US Online Retailers Still Look First To Europe Despite Growing Interest In Emerging Markets

Online retailers are rapidly adding emerging markets to their list of new global opportunities to explore, as these markets are set to take a growing percentage of global eCommerce sales going forward.  However, it’s important to remember that Europe still ranks as at the most popular region outside of North America for US online retailers expanding internationally. The market is set to grow at a healthy pace over the next five years: Clients can read my colleague Martin Gill’s recently published forecast of online retail sales in key markets across Europe.

Some takeaways from recent conversations with online retailers expanding into and within Europe:

■  The UK continues to top the list of markets for US-based online retailers. Considering a new eCommerce offering in Europe?  If you’re an online retailer from the US, chances are you’ll first look to the UK, with France and Germany following close behind. Of the top 10 retailers on Internet Retailer’s Top 500 list, for example, five sell directly in the UK (Amazon, Staples, Apple, Dell, and QVC) with two selling through different local brands (Walmart.com and Office Depot).  We recently found the same UK prioritization to be true in our report on manufacturers expanding internationally. The common language, large eCommerce market, and favorable  business climate mean the country is likely to retain this top position for US eBusinesses going forward – UK proponents like to point out that the World Bank’s latest Ease of Doing Business ranking puts the UK at #7, higher than any other European country aside from Denmark and Norway. 

■  Language and geographic location play a key role in market prioritization. Brands and retailers don’t always follow market size in their international expansion - some prioritize new markets based on their ability to leverage existing translated content as well as the location of their distribution centers. Many online retailers prioritize eCommerce offerings for the Benelux countries, for example, given the large number of companies that operate distribution centers in this area. In addition, companies that have translated content for France and Germany will often create new localized offerings for other French- and German-speaking countries before adding larger markets that require new languages.

■  Companies are taking creative approaches to translation. Translating product information into multiple languages can be extremely costly. Some retailers and brands have gotten creative by translating limited website content: Spanish retailer Zara takes a very image-centric approach with its global websites, translating little information about each product but providing multiple product pictures. This strategy can be cost effective for companies that aim to reach consumers through a wide range of languages. Zara, for example, offers its website in five languages in Spain alone.

We’ll dive into trends in eBusiness across Europe at our upcoming Forrester eBusiness & Channel Strategy Summit: EMEA 2012 on May 23 in London.  Several of my colleagues from the eBusiness team will be there to speak on topics such as the evolution of digital technology and mobile eBusiness. We have a great line-up of both internal and external speakers – we hope to see you there. 

Comments

Online retail in the UK

Asda isn't truly an example of a US online retailer expanding into Europe though; it's a British business that's owned by an American one. Amazon's roots in the UK also go back to a British business -- Bookpages -- that it acquired as far back as 1999, though that acquisition was part of a deliberate strategy of international expansion.

The other obvious example is eBay. Presumably Internet Retailer doesn't define eBay as a retailer -- which seems odd if you count manufacturers like Dell as retailers.

I think it's the size of the UK online retail market that makes it so attractive to US businesses. Ireland has many of the same advantages, but is a much smaller economy.

I'm demonstrating that I'm one of those UK proponents that you talk about. :-)