Realizing the Potential of Global Online Commerce in 2011

A recent piece at Forrester gave us hope that some of our favorite international (online) retailers may soon offer increased shipping options to the US – and will hopefully yield the same in 2011 from US online merchants to our friends internationally. Companies are increasingly citing emerging markets as key to long-term growth – which, at the expense of stating the basically obvious – requires the ability to sell and ship internationally. While Canada and the UK still rank as top destinations for US online retailers operating abroad, it’s also emerging markets outside of North America and Europe that will receive greater attention and reach in 2011.

Corresponding to the true globalization of online commerce, Forrester expects to see a few shifts occur in 2011 (and beyond). We’ve summarized some key points:

• International shipping options will permeate: International shipping is the most popular way US online retailers are reaching international consumers. Companies like FiftyOne, Bongo International, International Checkout, Borderfree – and of course traditional carriers like UPS and FedEx – can help navigate logistical factors to facilitate this.
• Companies will leverage domestic infrastructure before fully globalizing: Beyond an all-or-nothing approach, one alternative business approach to international expansion involves leveraging domestic infrastructure as long as possible until international revenues merit increased investment abroad. For example, a retailer may decide to hold off on establishing a warehouse and customer care facility in international markets until demand merits that investment. Threadless, for instance, offers site content in various languages, but continues to fulfill orders from its US facilities.
• China and Brazil will be top-of-mind for international expansion: When evaluating Asia as a potential expansion market, China may be perceived as a more pressing challenge than Japan. According to Forrester;
• With the world’s largest online population and a nearly $50 billion consumer eCommerce market (growing at a CAGR of more than 25% over the next five years), China is the one eCommerce market poised to rival that of the US longer term. And with a small but growing traditional B2C online retail sector, the supply side in China is evolving rapidly.

The potential of global online commerce has been touted for years, but the logistical, operational and financial realities of investing in this growth has slowed many retailers from fully tapping into the opportunity. We hope Forrester is correct and that 2011 is the year increasing amounts of retailers further dip their proverbial foot or leg in the water and yield returns by investing in multi-lingual websites, international shipping options and the like.

Forrester: “The Globalization of eCommerce in 2011″