planning and well-thought-out actions. As mentioned earlier, the world of global eCommerce has different rules, languages, and consumer preferences, each bringing its own set of problems. This section will explore these challenges to give a complete understanding, which will help in making international eCommerce business activities.
Let’s start with discussing the technology infrastructure.
1. Do you have the right technology?
Choosing the suitable technology is extremely important for eCommerce businesses venturing into international markets, as it lays the foundation for overall operational efficiency. Selling products in multiple countries is more demanding regarding resources and flexibility. Due to that, a notable approach is the headless architecture, where the frontend and backend systems operate independently, enabling seamless updates and changes without disrupting the work of other systems and the website itself. This modularity ensures a higher degree of flexibility, allowing for swift adaptation to varying market demands, regulatory frameworks, and consumer preferences across different regions.
Taking this into consideration, we will use Sylius Plus as an example of a suitable platform for eCommerce international expansion.
Sylius is an open-source and headless eCommerce framework based on the PHP Symfony programming language. Due to its versatility and limitless scalability, it is a perfect choice for medium/large companies and enterprises for global expansion. Unlike many other platforms, it can be extended easily by applying custom solutions and, therefore, can be tailored exactly to one’s business needs and customer expectations. The right technology allows for easy integrations with various payment gateways, tax calculation systems, and other regional-specific functionalities, which are crucial for maintaining compliance, enhancing customer satisfaction, and managing international eCommerce business.
Although both are focused on delivering numerous customization options and great performance – Sylius Plus was developed to meet the needs of even the most demanding companies that go through rapid growth or operate globally and sell on various international markets. Thus, it will be used as a solution for the aspects mentioned above.
To provide an example, one of the companies that successfully used Sylius is Albeco. With over 30 years of experience, Albeco sells bearings, guides, and other highest-quality items for maintaining equipment. In this case, Sylius helped to get rid of technical debt due to an outdated website and create a completely new online store adapted to all devices, with an advanced search engine that allows you to find exactly what you looking for among 65,000 other products. Besides that, functionalities such as single-page checkout, returns form, and multi-basket were implemented to improve the user experience to the fullest.
2. Operating multiple stores and many sources of inventory
When expanding to foreign markets, creating additional business entities is often necessary. This idea is grounded in the need to cater to diverse market demands and optimize operations across different regions. Operating locally helps to establish a strong presence within the market and respond more effectively to local competition and cultural nuances. What’s more, having many sources of inventory is often an integral part of the expansion strategy. By establishing a well-coordinated supply chain and inventory management system, businesses can ensure a seamless flow of goods, meeting the demands of different markets efficiently and leveraging regional strengths, whether in terms of supplier relationships, cost advantages, or consumer preferences. It’s worth keeping in mind that customers can also return your product, and this process should be easy both for them and your business.
With thorough planning and effective management, businesses can successfully operate in various markets, which in turn, leads to growth and long-term success.
Let’s look at the solutions in Sylius Plus that cover this topic:
The multi-store module in Sylius Plus is designed to cater to businesses operating on an international scale through multiple legal entities or business units. By creating many business units within a platform and assigning chosen channels to each of them, the whole organization can be managed from a single platform. This module also works perfectly in the markets that require conducting business activity in a particular country.
Sylius Plus provides the functionality to establish numerous inventory sources, such as a warehouse in Warsaw, Berlin, and Prague. You can then allocate and monitor the inventory for each of these locations per product variant. Stores can be assigned to chosen warehouses, and shipments can be prioritized based on the store’s or customer’s location. This feature significantly simplifies and enhances the efficiency of selling through multiple channels, as products can be dispatched from the most suitable source to the customers and ensures a faster delivery time, improving overall customer satisfaction and operational efficiency.
Returns management (RMA)
Sylius Plus includes a Returns Management (RMA) tool that simplifies handling items customers want to return for a refund, repair, or exchange. Customers can initiate return requests quickly through the “My Account” area. These requests can then be processed by administrators or designated employees via the Administration Panel. The RMA tool also offers a chat communication feature with customers, fundamental return rate reports, and the automatic creation of shipping labels, among other functionalities.
