Are you planning to craft a strategy for international expansion and enter new markets? In that case, you're probably asking yourself what the better option is: your own store or a marketplace. Let's break down the pros and cons of both.
International positioningis also important in e-commerce. On your own website such are understandable, but what about an external platform? Here, too, you can improve the visibility of your listing by optimizing it.
In this article you will learn about:
- getting ready for international e-commerce operations
- the benefits of running an online store and the challenges posed by having your own e-commerce website abroad
- the pros and cons of using marketplaces for sellers
- SEO for marketplaces vs a standalone online store.
How To Start Selling Globally as an E-Commerce
Here are some factors to consider when crafting a strategy tailored to a specific market's demands.
Foreign Target Market
Identify the country with the highest potential for your products. Consider factors like economic growth, digitalization level, and logistics challenges (carriers, warehousing, returns, etc.).
Market Specifics
Expanding your business abroad calls for studying consumers' buying preferences. It's crucial to understand local norms, values, and customs. Then, tailor your offerings, communication, and marketing messages to the local clientele.
Competitor Analysis
Look into which firms are already active in your niche within the target market and what extras they offer, like same-day delivery, in-store pickup, or phone support.
This analysis helps uncover competitors' strengths and weaknesses. It also highlights gaps you can fill with your own offerings, giving you a competitive edge.
Cross-Border Sales Laws and Regulations
Every market has its own unique e-commerce regulations, including consumer protection laws. Understanding these is vital to avoid costs and legal hassles and to meet the expectations of clients, partners, and contractors.
Logistics Infrastructure
Knowledge of available solutions for shipping and returns is essential when starting sales. In cross-border contexts, shipping methods, order fulfillment times, and return processes need to align with potential customers' expectations.
For instance, if most customers in a particular country prefer a specific carrier, consider partnering with them. Other areas to think about are storage and transportation.
Product Demand
Analyzing search trends can help you determine demand levels for your goods and understand consumer behavior — how frequently they buy the types of products you offer, during which periods they shop, and so on.
This is where data extracted from SEO analytics tools (Semrush, Ahrefs, etc.) and Google Trends, Google Keyword Planner or social media monitoring tools.
Shopify provides a comprehensive explanation on this topic: Market demand: how to identify and calculate it.
Pricing Strategy
Developing a pricing strategy for international sales requires a thoughtful approach. You need to consider various factors that influence price.
Here are the most important steps.
Check Local Currency and Purchasing Power
Look at the exchange rate and how it affects the prices of products/services. Then, adjust your prices to fit local purchasing power standards. In areas with low purchasing power, lower prices can help maintain competitiveness.
Consider Operational Costs
Analyze all costs associated with operating in a particular country. This includes logistics, storage, and local services costs. Set prices that are profitable for your business while still appealing to local customers.
Analyze Tax and Legal Regulations
Each market has different tax requirements, e.g. VAT, customs duties, export fees. Take these into account in your strategy to avoid unforeseen and unnecessary costs. Consider the assistance of local partners who can help you understand and meet regulatory requirements.
Examine Market Standards and Customs
Check out the prices of competitive products in the local market. You might need to adjust your pricing to match market standards or employ a "market penetration" strategy. Consider local consumer preferences and how the product's value is perceived.
Set Prices
Decide whether your strategy should be uniform (same prices across all markets) or differentiated (prices adapted to specific countries). You might consider a "premium pricing" strategy if the product is unique or a "penetration strategy" to gain market share.
Monitor and Optimize Your Pricing Strategy
Regularly review and adjust prices based on factors like currency exchange rate changes or regulatory updates. Monitor consumer reactions and sales performance. Optimize prices to meet your set goals.
Promoting Your Brand Abroad
Digital marketing comes in many forms. Some can boost product sales quickly, like Google ad campaigns. Others have a long-term impact, such as Digital PR and content marketing.
The places where the shopping journey begins are crucial. In most cases, it starts with a search engine, but it's not always Google.
