Step-by-Step Guide to Exporting – Step 10 – Selling online: e-commerce for exporters
Table of Contents
- Step 10 – Selling online: E-commerce for exporters
- 10.1 Understanding e-commerce
- 10.2 E-exporting: using the Internet to export
- 10.3 Applications and benefits
- 10.4 Assessing your e-commerce potential
- 10.5 Localization
- 10.6 Technical side of e-commerce
- 10.7 Finding e-leads
- 10.8 Checking e-leads
- 10.9 E-payments
- 10.10 Supporting your online customers
- 10.11 Social media networks
10.1 Understanding e-commerce
E-commerce (also known as digital commerce) refers to the act of selling and buying via the Internet. This definition includes transactions in which not all of the activity takes place online. A website may play a role in informing a buyer about a product or offer for which the purchase takes place offline. That is a common model that is not typically captured in e-commerce statistics. Similarly, a goods producer or wholesaler may depend on distributors or retailers in other countries to sell goods to customers using their own e-commerce channels.
E-commerce is virtually an essential approach for both large and small businesses now that almost all products and services are online. Having a strong e-commerce presence can increase efficiency and productivity, while lowering costs. Indeed, if you haven’t already moved at least some of your business operations to an online model, you could face major threats from those competitors who are already doing so.
The following section assumes that your business is already a potential exporter of goods or services through the Internet.
If you don't have a Web presence, now is the time to build one. International business assumes an online presence now. The Canada Business Network has resources to help you learn how to develop your website and sell online. Refer to BDC’s web design and consulting services to help you prepare to take your business online.
Why sell online?
Opportunities for online sales are huge and growing. By selling online, Canadian companies can:
- find new customers in overseas markets
- conduct business 24/7
- build brand awareness
- access new markets in a low-cost manner
- monitor real-time sales to understand what customers are searching for
The role of e-commerce in the global retail landscape cannot be understated. Global brick-and-mortar retail sales experienced a decline between 2012 and 2017, while e-commerce more than doubled to reach over US$1.3 trillion in 2017.
The United States is a key driver behind the rise of global e-commerce, with total e-commerce sales in the U.S. exceeding US$360 billion in 2017, second only to China. Find useful information, tips and resources about entering the US e-commerce market in the TCS’ E-Commerce Guide to the United States.
10.2 E-exporting: using the Internet to export
By definition, exporting is the practice of sending or transporting goods or services to a foreign country for trade or sale. In comparison, e-exporting is the practice of receiving and processing orders online from customers located in foreign countries. The Internet offers some digital advantages over traditional exporting approaches. Not only can you reach a large number of potential customers from around the globe without needing to establish a physical presence in other countries, but you can also:
- Customize your product or service offerings based on the customer’s location by offering special links on your website for different markets (e.g. provide information in the language and currency of the target market).
- Offer electronic customer support through a list of frequently asked questions (FAQ) on your website or through email assistance, rather than by operating a costly and time consuming toll-free number.
- Highlight the features and benefits of your products or services using pictures, descriptions, technical details, pricing, shipping and return policies, as well as include customer testimonials and video demonstrations.
- Promote your company and build your brand with potential customers by telling them more about your company's history, staff, location, partners and so on.
- Facilitate communication with international customers through email. Respond to questions instantly, notify your customers of their product shipment status and send them the latest news or information on special offerings.
There are seven principal steps when you are considering e-exporting:
- Evaluate your e-export potential. Before spending a great deal of time, effort and money on e-exporting, take some time to reflect on your current operations and product offerings. This assessment phase will help you avoid headaches later and will educate you on what you need to do to get ready to e-export (refer to section 10.4).
- Develop an e-export plan. If you are being proactive and thinking about actively marketing your products in foreign markets, an export plan is a definite must. An e-export plan will help you to tackle the digital aspects of commerce.
- Modify your products for foreign markets. Before entering a foreign market, you need to be sure your products are suitable in their current form. You need to consider both the tastes and preferences in your foreign markets, as well as the specific foreign regulations that apply to your products. Note that these will vary by country, so you may have to limit the foreign markets where you sell or intend to sell your products.
