Internationalization of E-Commerce: With these steps, you can internationalize your online shop

1. Potentials of internationalization in e-commerce.
2. Challenges in the internationalization of online shops
3. 8 helpful tips for internationalization in e-commerce
4. Companies' internationalization strategies
5. Cross-Border E-Commerce vs. International E-Commerce
6. The phases of an e-commerce internationalization
7. The typical mistakes in the internationalization of companies
8. Suitable shop systems for internationalization
9. Fazit

By internationalizing their own online shop, companies intend to drive their growth and appeal to an expanded customer base in new foreign markets. Internationalization is a daring step for both small, large and medium-sized companies, which must be well planned and lived in every fiber of the company.

According to the DHL e-commerce statistics (2021), through internationalization of e-commerce, 15% more sales can be achieved in the first year and growth can be twice as fast as in national trade. Particularly in countries with smaller domestic markets, such as in Europe, there is a greater urge to expand into new markets.

Knowing the challenges and risks that entering international trade brings with it means security and risk minimization. What these risks are, where the potentials of internationalization in e-commerce lie, which shop systems are suitable for internationalization in e-commerce andwhat you absolutely must pay attention to in the step-by-step implementation, you will learn in this article by guest author Michael Auger.

Potentials of internationalization in e-commerce.

Internationalization in e-commerce is a forward-looking measure and a big step towards growth for many companies.

Tapping into new sales markets and new potential customers obviously works most effectively when you have a completely new market in front of you.

For customers, cross-border shopping offers a larger selection of products as well as a variety of special offers or limited products. Customers in other countries approach online shopping with completely different wishes and expectations. As a result, new offers can be developed and new potentials can be found exactly where demand in the home market is stagnating.

Internationalization in e-commerce offers prospects for a growing customer base with new sales potentials as well as increasing corporate growth and higher sales. In addition, it partially liberates itself from dependence on the domestic market or provides new growth potentials if it is already exhausted. In the event of a local or economic crisis in the country of the local sales market, not the entire basis of the company collapses.

Challenges in the internationalization of online shops

In the internationalization of an online shop, some hurdles are before. It is essential to have an overview and be prepared for everything.

Although internationalization is "only" an expansion of the sales market, its scope should not be underestimated, as numerous aspects must be considered. For example, customers should be relieved as much as possible of the fear of high shipping costs and possible problems with exchange or delivery in order to be able to fully utilize their purchasing power. Furthermore, the culture and language of the target country, the required logistical conditions and the legal situation are of enormous importance:

Culture and language

The linguistic and cultural difference in different countries not only means that the page of the online shop must be professionally translated - this alone already makes a big cost point and the avoidance of linguistic errors ensures greater seriousness and professionalism.

But customers in other countries also bring with them other expectations and wishes that should be addressed both on the website and in customer service. Thus, personnel resources are also required who are familiar with the language and culture of the customers and the company. In addition, employees should be sensitized who have points of contact with the culture of the target country in their everyday work.

Logistics

The infrastructural networks in the target country in the areas of logistics, transport and service providers determine the scope of the organization and planning of the entire logistics and the services that you can offer. Depending on the existing infrastructure of the respective export country, a new and own logistics must be built up and invested in.

It is recommended to rely on fulfillment service providers who take over tasks such as logistics in the target country, customer service and return management. But also storage, commissioning and shipping usually include their offer spectrum. It is necessary that a smooth eFulfillment is guaranteed. This includes not only the use of suitable software but also a consistent data concept and the appropriate interfaces. If you consider these factors, you can save yourself large investments in the target country in the first step.

Legal situation

Another significant challenge is knowledge of the legal situation that is relevant for your online shop. Only with a legally compliant online shop can you avoid penalties and successfully master the internationalization process. Especially in countries outside the EU, the legal deviations compared to German law can be considerable.

You should also be informed in advance about topics such as the tax law of the target country, costs and delays with customs. An overview of the distribution of responsibilities of different authorities also helps to avoid legal missteps.

8 helpful tips for internationalization in e-commerce

Since internationalization in e-commerce is not a simple undertaking, you should be aware of the most important steps in advance. We have prepared 8 tips for you:

1. Choose the target countries in advance!
Choosing the right target country with care and conducting an intensive analysis in advance can make the internationalization process much easier. Firstly, it is of course recommended to expand within the DACH region, as the language barrier largely disappears here and thus at least numerous elements of the online shop can be adopted.

