Going global: ten steps to success for merchants

Over the last decade, ecommerce has experienced exponential global growth. A wider array of markets has encouraged greater competition and provided more opportunities for online merchants to reap the rewards. However, staying ahead of the competition in such a climate is easier said than done and, if not approached properly, going global can put merchants at risk of falling behind. With this in mind, here are ten simple steps to success for merchants who want to go global:

1. Assess cross-border market opportunities

Consider the barriers to trade in the regions that interest you and make sure the benefits of doing business in the area outweigh the costs of meeting market needs and expectations. Also, do not dismiss high-growth markets, such as Vietnam and Poland, which might be relevant for your business, but not the regions that spring to mind when looking for new sales opportunities.

2. Know your market and audience

This is important not only in terms of what you sell and to who, but also in terms of relevant payment preferences. Online casinos do not accept credit card payments due to the fraud potential, while travel websites need to offer customers the option to pay via credit card due to the high value of the transaction. Sale conversions are linked to the provision of appropriate payment methods – and payment behaviour varies by demographic. In many cultures, younger people are more likely to use nontraditional payment methods, but if your target audience is primarily older, this may not be relevant.

3. Plan your marketing strategy

Consider your target market carefully. For example, a German national buying furniture online would rather not pay for a new sofa in advance, but wait for delivery and then pay directly from their account. Think about the behaviour of your target customer and which marketing strategies will resonate best with them. If this is out of your remit, then working with a local marketing partner will provide the necessary knowledge to attract and retain business in the region, supporting long term growth.

4. Plan your market entry

The best marketing plan in the world will fail if not supported by a well thought through market entry strategy. Consider the best way to set-up shop in a new region, as it will differ depending upon your business model and regional knowledge. Do you first need to use a partner to sell via an online marketplace, auction site or through an established local vendor? Or can you enter the market alone, right from the start?

5. Consider your market share and positioning your current market(s) may be crowded or dominated by one or two big names.

If you enter an emerging market with a carefully tailored and localised offering, you could grab a large slice of that niche before others do.

6. Review payment methods

When it comes to payment options, decide how much risk you feel comfortable with. Some payment methods may be convenient for customers, but carry a greater burden of chargeback risk or other costs to the vendor. This type of risk can often be mitigated for example by offering less risky forms of payment (such as SEPA direct debits) for goods below a certain value or to trusted customers. Push payments, which are proactively sent by the client, are less risky in terms of chargeback but their use must be balanced with local preferences. Examples of push payments include giropay in Germany and iDEAL in the Netherlands.

7. Personalise your ecommerce offering for local needs

Make sure customers are only offered the payment methods relevant to their location, in a regionally-appropriate format. There are several ways of doing this, including local versions of websites and identification of site visitors by location, which then dictates the pages and payment options available. you should offer each visitor, ideally, around five of the most popular payment options in their location, to maximise your chances of making a sale.

8. Do not procrastinate

Online retailers wanting to take a share of emerging markets need to act now, while the trend towards internationalisation is in its infancy and market niches are free.

9. Compliance matters

As a business, you must comply with a multitude of legal, financial and customs regulations of the markets you trade in. It is, therefore, crucial to keep abreast of and respond to any regulatory changes in a timely fashion. This generally demands external exper tise, particularly as the penalties for non-com pliance can be extremely tough.

10. Consider third-party support

When making a foray into a new market or region, it is important to keep on top of commercial and regulatory barriers and implement the best alternative payment methods. This is fundamental to the success of your business expansion. However, very few retailers have sufficient expertise in-house to manage all of these matters optimally, so finding a partner who can support you on your global journey can be the key to success.

While the prospect of ‘going global’ is still new for some, it’s vital for merchants to break into new regions quickly, armed with the best strategy and proposition to seize the opportunities, before the competition swoops in. Only by taking this approach can merchants win new customers and multiply their bottom line, building new revenue streams and expand into new regions. Global success is only a few steps away, and now is the time to go for it.

About Ralf Ohlhausen

Ralf Ohlhausen, MSc in Mathematics and Master of Telecommunications Business, has over 25 years experience in ecommerce, financial services, mobile telecoms and IT. Ralf is responsible for expanding the company’s portfolio and global reach, as well as for developing new business areas and partnerships.

About PPRO

PPRO enables integrated electronic payment processing on a global scale spanning the entire payments value chain from acquiring through processing, collection and settlement. Positioned as ‘The Payment Professio nals’, PPRO acts as a B2B payments hub, connecting PSPs and other merchant aggregators, such as acquirers and processors, with local payment schemes.

This editorial was first published in our Payment Methods Report 2018 – Innovations in the Way We Pay. The Payment Methods Report 2018 presents the key trends and developments in global and regional payment methods by highlighting the innovation, challenges, and developments in the use of the most important payment methods across geographies and verticals.