Expanding into new markets is a common growth strategy for many eCommerce brands. While going international is exciting, it can come with its challenges.
From managing the logistics of international shipping to navigating legal complexities and maintaining a smooth, enjoyable online shopping experience, there’s a lot to consider. Yet the benefits of internationalisation can far outweigh the challenges when implemented well.
Expanding globally means your brand can reach more customers. In turn, this can lead to greater market share, increased brand awareness, and a diversified product offering — to name a few potential benefits.
Are you looking to optimise your eCommerce store for international success? While the eCommerce store you manage may already sell outside the UK, a truly global strategy requires more than just shipping abroad. From localisation and international warehousing to tax compliance and Duties Deliveries Paid, take these 11 key considerations into account for a successful expansion.
Consider these 11 factors before expanding into new eCommerce markets
You know all too well that managing an eCommerce business isn’t as simple as:
Adding new products to your website → Selling products → Sending products to customers → Patting yourself on the back
The realities of eCommerce are far more nuanced than that. The eCommerce sales channel doesn’t work in silos and changes to your online store can have a ripple effect of impact. Making a seemingly small change to your website might have a knock-on repercussions on logistics, operations, or customer service. The truth is, there is a whole eCommerce ecosystem surrounding your online store.
As an eCommerce store owner or operator, it is your responsibility to keep that ecosystem working like a well-oiled machine. You want every interconnected platform, service, and tool to work together without a hitch.
When expanding into foreign markets, you need to consider all aspects of your retail business. This includes warehousing, shipping, currencies, customer support, legalities, marketing, and much more.
So, let’s take a look at some of the elements of your eCommerce ecosystem you’ll want to consider as part of a smooth eCommerce internationalisation strategy.
1. Customer demand
Before entering a new market, you need to validate whether there’s demand for your product and if there is a viable product-market fit.
There’s a few ways you can determine whether there’s customer demand for your product or brand in a new international market. You could start with your firsthand data by using traffic analytics to track international visitors and their search terms, from GA4 or your eCommerce platform (such as using Shopify Plus to create an exploration) or reviewing customer support tickets for purchase requests from different regions.
Alternatively, you can test customer demand by conducting deeper market research by interviewing potential international customers. Carrying out international keyword research can also be a highly useful way to assess search demand. Similarly, you can review competitor activity to see if they are present in any of the markets you’re interested in expanding to. This competitor research might help you spot potential gaps in the market that your products could fill, as well as showing existing demand for your products.
More in-depth research would include calculating the potential market size in your target region. This would help you determine the economic potential of expansion. Once you’ve established demand, you’ll want to develop a go-to-market strategy for your expansion.
2. Customer service
You might experience a few hiccups while you’re first getting settled in a new market. Being well prepared will help keep these challenges at bay but having strong customer service processes can help further minimise any customer or order issues.
When planning to expand into new markets, consider how you will provide customer service to customers within these new markets. Research by Intercom shows that localised customer support can lead to reduced customer frustrations and higher customer satisfaction and loyalty rates.
Consider offering multilingual customer support and make sure you have the right customer service infrastructure in place to effectively support customers in different time zones, languages, and countries. If you don’t have staff located in the new market, or there are language or time zone ramifications, you could consider outsourcing customer service to a third party as phase one, before investing more heavily.
3. Warehousing and fulfilment
Expanding internationally means rethinking how you manage inventory and fulfil orders. Your current warehousing solution might not be the best option for international sales. When figuring out your warehousing plan for internationalisation, you have the opportunity to decide between shipping everything from a central location or using a multiwarehousing strategy that uses local fulfillment centres.
Your internationalisation warehousing strategy doesn’t just cover the physical logistics of warehousing. You also need to consider how your warehousing technology will change. Make sure your backend systems are capable of managing stock levels across all your storefronts and warehouses.
The cost of warehousing will also come into play. Before deciding which warehousing method to use, consider the associated costs of setting up warehouses in your new market versus cross-border shipping. While domestic warehousing may have a higher initial investment, the faster delivery times could save money long-term and improve customer satisfaction.
If you use Shopify, their Fulfillment Network and cost calculator can help determine the best approach.
4. Shipment fees and regulations
International shipping logistics can be complex. With varying regulations, costs, and requirements across different countries, there’s a lot to get your head around.
As mentioned above when discussing warehousing, you’ll need to decide whether domestic or international shipping is best for your store. There’s no right or wrong answer here. It depends on your circumstances and capabilities.
If you plan to sell products in a new market, make sure you familiarise yourself with the different rules and regulations surrounding shipping. UPS has a useful tool for understanding country-specific regulations for international shipping.
Whichever shipping method you choose, be transparent about shipping fees. Clearly communicate shipping fees so customers aren’t hit with an unexpected cost at checkout.
Finally, make sure your online checkout process is set up to accommodate international shipping rates and duties. If you plan to use different shipping partners, you’ll want to make sure your eCommerce platform is set up to handle this.