- Research the legal issues related to e-exporting. As with most business transactions, informing yourself about the laws and regulations that govern e-exporting transactions is critical. Consult a lawyer specializing in international law to make sure you are in compliance with the various domestic and foreign regulations.
- Leverage your website to sell abroad. The Internet represents a critical sales tool for SMEs with limited resources. Consider developing a multilingual website, one that offers content in more than one language. This will be necessary if you are aiming to reach customers in multiple countries where different languages are used.
- Ship your products. Once you have made a sale, you need to get your products to your customer. The international shipping process can be complicated at best. To ease the burden of shipping products abroad, you can call upon the assistance of freight forwarders, customs brokers and fulfillment houses.
- Get paid. Arranging for online payment before the goods are shipped will help you to avoid having to collect payment after the goods have been shipped. Online payment options include third-party credit card processing companies, online fund transfer services and prepaid credit services, all of which allow payments and money transfers to be made through the Internet. The services these companies offer are not available in all countries.
The seven steps are described in more detail in the Ontario government’s e-Business Toolkit.
10.3 Applications and benefits
E-commerce has many applications, including sales, customer relations, finance, market research, market intelligence and procurement. Some of the benefits these applications can bring to exporters are:
- reduction of the time needed to deliver and update information about products or services
- flexibility and adaptability of online marketing and advertising
- customer access to your products or services 24 hours a day, 365 days of the year
- faster responses to customers' needs
- more efficient ordering and order processing
- easier access to intelligence about export essentials such as demographics, market characteristics and competitors
- electronic rather than physical delivery of certain products and services
- access to world markets and, therefore, more export opportunities
Of course, you'll still have to deal with the traditional side of exporting—shipping, customs regulations and work permits—just as you would if you were doing business without the Internet. From this angle, e-business hasn't changed exporting all that much. What it has done is make all kinds of export-related communications and connections much easier.
For more information, check out e-Commerce: what to consider when selling online.
10.4 Assessing your potential
If you're going to succeed in e-commerce, you have to start with a clear-sighted evaluation of your company's potential for online business. Ask yourself the following questions:
- IT resources: How sophisticated is your Web presence? How much experience do you have in managing IT projects? Are you aware of new technology and how you can use it?
- Management: Your e-business strategy needs to be developed in the context of your overall corporate objectives. Do you know what parts of your business should be put online? Is senior management committed to going in this direction?
- Personnel: Do your employees understand your e-business strategy? Have you asked for their input? Do you have a plan for training them in the new skills they might need?
- Customers: Do you use online resources to track competitive trends and identify potential new business? Does your e-business strategy address the security and privacy concerns of your customers? Is your website customer-friendly?
- Competition: Are you aware of your competitors’ e-commerce initiatives and how they could affect your competitiveness?
- Suppliers: Do you know if you can reduce procurement costs by purchasing online? Do you use the Internet to look for suppliers? Have you used supplier input to help plan your e-business strategy?
- Profitability: Have you done cost-benefit analyses for your e-business strategy? Do you know how long it will take to amortize the start-up costs?
At the end of the diagnostic, you'll have a detailed analysis of how ready you are to adopt an e-business strategy. You’ll ill also identify ways to improve your competitiveness in this venture.
Are you ready for e-commerce?
If you are thinking about making e-commerce a bigger part of your daily operations, you should first determine if your company is ready for e-commerce and the return on investment. If the picture looks good, you can follow-up with a plan. The Canada Business Network can help you further develop your plan.
To discover how to grow your sales abroad through e-commerce, download BDC’s free e-book, Succeed with e-commerce.
Adapting your website to suit your target market is called localization.
At least part of an exporter's website has to present information in the native language of the target market. Completely translating a website can be expensive, so you may prefer to begin by having professional translators localize only the most important pages.
