Expanding online sales into foreign markets remains one of the biggest growth drivers for businesses, regardless of size or industry. But how do you make your global domination plans come true in the age of demanding consumers and complex markets? It's time to get to know composable commerce, the agile, flexible and fast-paced foundation to fulfill your multi-country eCommerce ambitions.
No longer must companies invest in a full-blown physical footprint when expanding to foreign markets. Instead, eCommerce has become the dominant form of international entry strategies and continues to grow faster than ever. As the Visa Global Merchant eCommerce Study shows, 87% of merchants believe that expanding online sales into foreign markets remains one of the biggest growth drivers.
While cross-border eCommerce has taken a hit in the last two years due to COVID-19, Brexit and international political tensions, global expansions are again open for business – and a top priority for 40% of online merchants, according to 2022 eCommerce Trends by Verifone.
The staggering growth in online shopping is the critical driver in multi-country expansions.
In fact, the world’s top 250 retailers have showcased that shift toward digital, as demonstrated by Deloitte Global Powers of Retailing 2022. Companies that have quickly moved from physical to digital sales accumulated double-digit growth between 2020 and 2021 in domestic and foreign operations. In addition, the record-breaking trends of digital commerce adoption are in line with the predictions stated by eMarketer: The share of eCommerce sales will keep climbing year on year and is expected to reach 24.5% of retail sales worldwide in 2025.
As the pivot to online shopping becomes a permanent fixture of commerce, digital-native and brick-and-mortar businesses are exploring the window of opportunity to grow abroad as fast as possible.
Shaping your cross-border eCommerce strategy
An eCommerce-focused market entry is far from a one-dimensional strategy, encompassing a spectrum of options from adding products to regional marketplaces to a direct-to-consumer (D2C) approach.
Adding product catalogs to marketplaces has been a safe and low-cost alternative for merchants going global. Although marketplaces are beneficial for creating early traction, in the long run, these platforms are crowded with brands competing on price, without direct contact with customers.
D2C, as the business model of selling products directly to consumers and therefore bypassing third-party intermediaries, provides the environment whereby you can:
Control brand messaging and consumer engagement
Create direct access to customers and their data
Gain higher margins and strengthen brand loyalty
D2C can also come in different flavors. Companies can go D2C globally from a single website, which works well when targeting geographically close markets that share a common language, such as Germany and Austria. A more sophisticated D2C alternative is to create localized eCommerce sites and touchpoints, which requires more effort and investment but is ideal for curating audiences and creating tailored customer experiences.
When choosing a localized strategy, pay attention to details such as these:
Language nuances, e.g., “sweater” in the US and “jumper” in the UK
Locally relevant digital channels, e.g., WeChat in China and WhatsApp in Brazil
Checkout and payment preferences, pricing and local currencies
Seasonal campaigns, e.g., Cyber Week in the United States and Diwali in India
And, if you decide to localize languages, data, channels, currencies and customer experiences, you need to factor in how to handle these complex requirements in your eCommerce backend.
Composable commerce handles the complexity of cross-border eCommerce
If you’re exploring ways to expand internationally, think anew when defining the technical requirements that fit your global ambitions. Many eCommerce solutions out in the market are too inflexible and antiquated to minimize the complexity of cross-border initiatives. Known as monolithic or legacy platforms, these solutions are being slowly replaced by composable commerce systems that are more suitable for the global and complex landscape businesses face today.
As Gartner points out, “By 2023, organizations that have adopted a composable approach will outpace the competition by 80% at the speed of new feature implementation.” Take note: The paradigm in digital commerce has shifted from monolithic to composability, which is great news for businesses with eyes set on foreign markets.
Composable commerce, as the name suggests, facilitates a best-of-breed approach by combining (or “composing”) components into a custom application built for specific business needs. Using the principles of MACH architecture (microservices-based, API-first, cloud-native and headless commerce), composable commerce fulfills the requirements your company needs to stay ahead of customers’ demands:
Flexible and fast: Be adaptable and agile to fast-moving market changes and customer needs. Implement new business models, add product lines, customize touchpoints and enter new markets in a matter of weeks – not months.
Modular: Pick and choose components that suit global versus local business needs. Each local/regional branch may need to implement specific features or touchpoints independently.
Scalable: Handle online traffic spikes while maintaining high-speed performance without disruption or slowdowns.
Customizable and extensible: Experiment with campaigns and create localized features for one-of-a-kind experiences, and extend functionalities to react dynamically to customer interactions.
Composable commerce helps you tackle local demands with a centralized yet flexible infrastructure, wherever you decide to go next!
How composable commerce helped global rollouts by Audi, Danone and Emma
With hundreds of companies reaping its benefits, composable commerce helps companies large and small to expand internationally for the first time or manage existing multi-country units more effectively, such as:
Audi, the next-gen automaker, enables in-car commerce in 26 countries after implementing a location-independent product information management (PIM) system powered by commercetools to maintain product data.
Danone, the global nutrition company, implemented D2C sales based on composable commerce to address the baby formula shortage in Europe in 2013 and most recently during the COVID-19 pandemic.
Emma, the world-leading D2C mattress brand, adopted composable commerce to choose the best solution for each application, benefitting from an easily adaptable backend for its global ambitions. Now, the company sells products in over 30 countries.
With cross-border eCommerce up for grabs, companies investing in solutions such as those powered by commercetools Composable Commerce will be best positioned to expand beyond domestic markets successfully.
Learn how you can expand internationally and/or manage existing foreign units with composable commerce and MACH in the white paper On the Road to Cross-Border eCommerce, co-authored with Deloitte Digital.