7 rules to take a digital start-up global
How do you take an online business global and avoid the common pitfalls? Here are seven areas you need to think about
The speed digital start-ups can start trading overseas can be breathtaking. It was only in 2010 that Uber launched its alternative taxi service in San Francisco.
Today, it provides transportation services in 63 countries and has a well-established presence in the UK. It’s been a similar story of stellar international growth for accommodation broker Airbnb.
Their app-driven models work just as well in London or Paris as they do in San Francisco and New York, and as poster children of the “sharing economy,” their rapid expansion hasn’t required huge property outlays or taking on drivers’ salaries. Instead they’re providing a means for thousands of micro-entrepreneurs to utilise their assets profitably.
But it’s vital groundwork that offers the best chance of success. So what does that mean in practice?
Find your market position
How you position your product may have very little to do with your current branding. Say you’ve had some interest – via the web – from Latin America and Brazil. In the UK, yours is a middle-market brand; not cheap, but certainly not luxury, and that’s where you expect to pitch your tent overseas.
But in Brazil, high tariffs mean imported goods are much more expensive than home-produced products. The increasingly wealthy populace are prepared to pay extra, but overseas companies tend to have to pitch at the high-end premium or luxury markets. That has marketing implications.
Check the regulatory backdrop
Talk to lawyers about the regulatory backdrop, as there can be surprising pitfalls. For instance, last year Airbnb was fined by courts in Spain because its business model contravened local restrictions on holiday lets.
Meanwhile Uber faced a ban in Spain following protests by local taxi drivers. More generally you need to know the health and safety and workers’ rights regulations (if you employ people on the ground), as well as consumer protection legislation (including return rules on physical goods), tariffs and tax arrangements that affect your business.
Assess demand for local roll-out
One big question is when to localise. For instance, if you’re doing business in the UK, France and Germany, but are also pulling in orders from Sweden, should you add the Kroner to your currency payment options?
Go into analytics and see what countries are driving revenues. Once you’ve done that, you can ask a provider to expand the currencies available. Localising the site, however, is a bigger investment.
Creating a great digital experience
So you’ve researched thoroughly and all the evidence suggests you can replicate what you do in the UK. The next step is creating a great, tailored, digital experience.
Remove the barriers of conversion to turn a casual browser into a customer. Often a potential customer will abandon ship at the last minute; roughly 68% abandon their basket on desktop, while around 93% on mobile do not complete a purchase.
So make the experience as easy as possible. Overseas that essentially means a local language version of the site and an easy-to-use payment system that supports local currencies.
A payment system that offers your shoppers their preferred way to pay is crucial, whether debit or credit cards, PayPal, or new solutions such as Apple Pay. When buyers feel comfortable – or even excited – about a particular payment method, conversion rates and sales will increase.
Mobile payment systems – such as the solution provided by Braintree – are increasingly important in a global market where smartphones account for an ever-increasing percentage of e-commerce sales.
Equally, a system you can integrate seamlessly with your e-commerce platform and that will expand and develop with your business is key, as well as providing support for multiple currencies.
Make it secure
As at home, customers in overseas territories will want to know their credit card details and personal information are safe and secure.
On the face of it, this should be a challenge you’ve already addressed. The technology and strategies that you pursue in the UK can simply be replicated elsewhere.
But there are cultural differences too. In the UK, customers are accustomed to the 3D Secure system offered by banks, but in the US, it’s more likely to be a deal breaker. Put simply, it’s a means to double check the identity of the customer by requiring a password to be entered before the transaction can be completed. Find out what your customers expect and apply them to your security policies.
Talk to support agencies and peers
Where do you find all this information? In the case of specific technologies – such as payment and security – providers such as Braintree and PayPal should be able to provide guidance.
In terms of the wider market, the Chambers of Commerce and organisations such as UKTI can help. Equally, talk to other businesses. Trading abroad has many upsides, but it’s vital to do the homework.
This article was produced in partnership with Braintree, a payments platform that allows merchants to accept credit and debit cards, PayPal, and Apple Pay with a snippet of code. Uber, Airbnb, and GitHub as well as thousands of other merchants use Braintree in 46 countries. To learn more, visit Braintreepayments.com or @braintree.