Tackling Niche Countries

LinkedIn Twitter Facebook

 

Chris Jones

Author: Chris Jones, Independent Multichannel Retail Consultant

 

Localising to lose

 

I remember some years ago being invite to consult to an online retailer of mid-prices watches. They sold internationally recognised brands such as Seiko, Omega and so forth, and had just invested a significant amount of money translating / localising their site for a neighbouring country. They then spent another significant sum on PPC marketing to bring customers from that country to their newly localised site. Resulting total sales: zero.

 

Why? Because there was simply no reason for a foreign customer to buy there. They weren’t cheaper than local retailers, they sold nothing unique, the ranges were readily accessible in their target country, delivery inevitably took longer than local players could achieve, and their site wasn’t otherwise special.

 

Why Niche Countries?

 

One obvious way to overcome these difficulties is to be a brand and / or manufacturer. Theoretically you have unique products available for foreign customers. Quite likely you already see a reasonable level of traffic, and even (if you offer shipping) purchasing, from attractive target countries. For established brands, however, there’s usually a snag: typically they have well-established overseas distributors already in place in such countries. Targeting the same end-customers via your own online store is apt to be unpopular if not actually futile.

 

So what other options are there? One possibility is to look for places where your product-range is still reasonably unique. It’s unlikely that you’ll find such destinations in a “mainstream” online country such as USA, Germany, Australia or Sweden. But there are niche possibilities.

 

Croatia Case-Study

 

One such possibility is Croatia, which I visited recently to present at a retail conference, and which I’ll use to illustrate some key points.

 

To begin with Croatia is small: only 4.4 million people. It’s also not apparently particularly wealthy: average wages are 26% of the UK figure. Only 22% of its population shopped online last year compared with 79% in the UK. Superficially is doesn’t seem very attractive.

 

BUT...

 

Over three quarters of Croatians that do shop online make purchases from overseas sites (see chart ), and it’s a reasonable assumption that those who do so are amongst the wealthiest. The fact that they are shopping overseas anyway makes them good prospective customers.

 

Internet Users and Online Shoppers in Croatia

 

Moreover, the local competition is somewhere between weak and non-existent. There’s no Amazon to start with. eBay is just about to start up there. If you look at international retailers, such as Asos, they might be shipping there but certainly don’t have a Croatian store, while many others (e.g. H&M, Zara or IKEA) are present but don’t have transactional sites for Croatia.

 

OK, there are barriers, but they aren’t as great as you might think.

 

Starting from absolute basics: Croatians do have the necessary devices to access the internet, supported by good broadband penetration too.

 

Device Usage by Country

 

Then, yes you will need to localise your site, although if you already have a German version, the combination of German and English might well make a reasonable initial job of it. There are reasonable local logistics companies (which will typically give you access to the rather similar Slovenia too). Most importantly of all, Croatia is a member of the EU, so a legal framework exists and there aren’t any customs barriers. Croatians pay with mainstream credit cards, and with eBay entering the market, almost certainly also with PayPal in future; there is, however, a local currency to cope with, not the Euro.

 

On the marketing side, Croatians search with Google and network on Facebook, just like their more mainstream-country cousins, so there are few technical barriers to overcome apart from language. And the costs of PPC/SEM type techniques are low compared with Western Europe (around 20%-35% of typical UK costs per click based on a brief analysis (see Global SEM Costs), making it relatively cheap to get going.

 

In summary, a reasonable comparison would actually be with a Northern Ireland where there was effectively NO local competition: not so huge, but possibly a very soft target. In fact if you’re a multibrand retailer, there is even a reasonable chance to develop a first-mover advantage in at least some of your categories.

 

Tempting, isn’t it?

 

LinkedIn Twitter Facebook

Black Friday growing strongly in Brazil

Black Friday growing strongly in Brazil

The phenomenal performance of Black Friday rippled around the world and Brazil was no different with eCommerce Brasil reporting billions in sales. So what are the figures coming out of Brasil on this bargain-hunting shopping day?
eCommerce in Brazil: Going local is key

eCommerce in Brazil: Going local is key

As with anywhere, Brazil has its fair share of problems – but with a population of 200 million, a tech-savvy and consumption-driven middle class and arguably the most internet-connected population in the world, is Brazil seen as a necessary evil for international merchants looking to expand internationally?
Why international e-tailers should re-visit the top of the funnel

Why international e-tailers should re-visit the top of the funnel

The role of brand awareness is increasingly critical to international expansion and with various platforms offering better reach and targeting than ever before, why is it important for international retailers to revisit the top of the funnel to help create a more compelling picture?
Quality of delivery offer important to Dutch shoppers

Quality of delivery offer important to Dutch shoppers

Cross-border eCommerce in Belgium and the Netherlands is making big strides and with a population of 28 million people and combined GDP of €1.08trn and English spoken widely, it’s no wonder it offers an attractive market to international merchants looking to expand into new territories. But does the quality of delivery offered that important to Dutch shoppers?
How to maximise your chances of success in India

How to maximise your chances of success in India

eCommerce is growing at an unprecedented rate in India thanks to a number of factors and with the percentage of online retail sales growing rapidly, what do retailers need to consider in order to maximise their chances of success in India?
What do Russian consumers want when it comes to cross-border shopping?

What do Russian consumers want when it comes to cross-border shopping?

Russia is the 9th biggest country in the world with roughly 30 million online Russian shoppers in 2015 which only continue to grows in 2016. However, with cross-border shopping being the fastest-growing segment of the Russian eCommerce market, what do Russian consumers want when it comes to cross-border shopping?
The importance of understanding what it is to be Russian

The importance of understanding what it is to be Russian

Russia, in terms of internet penetration, did lag behind most other European countries but is rapidly playing catch up. Not surprisingly, eCommerce has increased alongside internet penetration with an estimated 148 million orders generated in 2015. But with so many unknowns surrounding entering the Russian market, what are the golden rules?
What should retailers know about Russian attitudes to parcel deliveries?

What should retailers know about Russian attitudes to parcel deliveries?

Russia offers a potentially attractive market for international merchants, however the market needs careful consideration in order to get it right. Things to take into account include the distinctly different Russian way of thinking, along with the legal rules and political context of the country. So what are the key things retailers need to know?
Retail Pricing in a post-Brexit world

Retail Pricing in a post-Brexit world

Since Brexit, a number of events have taken place which has meant the price of items has significantly dropped in the UK. But what are the affects of the UK leaving the European Union on retail pricing?
Australia extends tax to foreign eCommerce

Australia extends tax to foreign eCommerce

For a number of valid reasons, Australia is still a destination firmly in the minds of any business looking to expand into the APAC region. With an attractive foreign eCommerce tax law favoring companies coming into Australia, what are the big changes coming down the line in 2017?

Contact Us

eCommerce Worldwide
2 Ching Court
49-53 Monmouth St
London
WC2H 9EY

Tel: 0203 696 0980
2016© eCommerce Worldwide

Keep In Touch

powered by Affino

About eCommerce Worldwide

eCommerce Worldwide provides online retailers with all the information, and resources, they need to develop cross-border strategies for entering new markets around the world
Read More