Five Global Marketplaces All Brands Must Know

Global online expansion is not the same game it was just a few years ago. Today companies are taking a multi-pronged approach to international expansion and looking at a variety of different ways to tap into online shoppers in different markets. One approach that has been gaining momentum is the use of global marketplaces.

Traditionally dominated by small- and medium-sized businesses, online marketplaces have been extending their offerings for global brand owners. Brands today have a growing number of options to build out enhanced official storefronts on these global marketplaces, reaching hundreds of millions of online shoppers in the process.

Our report published this morning on Five Global Marketplaces All Brands Must Know (client access required) focuses on the opportunities and challenges of selling through global marketplaces. In the report, we profile:

Amazon. The giant of US online retail offers brands more than just a point of entry into the US market – brand store options are available in all 10 markets in North America, Europe and Asia in which the company operates marketplaces.

eBay. eBay's global offerings are growing rapidly: Current marketplace options for brands in countries such as the US, the UK and Australia being supplemented with new offerings in emerging eCommerce markets. The company has taken innovative steps to tap into the cross-border online shopper. 

MercadoLibre. This long-time leader in Latin American eCommerce has rolled out enhanced brand store options over the past year, opening up opportunities for brands looking to tap into the millions of new consumers starting to shop online in the region every year.

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eCommerce Evolution in Latin America

I just got back from a couple of days at eTail Latin America in Miami — it was my third year at the event and I always come away having learned an enormous amount from the other attendees. This year, some of the takeaways included:

Everyone’s talking about mobile, but the real shift is coming. The online retailers I spoke with had all either rolled out or planned to roll out smartphone offerings, but mobile investments overall are still quite small. Tablet commerce initiatives are few and far between. Retailers’ mobile revenues, while growing, are not typically at the same levels seen by many leading eCommerce players in Asia. This dynamic will shift significantly as both smartphone and tablet penetration increase: Across the region, penetration of both types of devices will shoot up over the next few years.

Payback periods on new eCommerce offerings remain long. A theme we write about frequently is the fact that businesses often assume short payback periods on new global digital offerings. The unfortunate reality, however, is that eCommerce initiatives often take many years before becoming profitable. This challenge is front and center in Latin America. There are some profitable businesses — the founder of Brazil’s Beleza na Web talked about how he got his company into the black — but many large online retailers continue to suffer losses. Businesses jumping into any of the Latin American eCommerce markets must be patient.

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Common Themes Across Three Global eCommerce Markets

Over the past few months, I traveled to several different eCommerce- and retail-related conferences, including events in Brazil, China and Colombia. The eCommerce markets in these countries are wildly different, yet a few common themes emerged at the events, especially in relation to omnichannel:

Retailers aim to leapfrog with their omnichannel initiatives. In all three markets, there are a number of traditional retailers that are just launching or building out their eCommerce offerings. Given that these retailers are starting with a clean slate when it comes to digital initiatives, they are aiming to forego the siloed approach that many US and European retailers took when they launched eCommerce. Instead, as these retailers look to develop or expand their eCommerce initiatives, they seek to create integrated offerings across all of their channels that emulate best-in-class omnichannel offerings around the globe.

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Four Takeaways From An Evening Of Omnichannel Retail In New York

Last night we held an event here in New York in which VP & Principal Analyst Peter Sheldon presented some of his recent research on the new omnichannel imperative.  He talked through the state of omnichannel retail today, why omnichannel is now essential for retailers and which changes retailers must make in order to drive their omnichannel initiatives forward. A few takeaways from the event:

Online sales and web-influenced sales now represent the majority of all retail transactions in the US.  This year’s $3 trillion US retail market is dominated by a combination of online transactions and offline transactions influenced by online research (our colleague, Sucharita Mulpuru, documents this trend in our cross-channel retail forecast). Peter pointed out that high-value purchases tend to be the most heavily researched, with some categories like cars seeing extraordinarily high levels of online research prior to purchase.

Retailers are thinking creatively about in-store pickup. Today’s in-store pickup initiatives vary greatly in terms of execution: Not every retailer has determined it’s best to place in-store pickup areas in the back of stores, forcing consumers to walk past a variety of potentially tempting products en route to the pickup area. In Canada, for example, Future Shop (a division of Best Buy Canada) offers items for pickup within 20 minutes of the order being placed online and provides a separate pickup area just inside or outside the front of retail stores. Consumers don’t spend precious time waiting for pickup and navigating to hidden-away pickup areas – instead, the idea is to provide them with time to shop after collecting their purchase.

