Technology | Media | Telecommunications

Saturday, March 03, 2012

American Online Retailers Seeking New Markets


American online retailers have compelling reasons for selling to potential customers in other nations. According to the latest study by eMarketer, as ecommerce growth slows in the U.S. market, retailers are seeking new revenue opportunities in foreign markets.

This is especially true in emerging internet economies such as China -- where B2C online sales are forecast to grow at a 94.2 percent compound annual rate from 2010 to 2015.

"Some U.S. retailers have started to sell online internationally after seeing significant amounts of site traffic coming from abroad," said Jeffrey Grau, principal analyst at eMarketer.

Retailers that hesitate now may face higher entry barriers later -- as competitors team up with the most desirable in-country business partners and earn the loyalty of local online consumers.

The most popular foreign countries for American online retailers have been Canada, the UK and Australia -- highly developed markets that share linguistic and cultural affinities with the U.S. market.

However, the markets with the highest growth prospects -- and which also present some of the biggest challenges -- are emerging ecommerce economies like China, Brazil and India.

According to a March 2011 Internet Retailer survey, a majority of online merchants -- led by web-only and chain retailers -- indicated they sold online to consumers outside the U.S. market.

However, the extent of merchant operations when selling online to foreign consumers can run the gamut, from merely accepting international orders without providing customer support to having country-specific websites and operations abroad.

Ecommerce adds a new dimension to global retailing. Selling abroad is nothing new for some long-established American retailers. But complementing foreign brick-and-mortar stores with an ecommerce counterpart capitalizes on the burgeoning multichannel shopping trend.

"Even in entering highly developed markets like the UK, Japan and South Korea, retailers have stumbled by mistakenly assuming these markets are built in the same mold as the U.S. market," said Grau.

Each market abroad, no matter how developed or superficially similar to that of the U.S., has unique characteristics that American retailers must take into account if they are to succeed.