E-commerce systems are a fundamental building block for modern businesses: simply put, they enable organizations to sell products and services globally. This capability can translate to nonlinear improvement in company growth, market share, and enterprise value. The path to successful global e-commerce implementation, however, is not as straightforward. It is fraught with complexities ranging from currency and language issues to compliance with diverse tax regulations. This research note outlines the major complexities associated with global and cross-border e-commerce and explores strategic e-commerce options that can help solve them. This note answers questions like:

  • What are the opportunities and risks in taking e-commerce global?
  • What are the strategic and technological  approaches to taking e-commerce global?
  • Can the major e-commerce platforms (Amazon, Shopify, et al) take your business global?
  • What is the most effective way to globalize a sophisticated, multi-channel sales model (e.g., direct, online, and resellers)?
  • What are the financial, business, and brand opportunities and challenges of using a Merchant of Record (MoR) solution?

 

The Landscape of E-Commerce

The fairytale dream of e-commerce sounds something like this: an entrepreneur opens a small online store, it grows over time, and eventually, as more and more customers find them through search, the business grows all over the globe, making its owners happy and wealthy.

Getting to this idealized outcome has not been straightforward. Businesses that are aiming for international expansion of their e-commerce capability are well served to gain an understanding of a broad spectrum of challenges associated with global e-commerce. Even relatively simple businesses using established e-commerce platforms like Amazon and Shopify, are often quickly overwhelmed by the associated layers of complexity with rising product, pricing and channel complexity.

Building a robust global e-commerce capability requires that organizations address Six Local Challenges of Global e-Commerce:

  • Local Content
  • Local Currency
  • Local Payment Methods
  • Local Tax Management and Compliance
  • Local Fulfillment and Logistics
  • Local Engagement

 

To address the Six Local Challenges of Global E-Commerce, a business must be able to build a strategy for global e-commerce while balancing three key variables: time-to-market, customer experience, and brand control.

Depending on the balance organizations decide to strike between those three variables, there are several primary strategies for tackling the local challenges of global e-commerce:

  • Marketplaces (e.g., Amazon, eBay)
  • Marketplace Platforms (e.g., Mirakl, SAP Hybris)
  • Building a Custom Site or sites aimed at each global market
  • Hosted Store Infrastructure (e.g., Shopify, WooCommerce)
  • Partnering with a “Merchant of Record” or “MoR” – an organization that virtualizes some of the local complexities of payment, tax and compliance, and in some cases, fulfillment and local support

 

Get the report to read more about the complexities associated with global and cross-border e-commerce, the strategic options companies can use to overcome these hurdles, and practical advice for B2B and B2C businesses looking to grow their international sales.