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Take Your eCommerce Business Global With Our New Playbook

eCommerce revenues are soaring around the globe. This year, the US, Western Europe, and China alone will generate over $800 billion in online retail sales. Growth rates, too, remain staggering in many countries: China’s massive online retail market will more than double between 2013 and 2018, as will Brazil’s. India’s much smaller market will grow by eight-fold during this timeframe.

However, a litany of businesses have failed as they attempted to tap into shoppers outside of their home markets, with many large US and European brands factoring prominently on the list of casualties. eCommerce is no exception: Numerous eCommerce businesses have taken the plunge into new markets, only to find their offerings didn’t resonate with local consumers or they were outsmarted by much savvier local rivals.

What separates successful global eCommerce businesses from their counterparts? Which tactics have proven particularly effective for brands aiming to extend their reach into new markets? What are some of the most common challenges businesses tend to encounter? Our newly published eCommerce globalization playbook helps brands through the thorny process of global expansion. Clients can read our playbook for insights on how to:

Discover and quantify international revenue opportunities. Our playbook includes reports outlining the global opportunity and identifying how eCommerce markets typically develop with time. Our online retail forecasts for the US and Canada, Western Europe, Asia Pacific, and Latin America provide a quantitative look at market sizes and eCommerce trends in these regions.

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Three Days Of eCommerce In And Around Shanghai

A number of us from Forrester offices inside and outside of China converged on Shanghai for a few days last week for our annual Marketing & Strategy event. The trip proved to be especially timely given the extensive media focus on China’s eCommerce market with the recent news on Alibaba's US IPO.

My agenda was largely packed into three days:

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Creating Customer-Centric eBusiness Experiences In China

On March 19th, I’ll be joining several of my colleagues in Shanghai, China for our Summit for Marketing & Strategy Professionals. One of the themes we’ve been exploring recently is how the age of the customer translates in the Chinese market. During my session at the summit, I will discuss some of the following things that the most customer-obsessed businesses, and savviest eBusiness leaders, are doing to effectively compete in China. These leaders:

Understand their customers and use this information to be as relevant as possible. In China, a growing number of eCommerce players are using customer data to help drive sales online, for example, by providing detailed product recommendations. As in other parts of the world, however, many eBusiness executives in China are at the early stages of truly understanding their customers and using this information to be relevant in their daily lives. We’ll look at how some brands use customer data effectively today, and what some of the more innovative use case scenarios look like in eBusiness.  

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More Trends In Emerging eCommerce Markets

In our research, we’ve talked about some of the trends that mark early-stage eCommerce markets. This year I’ve been to a few events to talk about how different eCommerce markets are evolving – today we see that:

Retailers’ ownership of logistics networks is now widespread. The model of online retailers owning and operating logistics networks in emerging markets is well established. While there used to be a handful of examples to point to, it’s becoming increasingly common for a number of the top eCommerce players to operate their own logistics networks - Amazon in India is just one recent headline-maker in this area. Indeed, in the BRIC countries today, only Brazil does not currently see many of the leading online retailers operating their own networks.

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Five Key Online Retail Trends In Latin America

Today, we published our new online retail forecast for Latin America, covering Brazil, Argentina, and Mexico (clients can read the report here). Driven by online retail revenues in Brazil, where the market is forecast to reach $35 billion by 2018, the region’s eCommerce markets will continue to surge. We see the following trends in Latin America:

  • eCommerce will continue its upward path despite slowed economic growth in the region. There has been significant coverage of the slowing economies in markets like Mexico and Brazil. However, as we saw in markets like the US and the UK during the recent global recession, eCommerce remains a bright spot even during challenging economic times. We expect to see online sales continue to increase at a rapid pace across Latin America, even though many countries are no longer seeing the high economic growth rates of recent years.
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The Globalization Of eCommerce In 2014

eCommerce players of all types continued to build out their global footprint in 2013. Asos launched new sites for Russia and China, for example, and eBay targeted shoppers in Brazil with a new mobile app. HP and Lenovo both launched online stores in India. Not all major online retailers pressed the gas pedal, however: Macy’s has taken a slow approach with its China initiatives, and Comprafacil, a leading Brazilian online retailer, recently faltered in its own market due to a variety of challenges. In 2014, we anticipate that:

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