Internationalisation in e-commerce: strategies, objectives, shop system

Is the grass always greener on the other side of the fence? That's only partially true, but there are certainly plenty of green pastures beyond the fence. Or, to put it less metaphorically, Germany is indeed an attractive market to start with – well-developed infrastructure, around 83 million mostly affluent residents – but when it comes to internationalization, there are even better opportunities.

The European Union alone boasts 450 million people, the United States is home to 332 million, and India has an incredible population of 1.4 billion - all potential customers. Anyone who doesn't consider internationalizing their business is missing out. While online commerce has certainly simplified international business, challenges and pitfalls still exist everywhere. That's why we're here to inform you. In the following article, we'll demonstrate what successful internationalization strategies look like, where risks are present, and how to properly prepare your online shop for international expansion.

Beginner's question: True internationalisation or cross-border e-commerce?

Basically, there are two ways to break into the international arena:

internationalised e-commerce: Internationalisation in the economic sense is always a major project. It can involve setting up a logistics network or opening a subsidiary abroad, always requires comprehensive strategies and analyses, and represents a financial risk that should not be underestimated. However, the rewards for a successful implementation are numerous new customers and significantly more turnover.
Cross-Border e-commerce: Cross-border e-commerce, on the other hand, is much less complex. You simply enable foreign visitors to your shop to import your goods. At best, you can offer your website in different languages or advertise abroad.

To test yourself internationally, get initial feedback on your products from beyond borders, and expand your potential customer base, Cross-Border E-Commerce is a suitable tool. Especially within the EU, this form of trade is convenient due to the largely uniform currency and legal framework. However, for sustainable business growth, Cross-Border E-Commerce is always just an initial step. Therefore, we won't dwell on it further and instead focus our attention on real internationalization.

Step by step: The planning stages of successful e-commerce internationalisation

Once you've decided to internationalize your business, the next step is to think like a project manager using the principle of divide and conquer. By breaking down your international market entry into phases, you can maintain control, avoid mistakes, and minimize risks. The following division has proven effective:

Choose target market: In order to select the right target market, a comprehensive market analysis is essential. Where is the demand for your product? How big is the competition? Can I price my products according to the purchasing power of the country? What cultural and legal differences do I need to consider? The choice of target market determines all further steps.
Define goals: Based on the chosen target market and the knowledge gained about it, the next step is to define clear objectives. With which products do I want to enter the market? What sales figures do I need to achieve in order to be able to work profitably? What is my marketing strategy and which partners should I bring on board?
Choose a distribution model: Once all the objectives have been defined, the next step is to implement them. The best place to start is with your sales model: which sales channels will enable you to achieve your goals in a sensible, cost-effective and timely manner? More on your options below.
Choose logistics type: Depending on your distribution model, you need to choose the right type of logistics - more on this in the next section.
Choose the right software: Finally, you need software that not only supports internationalisation internally - for example, by automatically adjusting currency and language - but is also externally compatible with your chosen sales and logistics model. For example, if you have chosen to work with a local fulfilment service provider, the interfaces to their software are a crucial factor.
Start and control your project: The first five steps were the duty, now comes the kür. Everything you have planned in theory and on the drawing board must now be put into practice. As with any project, it is important to have a clear division of labour: each project member must know their responsibilities and exactly when they have to complete which tasks. Now is also the right time to bring external expertise into the team, such as legal advice on selling outside Europe.

Strategy consulting: Internationalisation strategies for sales and logistics

For the concrete implementation of your internationalisation, you can choose between different strategies for sales and logistics, which differ greatly in terms of effort, legal framework and economic autonomy. These are:

Export: The simplest form of foreign trade, usually only practised as a B2B model. A foreign wholesaler buys your goods from you and takes care of all the rest on the spot.
Licence and Franchise: You grant a local company the right to produce and sell your goods. In the case of a licence, the licensee is free to implement the licence; the franchisee undertakes to implement a marketing concept specified by you one to one.
Cooperation: You take the step across the border with a strong local partner. One example is smartphone manufacturers who sell their products through local phone companies.
Joint Venture: Here, too, you are working with a domestic partner. However, together you set up a third company that is legally independent of its parent companies.
Branch office: You set up a subsidiary in the destination country that is legally part of your company in Germany.
Subsidiary: Unlike a branch, a subsidiary is legally independent of its parent company.

