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NRF 2016: Benefits of selling globally using online marketplaces

Essential eCommerce breaks down the top benefits and tips retailers should consider when embarking on cross-border eCommerce via marketplaces.

In the next couple of years, countries like the US and UK will only have a marginal percentage of the total number of online shoppers. Meanwhile, Tmall in China already represents over 50% of eCommerce in the region, while one third of B2C eCommerce in Japan is through the Rakuten platform.

The value of eCommerce is not local and it is unsurprising that retailers are trying to figure out how to sell into foreign markets – like Sainsbury's on Tmall – especially when selling into as many countries as possible which helps to negate the effect of any volatile markets.

Speaking at the NRF 2016 Big Show in New York City this week, Rakuten and eBay detailed the benefits of launching an international webiste via marketplaces.

1. Low start-up costs

Launching an eCommerce website in a different market can lead to very high start-up and customer acquisition costs, especially without the guarantee that the retailer will make a success in the new country.

But as Rakuten's VP of global eCommerce strategy, Ryan Miller, pointed out marketplaces can offer immediate customer reach as well as lower costs.

"The benefits of having your own site are obvious – you have more control over customisation and customer data, but on the flip side, you have extremely high start-up costs and huge customer acquisition costs," said Miller.

2. Customer trust

Forrester research indicated the majority of online global shoppers prefer buying from abroad if it is from a marketplace they recognise.

Miller explained that customers in new markets who have never heard of your brand would much rather discover it through a platform they are already familiar with. Additionally, retailers need to ensure their customer service is tailored to the local market.

"You need a local email, telephone number and customer support in a local language," explained Miller. "You also need to know what your return policy is going to be – for instance in Japan, the return rate is usually less than 1% so is much less of an issue."

3. Trading regulations

Jordan Sweetnam, VP of global seller experience at eBay, said marketplaces help retailers decipher the complexities around trading regulations in foreign markets, such as customs and duties tax which can vary from country to country.

"The marketplace is lobbying on your behalf to change things that lead to more demand and to make trade easier," he said. "The platform helps you stay within guidelines and understand if any of your products aren’t shippable to certain regions, to make sure you don’t get caught in those nuances."

4. Fraud

Marketplaces also help retailers to tackle fraud internationally. Sweetnam said: "They vet out problem buyers and help you make the running of your business as safe as possible."

eBay's top tip:

"Not all of eBay is old – 79% of our items sold are new and we have 159 million buyers globally," said Sweetnam. "You may be great at SEO and driving demand locally, but with marketplaces you are tapping into the organisation's entire ability to drive traffic from around the word."

Sweetnam also advised retailers to consider machine translation to unlock trade as there have been big changes in the technology over the last seven years.

Rakuten's top tip:

"My one takeaway is that you should not just translate your English product and content, you really need to localise," said Miller. "If you simply translate that won't convert well."

Miller described how countries rely on information including weights, dimensions and sizes which may be different depending on the market. Meanwhile, US and UK product pages are very different from, for example, a Japanese product page (see example below), with the latter showing around 35 images and videos, compared to US sites which prefer to use one dynamic product lifestyle shot.