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3. What about shipping and taxes?
As we mentioned managing warehouses, let’s also talk about shipping your products and calculating taxes. Let’s start with shipping first. As eCommerce stores grow and start selling to people in different countries, they face the challenge of delivering items quickly and correctly to customers who are spread out. Selling the products in many countries means that the shipping strategy needs to be carefully planned since different countries have their own set of rules and expectations. They have to deal with different customs rules, taxes, and shipping laws, which can change a lot from one country to another. Generally, the most optimal strategy is to make it as local and fast as possible. Due to that, a multi-warehouse shipping strategy may be the most viable solution. At the beginning of the expansion, it is worth considering cooperating with 3PL (third-party logistics), which can handle warehousing, distribution, shipping, and even returns. At this time, you can focus on core business activities like user interface on the website and marketing.
Now, let’s shed some light on handling taxes when going internationally. Understanding tax zones is very important for eCommerce businesses to follow the different tax rules that change from one country to another. Knowing about tax zones helps businesses collect the right sales tax amount and avoid legal troubles. It also helps them set the right prices, which include the correct tax rates. This way, customers know the total cost of what they are buying, which builds mutual trust. For eCommerce businesses selling from many countries, knowing about tax zones is crucial. Although it may seem overwhelming, there is software that calculates taxes automatically and manages them both for the customer and the eCommerce business, so do not worry.
Shipping and taxes in Sylius: Due to headless architecture, Sylius can be easily integrated with other fulfillment and shipping services. To give an example, an online store can be integrated with the ShippingExport Plugin. It allows for easy coordination of various shipping providers and automating shipment management to save time and reduce errors.
Another example is the DHL24ShippingExport Plugin, which automates the generation of DHL24 shipping labels and enables managing all DHL24 shipments from the Sylius admin panel.
Both plugins can be downloaded for free from the Sylius Store.
Nonetheless, businesses in countries where Sylius is less popular may need to create their own integrations with local shipping services.
Depending on the business, some orders might require splitting the customer’s order, as sending it all at once is impossible. Sylius Plus offers a solution for businesses to streamline their order management process. It allows for the splitting of a product’s order through both an API and a user interface with just a few clicks. This feature enables the separate shipment and monitoring of each unit, making it easy to identify which items have been dispatched and which are yet to be sent. Additionally, it supports integration with Enterprise Resource Planning (ERP) systems, which can also divide orders through an API.
Sylius offers an out-of-the-box taxation system that enables users to apply taxes for various items and billing zones, as well as to utilize custom calculators. However, Sylius developers encourage integration with cloud-based modern software dedicated solely to calculating taxes like TaxJar, primarily aimed at eCommerce businesses, simplifying the sales tax process by automating many aspects of it, or Avalara, which provides a broader range of tax compliance solutions. It offers real-time tax calculation, automatic return filing, and a platform for managing various transaction taxes, including sales and use tax, VAT, excise, and communications tax.
4. Managing customer base and staff members
When a company expands internationally, having control over the customers and members of your team can be stressful. To ensure safety and efficiency, eCommerce businesses need to provide perfect communication between staff members and manage access to certain parts of online stores. What’s more, every customer is important, but they differ in terms of expectations, relationships with our business, etc. Due to that, dividing them into groups improves the workflow within a company and helps to avoid mistakes.
Sylius Plus features for customer and staff management:
Creating customer pools
Another advantage of the Multi-store module is that it enables the management of the customer base and assigns them to specific customer pools and channels. This approach allows for segregating customer accounts by domain, business unit, or country. Similarly, customer accounts can be linked with various channels, enabling them to utilize the same account across different domains of multiple brands. The choice is yours.
Role-based access control (RBAC)
RBAC is a module in Sylius that is used to give and restrict access to specific channels to particular administrators, thereby ensuring that only authorized personnel can access and manage particular segments of the business. Companies with multiple eCommerce stores, such as corporate chains or franchise networks, can utilize an application programming interface (API) to control their stock levels, allowing designated managers to access inventories, product descriptions, orders, etc. These managers are then able, for instance, to set distinct billing information or monitor the status of individual shipments. This approach makes working in multi-brand or multi-country stores much easier and mitigates the risk of a security breach.