In a cooperation or joint venture, you can typically rely on the logistics network and expertise of your local partner. When you establish a branch or subsidiary, you start from scratch and are compelled to build your own fulfillment or procure relevant services. The choice of which model is right for the internationalization of your company depends on the results of the market analyses you conducted beforehand.

Tip: Everything you need to know about successful market entry strategies

The Key Challenges of Internationalization in E-Commerce

The best strategy is worthless if you overlook the details. Some of the biggest obstacles to successful internationalisation include

Legal issues

The number one pitfall in international e-commerce is always the legal framework in the target country. From import regulations to consumer protection issues and tax requirements, there are countless details to consider. Even within the EU, there can be significant differences in legislation between member states. For example, loose shorts are not allowed in French swimming pools for hygiene reasons. So offering Bermuda shorts as swimwear in your shop would be the first legal misstep. To be on the safe side, we recommend that you always seek expert advice.

Language and culture

Professional translation of the entire shop into the language of the target country is also high on the agenda. Relying on the machine has cost many companies their reputation.

It is also essential to understand the cultural peculiarities of the target country and to optimise the website and customer service accordingly. For example, US online shoppers tend to shop visually and prefer a short list of product highlights. The Swiss, on the other hand, appreciate prompt reliability; they do not wait for the train or for your customer service. The best way to familiarise yourself with the target country's customs is to include locals in your project team.

Logistics

Building your own logistics network is one of the most costly and challenging aspects of successful internationalisation. Rather than trying to do it all yourself, it's usually best to start by leveraging existing solutions. Partnering with local fulfilment service providers is not only much more cost-effective, but also offers numerous advantages: local providers are not only familiar with the legal framework, but also understand the cultural nuances of their home region. So if you use trusted service providers for tasks such as returns management, you're likely to run into fewer problems than if you handled it yourself. Just make sure that your partner's software integrates with your system so that you can continue to monitor and control all transactions effectively.

Marketing

After all, international markets differ in terms of which marketing strategies actually work on the ground. It's the little things that count. For example, which keywords in an advertising campaign are most relevant in the target country, or which social media platforms are most frequented by the target audience there. Again, it is advisable to rely on local expertise first, either by partnering with a German agency with the necessary experience, or by involving a local marketing agency. In this way, advertising can be effectively designed and targeted. Working with experts is highly recommended, especially when first establishing yourself in a new market.

Pitfalls: The most common mistakes when internationalising an online shop

In addition to the challenges that internationalisation always brings, there are also typical mistakes that are made regardless of the target country: They have already doomed many a global venture. These dangers should always be kept in mind:

Betting on the wrong team

Successful internationalisation requires not only a great deal of tact, but also deep familiarity with the target country. Relying on inexperienced staff just because they have a bit of breathing space in their schedule can quickly turn out to be a costly mistake.

Too few resources

Crossing borders is always a project - and a project can only be successfully completed if sufficient resources are available. This applies both to the financial budget and to the human resource: Pushing internationalisation onto a handful of colleagues in addition to their day-to-day work will inevitably lead to failure and frustration.

Bad timing

Choosing the right time is a crucial factor for successful entry into the international market. Too early and your company is overwhelmed by the challenges. Too late and the target market is saturated and saturated. Make sure you have all the resources at your disposal and that you have thoroughly analysed the new market.

The wrong shop system

As an e-commerce business, the shop system is the tool you and your team use every day. If it does not fit perfectly with your strategy, you are doomed to fail in international waters.