The survey results, published in the Amazon Shopper Report say 66% of shoppers begin product searches on Amazon, while 34% use Google. This study, conducted in 2022, involved 1,000 individuals from the United States, Germany, France, Spain, and the United Kingdom.
Below are other data points that lead to a similar conclusion — product research often begins on Amazon, though Google also plays a role.
Of course, it is worth researching the target country. E.g. in the US, consumers start their search also from Amazon (56%), but the search engine is second (42%), and Walmart.com is third (29%). The fourth position belongs to YouTube (13%). This service is not only the beginning of the shopping path for many people, but significantly enriches it.
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Distribution channels
It is good to consider diversification of promotion channels, but also channels that will generate the expected revenue.
Selling through one's own website creates a number of opportunities that can prove crucial to a long-term presence in a new market. A marketplace, on the other hand, is a way to enter a market quickly and with less risk.
Custom e-commerce website:
- Optimization under the algorithms of Google, Seznam, Bing, etc.
- Building your own customer base
- Collecting your own customer data
- Competing with other stores in the search engine
- No need to submit data to the search engine
Marketplace:
- Optimization for each platform's algorithms
- Immediate access to a large customer base
- Less user data
- High competition with similar product range
- You need to provide data to the marketplace
In the following section, we will look at these two foreign sales channels in more detail.
Sales in foreign markets: online store
Both large enterprises and smaller companies are investing in their own e-commerce site. This is due to many reasons, such as:
- Control over user experience
- Building the image of your business on your own terms
- Acquisition and analysis of customer data
- Ability to contact customers directly through any communication channel
- Flexibility in setting pricing and promotional strategy
The e-commerce owner has a say in how his site looks and works. He can customize the site according to customer expectations. A proprietary platform allows the entrepreneur to create a brand identity - from the aesthetics of the site to the communication and promotion of products.
Analytical tools plugged into the site give access to valuable purchasing data.
Marketing automation systems deployed on the site allow you to control purchase paths and create automation scenarios, such as shopping cart rescue - especially since on average 70% of shopping carts are abandoned.
In addition, entrepreneurs in their own store can freely shape the pricing policy, offer discounts and promotions. And thus manage the stock more efficiently, for example, selling off the end of the collection.
Challenges in the international arena
In addition to the advantages of running their own store in a new market, entrepreneurs and managers face challenges, among them:
- Higher initial costs
- Technological and logistical complexity
- Positioning a website abroad
- Adapting business strategy and marketing to the country's realities
Handling multilingual platforms, diverse currencies, tax regulations and customs procedures, involves acquiring new information and using in-house or outsourced resources - and that costs money.
Launching and maintaining a store also involves costs. These are related to designing, implementing and operating technology, as well as investments in marketing and logistics. Moreover, competing in foreign markets requires a robust and comprehensive SEO strategy, which includes:
- Technical SEO on the site,
- analysis and keywords,
- content plan,
- A plan for building a network of local links.
The market entry process also means that the company undertakes to gain the trust of local consumers. There are often cultural barriers to overcome.
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Selling abroad: e-commerce platforms
Marketplaces in 2023 accounted for one-third of global online sales. Sites such as Amazon and eBay give sellers access to a multi-million dollar customer base. However, this requires an adaptation of the strategy to the rules of these platforms and the ability to differentiate the offering among the numerous competitors.
What are the advantages of a marketplace abroad?
- Immediate access to a large customer base
- Customer confidence in well-known marketplace brands
- Operational simplicity
- Less investment in logistics infrastructure
Entrepreneurs can quickly increase their visibility and reach new customers without having to build their own base from scratch. Moreover, consumers often trust well-known marketplaces. New or unknown brands can help boost credibility without intensive marketing efforts.
Starting to sell on a marketplace does not require a large initial investment in technical or logistical infrastructure. These sites offer ready-made systems for payment, order management and often logistics support.
These services also have their own applications, which are downloaded annually by millions of users worldwide. In 2023, the Temu.com app was downloaded 338 million times, and Amazon Shopping more than 188 million.
