HOW TO REACHINTERNATIONALMARKETS

Table of Contents

Introduction 02

Think Local and Flexible to Act Global 03

Communicate in Other Cultures 05

Design a Flexible and Scalable Global Process 07

Magento Helps Drive International Success 08

Learn More 12

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IntroductionYour company needs to expand globally. Competition, margin, and growth pressures, combined with a saturated domestic market are driving companies to pursue more international opportunities.

Global retail sales, including both in-store and online purchases, surpassed $23 trillion1 in 2017, while overall international retail sales are projected to hit at almost $28 trillion by 2020.

However, launching an international site can take up valuable time and resources, and missteps can be costly. From web page layout, to word definitions and cultural preferences, countries have widely varying practices and unique online user behaviors.

How efficiently you manage changes in culture, language, customs, currency, tax, and laws can make the difference between success and failure. Never assume that what works in your home market will work in foreign markets. Technology preferences will differ wildly. For example, in China, RenRen replaces Facebook, and old versions of Internet Explorer vastly outstrip newer browsers like Chrome in terms of user share. To tackle global challenges requires local market knowledge at your fingertips.

2 1 https://www.statista.com/statistics/443522/global-retail-sales/

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Think Local and Flexible to Act Global

• Know your customer, their preferences, and their values.

It’s no longer enough to just support foreign currencies, payment methods, and languages. You should tailor the whole experience to local customs and shopper expectations — from site design and product mix to supporting regional technologies and suppliers.

• You can learn from the mistakes of other major retailers.

For example, Walmart failed to crack Germany 2 because the company’s merchandising was wrong for the local market and demands of local customers.

Its low-price proposition didn’t stand out in a market where hard discounters control nearly half of all grocery sales, and it couldn’t gain benefits from using its IT and logistics systems because of the operation’s lack of scale.

On the other hand, Costco was successful moving into Australia partly because it wisely dropped the Costco card payment restrictions used in the U.S.

2 International Retail and Cross-Cultural Issues

Think Local and Flexible to Act Global

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• Pay attention to local customs.

In Japan, over half of the population prefer to make credit card payments when buying online, but in Germany approximately 70 percent prefer Direct Debit and Bank Wire Transfer.3

People in most foreign markets prefer to buy apparel and footwear in person, but Chinese consumers are more likely to buy these items online.

• Businesses that launch websites in China using the same format as their western sites make the assumption that Chinese consumers follow the Western taste for content in a glossy “look book” style dominated by images.

However, Chinese users expect a text-heavy, information-led experience. The biggest challenge in expanding globally is to think locally and design the shopping experience for each country. This requires a high degree of flexibility in the platform that supports your eCommerce sites.

3 CPC Strategy: “Global Retail Biggest Challenges”

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Communicate in Other Cultures

• The inability to communicate with customers is one of the biggest barriers to selling internationally. Translation is simply not enough. Language and cultural differences are subtle and complex.

Top retailers have demonstrated the challenges of translating unique product names and descriptions. For example, the literal translation of KFC’s infamous slogan “Finger-lickin’ good” in Chinese is “Eat your fingers off.” Not surprisingly, the Colonel had a bad start there in the 1980s.

When Clairol brought its Mist Stick curling iron to Germany, it failed to realize that “Mist” is German slang for manure. And Pepsi shocked Chinese consumers when it didn’t realize “Come alive with Pepsi” translated to “Pepsi brings your ancestors back from the dead.”4

• But language preferences extend beyond words.

Nuanced details, such as date and time display preferences matter. Guaranteeing shipping by 5/4/2018, for example, means May 4, 2018 in the U.S., but is April 5, 2018 in the U.K. Not catching this detail would upset customers in the U.K when their package arrives one month later than they had expected.

4 Brand Failures: The Truth About the 100 Biggest Branding Mistakes of All Time

Communicate in Other Cultures

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• Merchants developing regional eCommerce sites should begin with the understanding that the currency will be different, the language will be different, and inventory and order management might have to be different.

But there’s a faulty assumption that the design can easily be copied from one market to another. In western countries, the color red indicates high energy or love, while in eastern cultures, red is associated with prosperity, and in South Africa, mourning. A design that incorporates a lot of red and works well in Peoria may not be quite as successful in Pretoria.

Another subtle design challenge for international sites involves fitting design elements around the translations. Once you have a product name or product description translated, you may find that the elements of the design are no longer proportional with words that take up significantly more (or less) space. The implementation process of global design needs to be prepared to accommodate such adjustments.

