Avid online shoppers are looking beyond their domestic markets in a quest for new products, at the best prices.
As we mentioned in our recent report – where is your brand growth coming from? – the appetite for cross-border ecommerce is growing rapidly, particularly in Europe, with the number of international retail web searches increasing year over year.
The challenge for brands with an online presence is to spot new opportunities for ecommerce growth within this expanding European marketplace. Many western European regions already support highly mature ecommerce models in markets that are more saturated.
As a result, motivated brands are looking to less developed European territories such as Russia, where the €10.4 billion ecommerce market is still emerging and currently only accounts for two percent of the country’s total retail market.
Clearly there is greater opportunity to tap into a share of Russia’s online shopping revenue, but many brands are reluctant because of its logistical challenges, not least offering the optimum mix of online payments options. At present, most Russian shoppers prefer to pay by cash, or local payment methods such as e-wallets like Qiwi, WebMoney and Yandex.Money – not the credit or debit card options that most international ecommerce websites rely on.
Brands that want to successfully expand their reach into the country need to make it easy and convenient for customers to pay by using methods that they have confidence in and trust.
Russia isn’t the only market where payments play a decisive role in online success. Looking further afield to opportunities outside Europe, China is another interesting frontier for international expansion. The government relaxed controls over the Chinese payments industry last year. This change has brought new payment providers into the mix to establish the country as a hub for global ecommerce.
Opening the door for international payment providers in China is significant, as the Asia-Pacific region is predicted to become the largest market for cross-border online retail, accounting for 40 percent of all sales by 2020 – and most of this growth is expected to be driven by China.
Regardless of which geographies are on a brands’ international expansion list, if they are planning to grow their online businesses outside their domestic borders, payments will play a critical role in ensuring that their customers have a seamless ecommerce experience. Launching a brand overseas is challenging enough, and a poorly optimised journey to purchase can damage a consumer relationship before it’s really had a chance to develop.
To help online brands understand the essential role that payments play within their international expansion strategies, Digital River has created a X-border Payments Optimization Index, which tracks friction within the cross-border shopping experience.
Our aim is to support brand growth, by highlighting areas where improvements can be made in the online purchase process – so brands can offer customers the same standard of service in all markets, and consumers can browse, buy and pay in a seamless manner across the world.
After all, trading in multiple markets is one thing; maximizing conversions across those markets is another challenge altogether.