5. Providing payment methods
Another crucial aspect to consider when expanding internationally is payment methods that would suit customers in a chosen country. Integrating payment methods preferred by a target market can determine the outcome of the checkout process and improve conversion rates. Additionally, remember to include modern payment methods like digital wallet (ApplePay, GooglePay) or BLIK (a payment system in Poland that allows one to make instant payments and withdraw cash using only the user’s standard mobile banking app). By providing payment solutions that are popular within a region where your eCommerce site operates, customers can easily buy products and services using methods they are familiar and comfortable with, which increases the likelihood of purchase completion and customer satisfaction.
Sylius payment solutions: Adyen, Mollie, PayPal, and more
Mollie offers a payment solution that supports multiple payment methods like PayPal, ApplePay, or PayU and provides features that enhance the checkout process. As a Sylius Strategic Technology Partner and the most advanced payment gateway integration with Sylius, Mollie allows for paying in different currencies, easy refunds and recurring payments, country-level restrictions, and much more.
Adyen is another universal solution for multi-channel payments, including in-app payments and in-store Point Of Sale (POS) support. The integration enables us to choose one of numerous payment methods, such as credit card and Google Pay. The undoubted advantage of Adyen is its integration with many local payment methods, for instance, BLIK in Poland or iDeal in the Netherlands. Its global reach makes it a versatile solution in the eCommerce market.
PayPal is one of the most well-known online payment solutions globally, offering a wide variety of services like online payments, money transfers, and merchant services. PayPal is also a payment method itself, as customers can pay via PayPal balance, linked bank account, or just credit/debit card details.
Thanks to the integrations with the aforementioned payment service providers, Sylius can serve customers in almost any market. The choice depends on business requirements as well as customer preferences.
6. Operating in multiple languages and many currencies
Last but not least, expanding your online business to accommodate multiple currencies and languages is a critical step in tapping into the global market. Implementing multi-currency support enables customers from different countries to see prices and make payments in their local currency, which can greatly enhance the user experience and increase the number of online purchases.
Operating in multiple languages, in turn, enhances personalization on a website and enables customers who speak only their native language to navigate the online store. Most consumers, about 72.4%, indicate they are more eager to purchase a product if its information is presented in their local language.
Multi-language in Sylius
As Sylius supports internationalization on many levels, it provides a multi-language feature, allowing businesses to cater to a diverse customer base globally. It enables the display of product information, categories, and static content in multiple languages, enhancing the user experience for customers from other countries. Store administrators can easily add new languages and translate all elements of the store interface, including product descriptions, menus, and marketing content, directly from the admin panel.
The multi-language support is also SEO-friendly, as it allows the use of language-specific URLs and meta tags, helping to improve the search engine ranking in different regions and languages.
Multi-currency in Sylius
What’s more, Sylius also offers to operate in many currencies. By utilizing it, customers can shop and check out in their local currency. Each channel operates only on one Base Currency, but prices can be shown in multiple ones, with a ratio between them configured by Exchange rates. Exchange rates provide automatic currency exchange rate synchronization with services like the European Central Bank, allowing for real-time updates to currency rates. Store owners can set prices in different currencies or have them automatically calculated based on the exchange rates.
Expanding into foreign markets can help your online store reach more customers and grow your eCommerce business. However, before you start conquering the international market, take some time to do research or ask your team to do so. Jumping into deep water may not be the best idea. Secondly, analyze your business in terms of technology and logistics. Your eCommerce platform should be your ally and not the source of problems.
Growing your business internationally isn’t just about getting bigger; it’s about changing your business to do well in the always-changing world market. This approach helps the business stay competitive and capitalize on global eCommerce sales.
Due to Sylius Plus flexible architecture, modules can be bought and implemented separately according to business needs. If any of the abovementioned functionalities raised your curiosity, we are happy to answer your questions or help with eCommerce expansion! Contact us.