Other suitability issues relative to localization to consider are branding, currency denomination and payment methods. Branding that reflects the market's customs, laws and traditions, as well as language, will make a potential buyer feel more at home. Using local currency for pricing, shipping and tax calculations will do the same and will allow customers to compare prices more easily. Also related to this is the ability to accept payment in local or U.S. funds and to do so efficiently and simply and securely.
As international search engine optimization (SEO) requirements present additional challenges to traditional SEO, a targeted domain name and hosting strategy could help ensure your site will be easily found by your international customers. Refer to the Canada Business Network for more insight on SEO and how to increase web traffic to your site.
10.6 Technical side of e-commerce
Trying to set up your own online presence using in-house resources is usually not a good idea, unless your business is quite small and you have access to some very adept IT people. As a rule, you'll get much better results if you outsource the creation of your Web presence to a service provider specializing in website development.
10.7 Finding e-leads
The Internet is a fruitful source of electronic business leads from around the world, usually called e-leads. There are several ways to track down such virtual opportunities in international e-marketplaces. For example, Canadian retailers and their brands can reach consumers overseas through e-marketplaces, which are online locations that provide a platform for retailers of all sizes to conduct business through e-commerce.
More than 400 e-marketplaces have been identified worldwide such as Amazon.com or Alibaba.com. In China alone, major established e-marketplaces include Tmall, Jumeii, ASOS China, JD.com, VIP.com, Kaola.com and Suning.com; each operates dedicated portals selling popular consumer products such as fashion, health food, skincare and cosmetics. The benefits of selling online through e-marketplaces are that you can reach new customers and build awareness for your brand to help your business to grow. You can also find out what consumers want and need through analyzing real-time sales data, to help you to make better-informed business decisions.
Cyber threats are always growing and evolving, once you have operations online your valuable customer, company and employee data may become vulnerable.
To learn about common cyber-attacks and prevention strategies see the Trade Commissioner Service’s (TCS) Spotlight on Cybersecurity.
10.8 Checking e-leads
The precautions you take in traditional exporting also apply to the world of e-business, including:
- Know who you're dealing with. Always verify addresses and if you can't identify a potential customer or the country in which an order originates, don't proceed with the deal. The TCS can help validate a potential customer with a bona fide check.
- Verify other characteristics of the potential customer's country. How good is its communications infrastructure? How stable are its financial systems? What level of political risk does it represent?
- Conduct market research. It is a key component of evaluating e-leads. The principles of market research are the same for e-business exporting as they are for traditional exporting.
- Monitor credit assessments. They are just as important in e-business.
As in all export operations, due diligence is an essential precondition of success.
Shipping and documentation
You can transmit documents electronically via the Internet, which is much faster than moving the information around on paper and can be just as secure. Internet tools and systems can also give you better control of your shipping logistics.
Arranging for online payment (before the goods are shipped) will help you to avoid having to collect payment after the goods have been shipped. Online payment options include third-party credit card processing companies, online fund transfer services and prepaid credit services, all of which allow payments and money transfers to be made through the Internet. The services these companies offer are not available in all countries. Canadian companies should be aware of different e-payment tools used in other countries.
An e-commerce exporter can, of course, be paid by any of the traditional methods. Retail customers, though, tend to pay by credit card. When a credit card payment is not possible or advisable, you might consider using the services of a company that, for a transaction fee, obtains the customer's electronic payment (e-payment) and then remits it to you. These specialized businesses often integrate their payment systems with services such as:
- creating online storefronts including catalogues, stock control and order processing
- providing fraud protection
- offering multilingual and multicurrency support
- issuing letters of credit
- providing online, real-time transaction processing
Profile of e-commerce in China
The rapid expansion of e-commerce in China has grabbed headlines around the world and reshaped the business landscape for both foreign and domestic firms. Already the world’s largest, China’s e-commerce market has grown by 50% per year since 2011 and is expected to be worth USD$1 trillion by 2019. More than half the population in China use Alipay to pay for online purchases.