Challenges in selling on the marketplace
Using e-commerce sites is one way to enter foreign markets, but it is not without its drawbacks or challenges. We are talking about issues such as:
- Limited branding and targeting offerings
- Sales commission
- High competition with similar product range
- Limited customer contact
- Marketplace policies and regulations
On the marketplace, you have limited opportunities to differentiate your brand (but it is still possible). This often leads to standardization of your offerings and a greater emphasis on price rather than product value.
Marketplaces charge a commission on transactions. In addition, similar products from different companies mean more competition, including on price. Sellers must follow the rules set by the sites.
Foreign expansion and SEO
If you want to sell products and services in the local market, don't overlook SEO in your export strategy.
Foreign website positioning
Effective SEO for a foreign online store is a synthesis of technical and content activities. Together, they form a cohesive, integrated strategy that results in:
- Improving visibility, position and traffic coming from a search engine. The most common is Google, but there are also others that can generate traffic in a given market, such as Seznam in the Czech Republic or Baidu or Bing in China.
- An increase in sales, which is most often directly proportional to an increase in website traffic.
- The image of the store in the minds of local consumers.
International positioning of a store not only improves positions in search results, but contributes to increasing conversions, accessing new customers and building lasting relationships with them.
SEO activities include:
- Technical optimization of the site, which includes page loading speed, responsiveness, ease of navigation, metatag optimization, among others.
- Building a network of links from local sites, blogs, industry portals, directories.
- Translation and localization of content.
- Analyze keywords and evaluate their potential.
- Regular monitoring of results and adjustment of activities - because foreign expansion is a process.
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SEO marketplace
SEO optimization on the marketplace to attract customers is a combination:
- Optimization of images, titles and product descriptions
- Assignments of relevant categories and tags
- Use of promotional tools
- Managing customer reviews and ratings
- Analyze sales data (e.g. ROAS, ROI, average order value, most frequently purchased products) and continuously optimize.
If we are talking about activities under the marketplace, Amazon will, like Google in classic SEO, be the former, the most important marketplace. For example, in Germany, Amazon has more than 45% of the traffic according to data from Semrush.
Rad Paluszak, Co-Founder & CTO NON.agency
In this case, we have a slightly more difficult task due to search engine optimization, because:
1 We work entirely directly on the platform - unlike Google and other classic search engines that take data directly from our website - we have to deliver the data to the marketplace, and our activities entirely take place there. This has its good points, because we can optimize everything regardless of the platform. On the other hand, we have to carry out the optimization independently, so we have to implement it multiple times (as many times as the number of platforms).
2. Each marketplace has a different algorithm - here, as above, we have an advantage and a disadvantage as a result.
3. We have much more limited optimization possibilities, but thanks to this, we also have more structured activities that are within a smaller area. The level of complexity of optimization is lower.
4. Some ranking factors are directly related to sales, and as you know, starting out, we have a small one.
5. Some platforms give a small amount of data on users, statistics, etc., so we have to do a lot more testing.
This is a very advanced topic, so to sum it up: Let's not lose sight of the possibility of gaining traffic on different platforms.
Own store vs. marketplace - summary
Choosing between an in-house store and a marketplace can have a critical impact on sales success during international expansion.
An analysis of the target market in terms of purchase preferences and level of competition will show which approach has more potential.
- There are countries where customers are more likely to buy directly from well-known marketplaces, while in others they may prefer to buy from specialized suppliers with their own store.
- On the other hand, if quick access to a broad customer base or testing interest in products is a priority - the marketplace may be a more favorable choice.
Some companies opt for both strategies. Such diversification gives them greater operational security, reach and flexibility to adapt to prevailing conditions.
Expansion into foreign markets requires a strategic approach from business owners - assessing strengths, weaknesses, opportunities and risks. SEO activities are part of the action plan. It is not worth neglecting them, because the "stakes in this game" are recognition and conversion, and ultimately company profit.
Do you need support? Contact us - we help and advise you on positioning and promoting your brand abroad. Take advantage of our knowledge and experience.
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