Last year, we introduced our framework for how eCommerce markets evolve: Consumers come online to connect and entertain, then start to engage in eBusiness basics like online banking and travel.** Only later do they tend to start purchasing physical products online, with readily comparable goods like mobile phones, computer hardware and books being some of consumers' first online purchases. The final phase involves consumers buying across a wide variety of categories online, including those with a strong “touch and feel” component to them:
Clients can access our recently updated report on this topic, which includes lots of new forecast data and notes how countries have moved through these phases. Brazil, for example, which was solidly in phase 3 last year, has started moving toward the final phase, where categories like apparel and beauty start to become a much more critical piece of the eCommerce market. A look at the shift in MercadoLivre’s GMV category ranking in 2012 gives one snapshot of this evolution:
Also included in our updated report is a look at how online retailer offerings in each market tend to differ depending on the phase the country is in. This report forms the vision report chapter of our upcoming eCommerce globalization playbook.
The past few weeks have involved travel to a few different events, ranging from eTail Latin America in Miami to Internet Retailer Conference & Expo in Chicago to the Goldman Sachs dotCommerce Day in New York. Rather than summarize the events, all of which were incredibly valuable, I wanted to highlight some themes from conversations I had at these events with brands looking to expand into new markets.
Leading global brands are increasingly aware they need to vary their approach globally. A common assertion in articles about localization is that companies erroneously view Europe or Asia as “one country” and fail to take into account key differences between countries. My experience is that global brands have largely moved beyond this phase: The brands I spoke with are keenly aware that each market is different, and are anxious to understand how they’ll need to adapt their online offering. They may not understand all of the differences inherent in each market, but they know — or are learning — the right questions to ask. The challenge for brands is understanding which parts of their offering really need to change to meet local expectations (and therefore merit the investment required to make the shift) and which offerings will still resonate even if they differ from those provided by local players.
I am incredibly excited to announce that Ken Calhoon joins Forrester today in our eBusiness consulting practice. Ken has a fantastic background working with different organizations expanding internationally: Most recently he ran his own consulting firm focused on global expansion; prior to that, he spent seven years at eBay in different positions including VP, International Headquarters and VP, International Trust and Safety.