For Canadian exporters, selling online in China can be as simple as shipping directly from Canada to the consumer, or via engaging one of several third-party service providers who can facilitate the entire logistical process, including customs, branding, marketing and payment. In what traditionally has been a difficult market for small Canadian companies to access, e-commerce provides a relatively straight-forward path to gaining a foothold in China. The Canada Pavilion on Alibaba’s online shopping site provides Canadian products and services with a platform to connect with Alibaba’s 400 million consumers.
For more information, the TCS at the Consulate General of Canada in Shanghai has prepared a guidebook, An Introduction to e-Commerce in China, to help Canadian companies begin to understand the Chinese e-commerce landscape.
10.10 Supporting your online customers
Support for your customers is crucial to ensuring repeat business. You can do this, of course, through traditional methods such as telephone, email, fax and the postal system. But a good e-business customer support system can give you an edge. The potential impact of social media—positive and negative—should also be considered, especially when dealing with tech-savvy customers.
Privacy is a major concern for potential online customers. You will need to convince them that any electronic transactions they make with you are secure and that their privacy and personal information will be protected. In this regard, Canada's Personal Information Protection and Electronic Documents Act sets the rules that a business must obey when it collects, uses or discloses personal information. The Privacy Commissioner of Canada provides more information.
There are several strategies that can help you reduce the risks you and your customers face when doing business online. Be aware of these risks and take steps to deal with them before they become problematic. For more information, refer to the Canada Business Network for insight on e-commerce security, privacy and legal requirements.
Customer success story
Canadian businesses AND TCS working together -This payroll software company was able to get entrenched in new markets faster than ever thanks to TCS’s Canadian Technology Accelerator.
It’s important to clearly define your return policies for online customers abroad to ensure customer satisfaction and avoid costly transactions.
To learn more about common e-commerce challenges and how your business can thrive online, read the Trade Commissioner Service’s (TCS) Spotlight on E-Commerce.
10.11 Social media networks
Social media is an effective business development tool. It is best used as an interactive platform for listening to and sharing information with members of an online community. Social media can also represent a cost-effective channel to directly reach out to, and engage with, thousands of potential consumers and enterprise customers. Remember to keep your posts social and conduct yourself appropriately, in compliance with the established practices of the community.
Resist the urge to push sales-related information only. Consumers will tune out and not follow your brand. Don’t sell first. Try to entertain, engage and/or educate your followers. The sales will follow in due course.
A common social media mistake made by many businesses is to rush out and create a Facebook page or Twitter feed before proper planning. The result can be wasted resources and poor results. A well-researched social media strategy is essential to your investment yielding a favourable return.
To start a strategy, you need to determine your target audience and its receptivity to using various social media platforms. Next, focus your initial social efforts on the platforms your target audience is most likely to use often. It is important to consider the most appropriate online platform:
- What is your demographic and where do they congregate, communicate and share information with business peers?
- Is the preferred media Facebook, LinkedIn or Twitter? Are there other or local social media platforms relevant to your target market (e.g. WeChat in China or XING in Germany)?
To be successful using social media, you must provide regular updates. Without them, you won’t build the kind of engagement with your followers that you’re looking for. Work out an informal schedule that specifies how often each of the platforms will be updated and by whom.
When it comes to content and messaging, potential customers are more likely to follow brands in social channels that offer them benefits (i.e. information, entertainment or discounts). Social media is about using interesting content to engage with both existing customers and potential customers, not about landing a big name client who “liked” your post or re-tweeted your message. It is important to first establish the relationship and be open to engagement. You can add value to your brand simply by being helpful and by engaging regularly in the conversation as a subject matter expert or influencer on topics related to your company’s product or service offerings.
Include infographics and pictures wherever possible to make your content more visually interesting. Share or re-tweet information from recognized authorities in your sector—such as individuals, associations, government organizations, reputable news sources—to help reinforce your message ensure all teams (IT, marketing, social media etc.) work together to keep links to your products/services and company are automatically updated.
Consider following LinkedIn and Twitter for updates from the TCS and watch for trade commissioners from across Canada and from your target markets.
For more information on how to make the most of social media networks, refer to BDC’s Social Media Guide for entrepreneurs.
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