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Design a Flexible and Scalable Global Process

• Aligning processes, systems, and organizational structures to expand internationally is an incredibly daunting task.

As companies expand globally, often within one market at a time, it is common to develop a new team and process for each market to provide the flexibility to undertake that country’s specific marketing campaigns.

However, with the best of intentions, corporate leaders who want to give each country’s management team the autonomy to select their own authoring and eCommerce solutions find that these multiple silos and processes become overwhelmingly complex and unwieldy when markets expand or proliferate.

• Global eCommerce requires a global solution for product information management to streamline processes, eliminate multiple silos, expand without headache, and deliver a great customer experience.

The key is to design a single, flexible, scalable global process that makes it easy to add channels and customer touch points, and also to expand into new markets and countries when opportunities arise.

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Magento Helps Drive International SuccessThe Magento platform makes it possible to easily expand complex operations on a global scale.

Efficiently Manage Multiple International Sites

• With Magento you can create authentic, localized brand experiences across multiple sites and handle day-to-day tasks with ease.

Stage and preview content, and quickly customize your merchandising by location with drag-and-drop categorizing. You can also offer shop-the-look, complete-the-look, up-sell, and cross-sell recommendations for your new, local customers. The Magento multi-site architecture uses a common codebase and common database for all versions of your site, enabling you to quickly configure and launch in foreign markets without developer intervention.

• In-home automation reseller Beaumotica 5 used the Magento platform to expand into foreign markets.

“Magento 2 was the best choice for us,” said Henry Van Der Borg, Managing Director of Beaumotica, “The platform was built for scalability and performance and would prepare us for international growth.” As Beaumotica discovered, the Magento theming and layout framework makes it easier to create and manage content in multiple languages. Magento Admin gives you a more efficient way to manage day-to-day tasks, such as updating products and processing orders. Admin and backend enhancements make it easier to import and export products, add attributes, and create custom catalog views.

9 5 See the Beaumotica case study.

Act Local

• The vast Magento global ecosystem ensures that you have expert local knowledge in any region.

From 150+ language packs to regional extensions and local system integrators, you can integrate almost any local business or custom system, without blowing your budget.

• Swiss-based Dufry 6 went global, thanks to the Magento ecosystem and expertise.

The Swiss travel retailer Dufry operates over 2,200 duty-free and duty-paid shops in airports, cruise liners, seaports, and other tourist locations. Dufry chose Magento Commerce because it empowers businesses to quickly and easily launch multiple sites across different geographic locations, supporting different languages, currencies, and products. In their first year on Magento, Dufry launched a staggering 12 international online stores, and another 16 in the year following their Magento implementation, exposing their products to 2.5 billion potential customers.

10 6 See the Dufry case study.

Break Into New Markets Faster

• Seizing international opportunities is all about market timing, speed, and agility.

Thanks to its unique multi-site architecture, Magento helps you launch faster, respond to market shifts, and capitalize on new developments.

• For example, Nestlé7 was able to launch in 30 markets in just 18 weeks, and continues at this blistering pace to launch two new markets every week.

“The key to our success is the wealth of out-of-box functionality of the Magento platform, and the extensions to the platform that help us meet the requirements of each market,” said Vanderlei (Vandy) Santos, Global Digital Transformation Lead at Nestlé. “We also receive significant help from the Magento experts to discover the best ways to leverage the Magento platform.”

11 7 See the Nestlé’s NCare case study.

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Growth is the main impetus for globalization. It’s time to let Magento power your business to expand rapidly into foreign markets.

Learn MoreQuestions?We’ve got a team of friendly commerce experts ready to answer them! We don’t bite, but we will help you grow your business.

inquiries@magento.com

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About Magento Commerce

Magento, an Adobe company, is a leading provider of cloud commerce innovation to merchants and brands across B2C and B2B industries and was recently named a leader in the 2018 Gartner Magic Quadrant for Digital Commerce. In addition to its flagship digital commerce platform, Magento boasts a strong portfolio of cloud-based omnichannel solutions that empower merchants to successfully integrate digital and physical shopping experiences. Magento is the #1 provider to the Internet Retailer Top 1000, the B2B 300 and the Top 500 Guides for Europe and Latin America. Magento is supported by a vast global network of solution and technology partners, a highly active global developer community and the largest eCommerce marketplace for extensions available for download on the Magento Marketplace. More information can be found at www.magento.com.