One of the great benefits of ecommerce is that merchants are not restricted to national borders in their trading. Yet trading globally is not without its pitfalls, and a little bit of knowledge and foresight can help merchants make the most of global expansion. Here we present some of the top factors to consider when expanding internationally.
1. Accepting foreign cards
Merchants that trade online are well aware of the two main credit card networks: Mastercard and Visa. In general, any payment provider which accepts a card from either network will accept cards from anywhere in the world. It is worth checking, however, that your payment provider does not put in place arbitrary restrictions on cards from foreign countries.
More importantly, there is no need to block buyers with foreign purchase addresses by requiring US or Canadian address details. Also, merchants should consider implementing payment gateways which support lesser-known but still widely used card networks such as JCB (a Japanese network) and UnionPay (widely used in China and Hong Kong). Accepting these payment methods means you won’t be excluding customers without a Visa or Mastercard, while providing a valuable element of localization.
2. Get fraud prevention right
Fraud does not manifest in the same manner across markets. Every location has different characteristics from a fraud viewpoint and a merchant cannot evaluate transactions from a range of countries by the same criteria. Doing so risks producing a costly mix of false positives where transactions are declined when they should be approved, while at the same time fraudulent transactions are wrongly waived through.
Case in point: AVS (address verification system) matching is commonly checked with domestic transactions but is problematic with international transactions since outside of the US, Canada and the United Kingdom, the AVS system is not in use. So, merchants cannot put too much weight on an AVS mismatch or an AVS which shows up as “N/A”. The best way for merchants to deal with fraud from abroad is to implement sophisticated e-commerce fraud protection which employs technology such as machine learning that is capable of carefully vetting transactions.
3. Focus on holiday sales
North American markets are well versed in seasonal sales such as Black Friday and Christmas. For merchants, these are bumper days in the e-commerce year where some of the biggest trading takes place. Foreign customers are becoming aware of the deals available from merchants during these seasons, and retailers in the US and other Western markets expect to see solid demand from foreign customers. So, market your season sales to foreign customers too even if the particular holiday or sales event is not a local phenomenon.
On the flipside, familiarity with foreign holiday periods can prove helpful in creating new marketing avenues. One example would be Singles Day in China, which is enormously popular in the country – reaching $25bn in sales in 2017, four times more than Black Friday in the US. In another example, many Eastern European countries including Russia do not exchange gifts on Christmas day, but on January 1st, a celebration by the name of Novy God.
4. Mobile is growing, grab the market
Another avenue for global expansion is the mobile market. Technology generally achieves market penetration at different rates around the world, and this is the case for smartphones too. As a result, while some mobile shopping markets have developed extensively, some countries are still in earlier stages of development. A merchant who can step into a market at this stage stands to win customers at the cost of the later entrants.
The sheer size of some mobile markets are also a factor, with China alone presenting a market of over a billion smartphones, with almost 90% of Chinese consumers reporting that they have made purchases using their mobile phone. Clearly, adapting your website to be mobile friendly is crucial to not lose out in the push for these new markets. It is also worth considering a localized, market-specific app for some regions as this is often a very convenient way for mobile phone users to shop.
5. Expand with care
Merchants should take away from this that the opportunities in global markets are broad and wide. Aside from merely growing your business, global expansion also helps merchants to hedge against local economic contractions while providing a positive influence on the design and development of future products. Global expansion needs to be done with care, however and paying attention to a range of factors including local market preferences while employing deep, sophisticated fraud prevention solutions will help merchants make the best of the international market.