In fact, this point is so important, and the "we've been using shop system XY for ten years; it'll work in Canada" approach so common, that it deserves its own section:

Tools: What a shop system must do for internationalisation

Performance, scalability, functionality - these are the three key characteristics that will help you identify a shop system that will successfully support your internationalisation. You should pay particular attention to the following points:

1. Multilingualism

You should not have to create a separate website for each language version of your shop. It is much better to be able to manage and control your shop - in whatever language - from a central point. It is also desirable to be able to let visitors choose the language displayed. After all, Switzerland has four official languages, Belgium three and Finland two.

2. Logical URLs

The multilingualism of your shop determines the form in which its internet address should be displayed. Cryptic URLs are not good for marketing, nor do they stick in visitors' minds. The best system allows you either to adapt your top-level domain (such as TopShop.de and TopShop.uk) or to work with subdomains (TopShop.com/de and TopShop.com/uk).

3. Currencies

It is also important for the shop system to be able to convert currencies according to the current exchange rate and to display prices ex and including the local VAT rate. Ideally, the software can even be configured so that the price of an item can vary depending on the location, even if the currency is the same. Think of the eurozone and the purchasing power of individual countries.

4. Performance

Internet users are an impatient lot. They wait a maximum of three seconds for a page to load. If it takes longer, most of them will turn away. Your shop system has to work just as fast. Having all your servers in Germany will not help your sales if the Australian loses interest in your shop. Globally distributed data centres with fast access times are crucial at this point.

5. Interfaces

Smooth shipping and easy returns are also part of a successful customer journey. When expanding abroad, it is often a good idea to work with a service provider. However, it is not very helpful if the communication between you and your partner takes place exclusively via e-mail. Much more efficient is a real-time data exchange and full control over all orders and returns. In practice, this only works if your shop system has as open APIs as possible.

6. Customisation

It is also not very helpful for successful internationalisation if your shop system is limited to a handful of designs and themes. A good user experience looks different from country to country: The American wants large photos and live chat, the German wants to study the data sheet in peace.

Your store should therefore be able to be customised for each country, both in terms of design and functionality. There is no such thing as a one-size-fits-all solution for every country and culture on the planet.

7. Checkout

While we are on the subject of cultural differences, there is one thing that people do agree on - at the checkout it is time to get serious, because this is where personal data and, above all, money are at stake. In order to prevent shopping basket abandonment and ensure an optimal conversion rate, the shop system must be as flexible as possible. This means The most popular payment options in each country must be provided, the order form should be structured and pre-formatted in the way that users are used to, and data protection must be in full compliance with local legislation.

8. Sustainability

The best shop system scales with sales - even internationally. It automatically switches on more computing power when you need it, and will not collapse under the onslaught of visitors on either the Chinese New Year or the Mexican Día de Muertos. Future-proof also means that your shop system is able to react to current developments and implement the latest technological trends on the web.

Augmented reality is an example of this: More and more shops are making it possible to virtually try out or try on goods, thus taking one of the most important advantages away from bricks-and-mortar stores. Shop systems that are hermetically sealed off and do not allow experimental technologies to be implemented are quickly losing ground.

Expert Tip: Shopify Plus for your international success

Internationalisierung mit Shopify Plus

As online store experts, we would like to give you the following advice at this point: Go for Shopify Plus for your international breakthrough. As a shop system, it not only fulfils all the criteria listed above, but also holds two further advantages for you in comparison to its competitors:

Shopify Markets Pro: Shopify Markets Pro is Shopify's integrated solution for global ecommerce. As an all-in-one solution, it not only lets you manage all your international storefronts from a single control centre, but also handles administrative tasks such as automated payment of duties and import taxes.
Shopify Flows: Shopify Flows, on the other hand, is the drag-and-drop system that allows you to automate a wide range of processes within Shopify Plus. Even complex logic can be programmed without any IT knowledge. This not only saves a lot of time, but also money.

A big challenge: Managing e-commerce internationalisation

The step onto the international stage seems risky at first glance. The financial commitment is high and the time invested is measured in months. However, with the right preparation and planning, the risks can be significantly minimised. Winning new customers and entering new markets may not be a walk in the park, but it is a worthwhile investment. We are happy to accompany you on your way to new horizons. Just get in touch with us for your next project.