In today’s digital world, ecommerce is growing rapidly. To keep up with the pace of global growth and seize opportunities as they arise, brands need to be fast themselves.
But it’s not all about next-day shipping and rapid customer service. Internally, organizations need to possess agile ecommerce operations and unlock efficiencies that allow them to thrive in global markets.
Dig into some of the challenges that face international ecommerce operations below. Learn what it takes to drive ecommerce efficiency—and cut costs where it counts.
Ecommerce Operations Basics
At its core, ecommerce operations encompass the myriad behind-the-scenes tasks that keep an online business running smoothly. These operations ensure that when a customer clicks “buy now,” the machinery of the business springs into action—fulfilling orders, managing inventory, handling customer queries, and much more. But it also encompasses everything that comes before that—ideation, marketing, design, all that it takes to stand up an ecommerce brand in the first place.
The key elements of operations include order management, inventory management, logistics, customer service, and the overarching digital strategy to bind it all together. As the business scales, these operations must evolve, and new elements, like international compliance and global customer outreach, come into play.
International Ecommerce Operations: What It Takes to Go Global
Going global with ecommerce operations isn’t merely about replicating domestic success in a foreign market. International expansion requires understanding and navigating the unique differences of each market, like tax, customs, and compliance burdens that vary across borders.
Every country presents its unique set of regulations, from data protection standards to sales tax rules. However, there’s much more to new markets than their regulations. No matter where you go, ecommerce remains a customer-centric business. That’s why it’s crucial to obtain in-market expertise, understand regional norms, preferences, and buying behaviors. Customer service and branding need to align with local expectations, factoring in language, cultural nuances, and local holidays.
Without local expertise, you might wind up generating more laughs (or lost customers) than conversions. For instance, when KFC first entered China in the 1980s, in an attempt to hold onto their famous “Finger-lickin’ good” slogan, they wound up telling their new customers to “Eat your fingers off.” Mistakes can go far beyond poor translations, though. It’s been reported that, in the 1950s, PepsiCo mistakenly lost its dominant position over Coca-Cola in Southeast Asia after it changed its vending machines from regal blue to a light blue that was locally associated with death and mourning.
The Risks (and Costs) of Complexity
Despite these added operational burdens, diving into international ecommerce waters can be quite lucrative. After all, there’s a reason the global ecommerce market is expected to top $6.3 trillion in value this year. Still, every move into a new market comes not only with new costs but also significant risk.
As mentioned above, establishing a presence in each new market often involves significant upfront investments, from potentially setting up local warehouses (or sorting out cross-border shipping requirements) to hiring region-specific experts. But the costs don’t end there.
The deeper complexities, such as adhering to local regulations and managing tax liabilities, can send expenses spiraling further. These challenges, if not addressed adeptly, don’t just affect the bottom line; they can come with reputational risks and regulatory penalties. They can even, in the end, jeopardize the entire venture in a region.
Beyond the immediate financial implications of increasingly complex ecommerce operations, there’s another important consideration: speed to market (or lack thereof). The exhaustive process of establishing operational infrastructure in a new region can cost organizations significant amounts of time—sometimes years. More agile competitors will get the benefits of being first to market to capture new customers and establish loyalty.
A Cost-Saving Solution for Ecommerce Efficiency
For established ecommerce brands, cost-saving and efficiency-increasing strategies abound, from optimizing marketing spend and automating repetitive tasks, to leveraging data and reducing customer churn.
However, for organizations looking to expand into new international markets, the real key to success lies in finding an experienced partner like Digital River. As merchant of record, Digital River assumes the financial and legal responsibilities of selling online and eliminates the need for multiple vendor contracts and overlapping integrations.
By leveraging an experienced partner you’ll quickly improve your operational efficiencies, cut costs, and greatly accelerate your speed to market. For example, recreating the comprehensive solution offered by Digital River on your own might lead you down a tedious path that involves:
- Managing 3–10 additional vendor relationships.
- Hiring and onboarding 8–10 more resources or specialists.
- A staggering 2–3 years just to open and establish a foothold in a new market.
Digital River helps brands avoid significant operational cost increases of 20–30% while accelerating expansion into new markets in as little as 6 weeks. Learn more today about this recipe for global growth and ecommerce ROI.