Internationalization is essential for the success of any online business, especially for those involved in e-commerce. In this article, Luis Flores, digital business director at Gioseppo, shares his experience and expertise on internationalization strategies for ecommerce. From choosing target markets to adapting marketing strategy and managing international shipments, Flores offers practical and valuable advice for those looking to expand their digital business globally. If you are interested in learning more about how to internationalize your ecommerce, don't miss this article!
If we talk about internationalization, we talk about scaling business because our e-commerce will have entered a phase of maturity and this will mean that we are ready to face and activate all the levers required for a correct internationalization of a digital business.
Prior to this step, it has been possible to make mvps or tests with some potential market through expansion in marketplaces. This is always a good test to see if our logistics, product and financial teams are prepared for the stresses and demands of entering certain markets and/or marketplaces. For example, it is not the same to sell with our own logistics or through fullfilment services of each marketplace, each of them has its impact on the income statement and must be analyzed in detail. We also have to answer questions such as whether we are ready to invoice in non-euro currencies, management of merchandise in warehouses, inventory control, product, adaptations...
Phase zero of an internationalization process will also include a review of these points, which I consider basic.
- Market Research.
- Web environment adaptation.
- Marketing strategy.
- Adaptation of customer service.
- Legal and tax requirements.
- Logistics costs.
Once the initial phase of these basic processes has been resolved and the adaptations have been made, we must focus on the potential of each market, since the main benefit of selling well abroad is the commercial margin of the market in question and, therefore, our operating accounts can improve considerably.
The levers to improve the margin are:
- Pricing strategy: by market, applying the appropriate coefficient according to variables such as logistics costs, competition...
- Product strategy: what type of product we will sell per market, what collection adaptations we will make and what type of promotions and how they influence the margin we will make for each product.
- Content / technology strategy: what technology we need depending on the market and how we are going to adapt it, I mean payments, processes, mk automation, search engine, opinions, AI applications... Any technological process that helps us in the market is a multiplier effect of the margin.
I have always considered that Product, Content and Technology are the three strategic pillars of our work in the digital area, so we have to adapt them to each market.
After having the solid commercial margin, the next step is the breakdown of all operating costs by market and the picture of it is the contribution margin that in a global operation where we sell in many markets, I recommend analyzing it in detail country by country to avoid making wrong decisions. I am talking about all costs such as storage, dedicated staff, investment in digital marketing in the country in question, translations, commissions if there is a Partner that accompanies us in this process, in short, all the variable costs that will influence the results.
In conclusion, once the basics of a digital internationalization process have been resolved, we have to focus on the growth levers of commercial margin and operating margin to have a detailed picture by market that gives us a vision of which markets are profitable and which are not, and whether the profitable ones can maintain over time those that are not, but we are interested in maintaining for some type of commercial agreement or strategic project. All this without losing the focus on scalability, which for me means talking about profitability.