2. Show consideration for the culture of the target group.
From mentality to linguistic customs in the target country - the better you know your target group, the better you can respond to them. Decisive factors are also a comprehensive customer service in the respective language and marketing that is adapted to the culture of the target market.

3. Pay attention to compliance with legal requirements.
Legal requirements vary in each country, for example in relation to tax issues. By precisely adhering to all legal requirements, not only penalties can be avoided, but a basis of trust can be created with the customers and a serious appearance. Transparent transport routes and open statement of the general terms and conditions appear trustworthy.

4. Analyze the market and your competition precisely.
Through an analysis of the market and the offers and marketing strategies of competitors, you get to know the market. This way you get insightful information about the purchasing behavior of the customers in the target country and make it easier, among other things, to choose the most common payment methods, which is an important point for most buyers.

5. Plan the logistical implementation down to the last detail.
An own logistic branch in place guarantees shortened delivery times and cheap or completely omitted shipping costs as well as cheaper returns for the customers. Also, a cooperation with a shipping service provider in place simplifies the delivery process. The outsourcing of logistics is worthwhile in most cases only from a high shipping volume.

6. Choose the right software solution for your needs.
The choice of the right software for your needs is essential for the success of your internationalization process. A suitable ERP system can also help in planning and providing support for the changes that arise in the areas of technologies and IT infrastructure. A well-established hosting provider is also important to guarantee the functionality of the shop from the start.

⁠When making the decision for the right software solutions, you can turn to consultants who will provide you with comparative information about the various offers and approaches. In the paragraph Suitable shop systems for internationalization we have compiled some of the best E-commerce platforms and shop system solutions for you.

7. Focus on international marketing.
The right marketing is essential to reach a customer base in the target country and draw attention to yourself. International marketing includes among others Content marketing with adjusted tonality and designs as well as SEO measures and SEA campaigns tailored to the target market. Through usability tests, it can also be determined to what extent you need to adapt your shop visually and in operation to the expectations of the customers.

8. Work with professionals.
Professional support is worth its weight in gold. Experts who are familiar with the culture, language and customs of the target country can help to perfect communication, translations and co-operations and also point out important legal differences. Technical expertise, for example in dealing with the shop system of your choice, should by no means be underestimated. Here, for example, cooperation with an agency is advisable, as there experts from various fields work together to perfect internationalization projects.

Companies' internationalization strategies

Internationalization strategies, i.e. international market entry strategies, can vary greatly. These strategies are highly individual depending on the product, target, company size and demand in the target market and are influenced by many other components.

Export: Here a distinction is made between indirect export (taken over by an domestically based exporter or an importer from abroad) and direct export (independent delivery). A own location is not necessarily represented in the target market, but the products or services are offered in the target market.

Licensing and franchising: The licenses for manufacturing and distribution of certain trademark-protected products or even the implementation of an entire business concept are passed on to a license-taking independent company. In franchising, the conception of the marketing concept largely remains with the originating company, the implementation is taken over for a franchise fee.

Cooperation or strategic alliance:
There is a cooperation with partners from the target country, although of course a certain dependency exists. A strategic alliance is characterized by its longevity and visionary cooperation.

Joint Venture:
A third company is founded jointly with a local company in the target country. This joint company is independent of the other two.

Branch:
A branch is a business establishment of a company that functions as part of the company abroad.

Subsidiary:
A new company is founded abroad, which is controlled by the parent company, but is legally independent.

Cross-Border E-Commerce vs. International E-Commerce

One way to implement internationalization in e-commerce is to first approach internationalization via Cross-Border E-Commerce. Of course, the question arises whether to start in small steps, or directly with a whole Internationalization, which from the start requires much more interaction in the target country itself.

What is Cross-Border E-Commerce?
Cross-Border E-Commerce describes the online trade of goods or services across national borders. A branch in the target country is not required for this. The purchase process can take place B2B or B2C.

Should you start with Cross-Border E-Commerce or comprehensive Internationalization?

