Mothercare's head of international eCommerce, Olga Nazarkova, answers the questions of International Women in Business founder, Sarah Pavlou, on expanding internationally through eCommerce.

Global franchising for some companies is a long-established process and for others something very new. How important is it when looking to go global to build in an eCommerce model into one’s plans?

The online channel is becoming increasingly important for every retailer in every business. It is becoming a global phenomenon. To assess the opportunity, one of the ways is to look at share of online in percentage and value terms in total retail value of each individual market together with infrastructure available. The UK, the US, key EU markets and South Korea are at the top as highly developed and skilled in all areas of e-commerce. Russia, China, Brazil and India are still at early stages of development. Having said that, China overtook the US in size of its online market last year. Who might have thought that this would happen so quickly? Emerging markets will soon count for 60% of global online sales growth so it is important to have a strategy that enables retailers to capture this opportunity.

The key to success apart from having a strong business model that travels well internationally is to ensure you are prepared from an investment perspective and realise that no one size fits all when it comes to running eCommerce outside of your home market. Retailers have to seriously consider localization of their proposition in every country. Best customer experience comes when you can meet their local expectations as well as exceed them by bringing global expertise of running online operations with excellence. In the UK we are very advanced in this area and therefore have a lot to offer to many emerging markets. We are essentially ahead of the game in a very big way. However, in the next five years we will loose this advantage and will have to compete with serious online and multichannel players whereas often now this arena is almost ‘free’ to grab. It, of course, comes with some downsides of first mover advantage such as undeveloped logistics infrastructure, higher marketing budget to educate and attract customers and so forth. Yet, if a retailer has already stores in a particular market then focusing on digitalising stores and introducing click and collect, for example, will help grow their  online business in a more profitable way.

When it comes to franchising, many international franchisees are happy to be guided in the areas of eCommerce and recognise they require support. However, there are those that are aware of the online market opportunity but local trading conditions or customer shopping habits make them feel not ready to invest in this area yet. For example, Middle East has enormous potential when assessing the online opportunity but shopping in a physical not virtual mall is still a big part of Middle Eastern family social life and cannot be simply replaced with online shopping. What do you do then? How about going big on mobile, social media, bringing customers to stores for reserve & collect, for example? Strategy is required now; waiting game can cost you more in the future.

In your experience to date, what are the essential skills required for any business looking to establish an eCommerce model on a global scale?

There are many things to consider. Firstly, it is important to look at what you have and what you can do with what you have. This applies equally to a scenario when retailers want to develop international eCommerce centrally out of their home market and a scenario where a franchisor gives franchisee rights to conduct eCommerce business in their local market.

However, using what you already have is not going to take you very far.  It may give you a good basis to start opening your website for international shipments as a starting point. You can see where international traffic is coming from, how international customer behavior on your website differs from your home market customer. One can then prioritise markets and start addressing some basic localisations such as customer service available in local language, local currency, local taxes, returns to local address or ideally in local stores etc. Some of this is achievable with existing resource in an eCommerce team.

When it comes to scaling or going after big market potential, dedicated resource is an absolute must. Often, retailers go for having a local team in the market that has a direct or dotted line to the central team acting as centre of excellence. This is where big challenge comes your way, as local resource is often hard to find and retain. Language and lack of face-to-face time also means that one needs to look for certain types of personalities in the local markets.

When franchising an online channel, the role of the central eCommerce team in the home market is rather consultative than operational. It needs to ensure that franchisees have all the necessary available for them from the centre to operate an online channel locally and best practice is shared across all markets.

Many international (franchise) partners do not fully understand the online business other than from a consumer’s perspective. They often need help in initial set up hence the franchisor may think of having an ‘Alpha team’ to support the franchisee in the initial stages of online channel development. This team can consist of a mix of central ecommerce specialists and other business specialists like fulfillment or customer service, for instance.

Once structure is established it is key to share international eCommerce knowledge at all levels within the organisation and ensure this information is used appropriately to maximise the opportunity in other areas of the business. It can be a two-way road as well; often franchisees come up with very entrepreneurial ideas for online that are easy to implement in your home market.

The hardest part of building right capabilities in international eCommerce is enabling multi/omnichannel shopping or simply integrating your online presence into the stores. It is vital that the retailers and the online experts merge creating synergy and outstanding teamwork. This is a big challenge but an essential factor for successful growth.

How important is cultural awareness in the world of eCommerce?

Absolutely necessary! I am a big fan of going global, locally. Of course, there is no right answer to this question and different retailers choose to be more or less culturally aware when it comes to international ecommerce. However, I believe it is important for retailers to listen to their franchise partners on the ground. One would not put an explicit feminine image in their store windows in the Middle East or chose the wrong color for Chinese New Year POS materials. This applies in ecommerce as well with a big BUT… if you get it wrong online your brand reputation will suffer most through fast spread of news in social media. It is another important question to ask yourself: How are we going to manage social media crisis in a country where we don’t fully understand cultural nuances

Another example on importance of cultural awareness is when we, in the Western World, are often used to web stores being simple and straight forward in design. Yet in China the market respond incredibly well to lengthy web pages with numerous photographs and options for downloading instructions, extra model images, buying guides, instant messaging etc. The shopping experience in China assumes full social experience with multiple blogs, forums, chats on the pages of your web store: may look chaotic to some parts of the world but a huge success in China. The key is to find a balance.

Other trivial examples of questions you may face doing international eCommerce:

  • Do you need a Chinese name of your brand to be used in your local domain name? Should you use local or global domain name?
  • Is having eight images per product too much in China? How about in Indonesia?
  • Is anyone going to buy online in Russia if I open a web site with online payment only and no cash on delivery?
  • Will my usual polybags for packaging do a good job in conditions of China?

The answer is mostly ‘No’ but you may only know this if you listen to your franchisees, engage them in managing online channel and leaving local things to be conducted locally.

Nazarkova will be taking part in the panel discussion ‘Going Global Online - International eCommerce & Social Media Marketing’ at 16:15 at RBTE on March 11th. The session, run in association with International Women in Business, will provide a complete guide to building and marketing your brand out online, with a detailed interview with the digital media experts and the retailers already doing it. Check out the full programme.

http://www.iwib.org/en/international-women-in-business