This article was originally published by the International Association of Business Communicators -see http://www.iabc.com/cwb/archive/2005/0305/international.htm
Linda, an American living abroad in a country with limited
merchandise, orders online for books, contact lenses and smoked ham. Her Dutch
husband buys from www.amazon.com and www.ebay.com because U.S.-based retail web
sites offer a wide range of goods at a cheaper price than their adopted
country, including lower import duties and lower shipping costs from U.S.-based
cargo carriers.
© 2012International Association of Business Communicators.
601 Montgomery Street, Suite 1900 San Francisco, CA 94111 USA
Lourdes, a Peruvian immigrant in New York City, wants to
surprise her family back in Lima on special occasions with gifts, including
birthday cakes. But to do so from the U.S. requires planning, packaging and
time, and cakes are out of the question. Thanks to www.tortasperu.com.pe, a
network of housewives in seven Peruvian cities, Lourdes' relatives can receive
fresh, high-quality cakes in a timely manner.
Welcome to the burgeoning field of marketing tangible goods
internationally through the Internet. Already, global e-commerce is used to
find information, software, financial advice, ticketless travel and music,
which can be downloaded directly to the customer's computer. Is the Internet really a viable
business-to-consumer (B2C) marketplace for non-downloadable consumer goods?
Internet Commerce Data
A 2002 survey by Taylor Nelson Sofres (TNS) found that 28
percent of Internet users globally either have shopped online or plan to do so
within the next six months. Exactly how much of this shopping is domestic or
cross-border is unclear. However, a ComScore Networks study shows that 10 to 15
percent of e-commerce sales by U.S. retailers are to customers outside of the
U.S.
At 32 percent, the United States has the highest percentage of
Internet users who shop online. South Korea, France and Norway are other
nations with a significant number of online shoppers.
According to Internet audience measurement service comScore
Media Metrix, the top-selling product categories, excluding travel, are
computer hardware (US$2.3 billion), office supplies (US$1.5 billion), apparel
and accessories (US$1.3 billion), consumer electronics (US$716 million), home
and garden (US$442 million), music (US$193 million), furniture and appliances
(US$179 million), and toys (US$114 million).
These figures indicate potentially significant cross-border
revenues. Yet according to CyberSource, an e-commerce payment services
corporation, 41 percent of U.S. merchants do not accept overseas orders,
primarily because of fraud risks and the logistical complexity of filling
international orders. Interestingly, a 2003 VeriSign survey indicates that
almost half of fraud attempts come from the United States (47.8 percent), with
the rest made up of small percentages from various other countries.
Two Major Consumer Worries
Merchants are not the only ones concerned about international
Internet orders. There are two major concerns for any overseas buyer, whether
they are in the United States or the United Arab Emirates:
Security of Card Transactions
A 2002 annual report by TNS found that the biggest impediment
to cross-border e-commerce is concern about security. Almost one-third of
Internet users who have not shopped online stated that they were uneasy about
giving credit card details online. It is therefore crucial that merchants
inform online shoppers of security measures in place and the availability of
other online payment methods such as WorldPay (www.worldpay.com) and PayPal
(www.paypal.com).
Shipping Reliability
Postal pilferage and theft are rampant in many countries. In
addition, FedEx, DHL or UPS have rates that make shipping any product very
expensive.
In many North American neighborhoods with a high concentration
of immigrants, there are shipping companies that reliably deliver packages to
towns and villages, and include local and foreign customs duties in their
charges. Marketing and promotional partnerships with these cargo companies
might prove lucrative.
Market Niche
The cases of Linda and Lourdes indicate that entrepreneurs on
both sides of a border can benefit from international e-commerce, despite
challenges like potential fraud attempts and logistics. However, from a U.S.-based standpoint, who do
we target, with fewer risks, and how?
Expatriates
Linda is one of millions of Americans living overseas who
still carries a credit or debit card from a U.S. bank. While one is living in a
country where there is a dearth of U.S. products or where those products, if
available, are incredibly expensive, there will always be a strong need to
order online overseas. In some cities, organizations of expatriates have
created their own web sites. One way for them to generate organizational
funding is through paid links on these sites.
Low U.S. shipping costs are also an attractive selling point
for those far from home. Promotions like Amazon.com's new offer of unlimited
two-day shipping for an annual US$79 family membership will surely make the
online market more competitive.
Immigrants
First-generation immigrants often have very strong ties to
their home countries, which means connecting not only through letters but also
through gifts. Advertising in multilingual media will help convert newcomers
into customers. Marketing and public relations work best when targeting select
groups.
On the other side of the coin, online merchants could also
consider appealing to home-country relatives who surf U.S.-based retail sites
and who might then send requests to their relatives living in the U.S.
Advertising in home-country media would also support outreach in the U.S.
E-ready countries
The Economist's Economist Intelligence Unit has developed an
e-readiness ranking to indicate how conducive a country's business environment
is to Internet-based commercial opportunities. E-ready leaders in this ranking
are the U.S., Canada, Western Europe, Japan and Australia.
There are, however, many other countries ranked highly in The Economist’s
measurements, including Brazil and Venezuela in Latin America, South Korea and
Taiwan in East Asia, and Algeria, Egypt and South Africa on the African
continent. In many of these countries, people study English as the language of
commerce. This means they also surf English-language web sites. Advertising and
web sites that target this sector should be visual, detailed and descriptive,
and should use simple English, especially in payment instructions. These sites
should also explain concepts like 1-800 numbers, which might not be familiar to
an international audience.
Is the Internet a viable B2C marketplace for non-downloadable
consumer goods?
Provided businesses carefully select a region to market to,
partner with local representatives and distributors, and exercise caution when
accepting orders from countries with a high risk of fraud, the answer is yes.
Joseph Lopez is an international strategic planner and
communications consultant. His e-mail is writetojosephlopez@yahoo.com
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