• Cross-Border E-Commerce is particularly attractive in the EU member states, as in this area mostly no customs duties are incurred for companies that expand their goods distribution to the international market. (Exceptions exist for goods such as coffee, alcohol or tobacco, which are subject to additional costs).
• Also the problem of currency differences is negated in most countries within the EU.
• In general, companies within the EU are supported in the form of uniform framework conditions for the sale of goods across EU borders.
• Likewise, the cultural proximity of countries within the EU facilitates trade in this area.

Whether steps of a larger set internationalization are taken depends entirely on the company, the product and the goals of the project:

• On the one hand, it may be advisable for companies in the DACH region and the EU to first offer their goods via Cross-Border E-Commerce. As soon as the demand and thus the export volume has increased strongly, work can be done on a deeper internationalization.
• On the other hand, some products require shorter delivery routes or are too large and bulky to be transported from one country to another every time, which is why own logistics locations often make more sense here.

The phases of an e-commerce internationalization

The most important thing in e-commerce internationalization is a well-thought-out conception and implementation that is gradual and careful. Understanding all the external factors that influence your shop and its success is the challenge that comes first.

1. Choice of target market.
   The choice of the right target market determines the entire further course of the project. This choice should be well thought out and determined based on the factors already mentioned in this post.
2. Preparation.
   The preparatory work, which must be primarily done in the field of marketing, refers to the development of markets and local user behavior. The price and assortment ideas should be defined in this step and open legal questions clarified.
3. Choice of software.
   In this step the choice of suitable software and the preparation of the technical infrastructure takes place. In order to develop an internationalization-capable online shop, you should consider a few things when choosing the right software. For this, you should calculate beforehand which features you need and what scope your shop should have. Even here you can always rely on professional advice.
4. Define goals clearly.
   In the next step, the goals and business models can be defined. Agile project implementations are usually the most future-proof and flexible solution and offer more room for possible incidents or changes in approach.
5. Define the sales model.
   No matter whether an indirect or a direct solution for distribution is chosen, the most important thing is that all roles and tasks in this area are distributed logically and adhered to.
6. Choice of logistics form.
   Here a decision must be made between building up one's own structure and collaborating with a local partner.
7. Coordinate and optimize processes.
   Clear roles and responsibilities and the definition of how certain processes must run shorten processes significantly and prevent misunderstandings.

If work is done using an agile approach and the project phase is divided into different rollouts, serious mistakes can be avoided and successes can be achieved in small steps.

The typical mistakes in the internationalization of companies

Anyone who aims for an expansion should be prepared for the following obstacles in order to be ultimately successful on the road to internationalization.

Insufficient planning and strategy:
The commitment, primarily from the management, must always be at 100% when it comes to internationalization. In addition, one should not hold on too much to old, proven sales and marketing strategies in the home market. The openness for new things and an eye for local conditions are important here.

Insufficient personnel selection:
The personnel should be chosen carefully and based on (inter-)cultural abilities. An understanding of both cultures is necessary, primarily in the field of customer advice. At least one employee in a management position should invest full attention in the project. Lack of personnel resources lead to employees being overloaded and the whole project threatens to fail.

Ignoring customer wishes:
The preferences of customers can differ greatly in the target country from those in the home country. This starts with the mere demand for certain products, goes over the preferred communication channels and used media to the favored payment methods.

The wrong timing:
The timing of the market entry can be decisive for the project success.
If the expansion takes place too early, the company may not yet be ready and the project fails. Indications of an internationalization step being too soon are for example insufficiently trained personnel, not sufficiently predictable demand and target group analysis on the target market, not yet completed software adjustments or an uncertain logistic situation.

If an expansion occurs too late, the foreign market may already be saturated for some product groups and the international roll-out can only be realized with a high marketing budget.

Too low budget:
An internationalization process can bring high investments. Before a new market entry can be carried out, strict calculation and forward-thinking must be done to cover all eventualities. Currency fees, for example, which arise from different currencies and associated exchange rate and transfer fees, must be planned.

Cultural misunderstandings:
The communication strategies, taboos and cultural rules in a country must absolutely be taken into account and respected in order to prevent misunderstandings, for example in personal contact or in marketing.

Choice of an unsuitable shop system: ⁠The choice of the right software for the needs of your internationalization process is essential for the success of the venture. There are numerous shop systems on the market that are less suitable for expansion into further target markets and could therefore be responsible for the failure of a market entry.

Suitable shop systems for internationalization

The choice of the right shop system is essential to be able to successfully implement internationalization. Therefore, some points should be considered here. If you are unsure, you can rely on cooperation with experts, for example with an agency that supports or takes over consultation, technical implementation and maintenance of online shops. 

Requirements for a suitable shop system for internationalization:

• Multistore: Central installation and management of a complex infrastructure of different country shops. This also replaces hosting in the target country, as the country-specific shops run on the same server.
• Headless Commerce: The headless approach is indispensable for many e-commerce companies. Backend and frontend are decoupled here and can be further developed independently of each other. Growth-strong online and omnichannel retailers thus benefit from a maximally flexible system that allows quick adjustments and thus allows a high level of speed, performance and scalability.
• Multitenancy: Enables multiple independent shop and company data management to create your own subshops with specific prices, assortments etc. for different countries.
• Standard display: The standard presentation of specifics of the individual countries (currency, language and special characters, weight and length measures …) as well as automatic processing of specifics like VAT rates, duties etc. must be made possible.
• Powerful PIM system (Product Information Management System): Central control and management of product relevant data. Should enable to display article data in different formats and language versions.
• Customer-Relationship-Management system (CRM): Takes over the assignment of customer language.
• Warehouse management system (WMS): Should be uniform and reliably report the stock and delivery times.
• Language versions: Some e-commerce platforms target international user and offer several language versions. With the hreflang tag, online shop operators assign the right URL depending on the country, region and language and thus enable users from a certain country to only get the pages relevant to them displayed in the search results.

Examples of recommended shop systems for managing country shops:

Shopware

Shopware offers optimal conditions for the internationalization of an online shop. The deciding factor for this is the possibility to operate several channels simultaneously. In addition to a multi-language offer, the shop system contains the possibility to create unlimited sales channels and operate different marketplaces. Also, different currencies and payment methods are supported. At the same time, there is always the possibility to expand your own shop, which makes the entire system very flexible and adaptable to changes and growth. Due to the high scalability and the wide range of features, individual solutions can be found for many different requirements.

Spryker

Spryker offers e-commerce operators the technological basis for online shops that are aimed at internationalization: Different stores with different currencies per shop and international tax rates can be easily created. Alternatively, there is also the possibility to create a single store with different regional and language selection and locally adapted products. It provides the possibility to provide a glossary which makes the use easier for the customers.

Even other platforms like Shopify etc.Shopify Plus also offer various possibility to create an online shop with the option of internationalization.Magento Open SourceConclusionJTLInternationalization in e-commerce is a significant step in terms of a company's growth. However, this project brings with it some risks, which require certain preparations and precautions.commercetoolsThrough a well-prepared approach and knowledge of the respective market environment, mistakes can be avoided and a first-class customer experience can be achieved. Already with the initial choice of the shop system, one can set the groundwork for a later following internationalization in e-commerce. This way, you are prepared for all eventualities from the start and can react flexibly to all country-specific conditions at any time. If you pay attention to the respective challenges and stumbling blocks, there is immense potential in the internationalization of your online shop.ePages bieten verschiedene Möglichkeit einen Onlineshop mit der Möglichkeit zur Internationalisierung zu erstellen.

Fazit

Eine Internationalisierung im E-Commerce ist ein bedeutsamer Schritt in Bezug auf das Wachstum eines Unternehmens. Allerdings bringt dieses Projekt einige Risiken mit sich, die gewisse Vorbereitungen und Vorsichtsmaßnahmen erfordern.

Durch eine gut vorbereitete Herangehensweise und die Kenntnis des jeweiligen Marktumfelds können Fehler vermieden und eine erstklassige Customer Experience erzielt werden. Bereits bei der initialen Wahl des Shopsystems kann man die Grundpfeiler für eine später folgende Internationalisierung im E-Commerce setzen. So seid Ihr von Anfang an auf alle Eventualitäten vorbereitet und könnt auf sämtliche länderspezifischen Gegebenheiten flexibel reagieren. Beachtet Ihr also die jeweiligen Herausforderungen und Stolpersteine, steckt ein immenses Potenzial in der Internationalisierung Eures Onlineshops.