5. Legal and compliance
Expanding into new markets means you need to be clued up on local laws and regulations. This field is expansive so we recommend doing your research and seeking legal assistance where appropriate.
The General Product Safety Regulation (GPSR) is an example of a relatively new regulation that impacts UK brands selling into the EU. GPSR replaces the General Product Safety Directive 2001/95/EC and outlines strict safety and product labelling standards that eCommerce businesses need to comply with.
The laws around health-related product claims, return policies, and the selling and shipment of hazardous goods vary across markets.
Hazardous goods, for example, can create challenges for merchants selling products that fall under this bracket. You will need to be able to set up fairly complex shipping exclusions to ensure customers are not able to buy hazardous goods in countries where these products are restricted. Sales of hazardous goods may also incur additional courier surcharges for handling.
Then, there’s website accessibility too. In the US and Europe, digital accessibility laws are becoming increasingly stringent, making it essential that your site meets accessibility standards before expanding.
Non-compliance with local laws and regulations could lead to costly fines or restrictions. Consulting with local legal experts before launching in a new market can keep your business well-informed and protected.
Finally, you’ll likely want to set up a US company as a separate legal entity. Setting up a US company to sell to US customers can offer significant operational advantages such as better sales tax management, lower shipping costs, and a more trusted local presence. Talk to a US accountant to ascertain the best state to incorporate in, and decide whether you’ll have any US payroll, and whether your systems need to be audited or SOX-compliant. You’ll also need guidance on whether you need Form 1099 and/or W-9 collection.
6. Currencies
Expanding into new markets likely means managing different payout currencies. You’ll want to check foreign exchange rates and make sure you understand how this may impact profit margins, pricing strategies, and overall company finances.
Shopify recognises that 92% of online customers prefer to make purchases in their local currency. So, if you want to grow globally, you need to consider billing customers in their local currency. Ensuring your chosen payment partner can support multi-currency transactions can be a cost-effective way to accept multiple currencies.
7. Payment methods
The payment methods you accept is just as important as the payout currency. Research which payment methods are commonly used in the country you’re expanding to.
The payment methods you offer may also come with legal considerations. Buy Now Pay Later (BNPL) regulations, for example, may differ outside of the UK. While some countries are largely unregulated, others have strict regulations that providers and merchants need to comply with.
Research by PayPal shows that 72% of shoppers in Latin America use their debit cards while Asia-Pacific customers prefer digital wallets, and North American customers use credit cards, direct debit, or debit cards. Countries like Sweden and Australia have high BNPL adoption rates.
Before expanding, research the preferred payment methods for your target market and make sure your payment gateway can accommodate them. A friction-free payment experience can make all the difference in driving international sales.
8. Multistore management
Managing multiple storefronts for different international markets can quickly become a logistical nightmare if your eCommerce platform isn’t equipped to handle it. Each store might need different product listings, pricing, taxes, shipping rules, and marketing strategies.
Leading eCommerce platforms like Shopify offer tools that allow eCommerce businesses to manage multiple storefronts from a centralised dashboard. The challenger platform Centra also offers multiple storefront functionality. If you need help finding the best eCommerce platform for your needs, get in touch to see how we can help.
Having an eCommerce platform that supports multistore management will make your eCommerce operations much easier as you scale globally.
9. Translation and localisation
Expanding into new markets means more than just translating your existing website. True localisation means all aspects of your eCommerce store are culturally and linguistically adapted for the new market. This includes product descriptions, sizing information, marketing messaging, imagery, and customer notifications.
In the past, the only option for translation and localisation services was to use an agency or partner. Now, merchants can use AI-driven technologies such as DeepL. Deciding whether to use an AI-driven translation tool or a professional translation agency depends on your budget and quality expectations.
Shopify’s Translate & Adapt first-party app lets you translate your store content into two languages for free. However, this app does use Google’s translation service so it can be quite limited in its abilities.
Certain projects may need different approaches. Post-Edited Machine Translation (PEMT) is the most cost-effective method for keeping costs low while getting a large bulk of content translated. This method uses AI to translate content as a first pass. This AI-translated content is then checked by a human for further refinement. Some agencies may have proprietary LLM software that they use to deploy PEMT content.
Where your website content is highly creative, brand-heavy, or uses marketing flair, you might want to opt for transcreation. This is a far more specialist service that can be expensive. But it can be worthwhile if it means your messaging stays on-brand and mistranslation-free when targeting new markets.
As for legal content, you’ll want to take extra care. Legal translations are best handled by a legal expert. These are the most expensive types of translation as they must comply with regional laws.
When working with a translation agency or contractor, ask them to maintain a glossary that you can use to ensure consistency and reduce long-term costs. This might include repeated phrases that appear on your storefront like “This item is true to size”.
10. Sales taxes
International and cross-border sales taxes can be complex. Double taxation risks, VAT requirements, and customs duties all need to be factored into pricing and operational decisions within your internationalisation strategy.
We recommend brushing up on tax treaties to mitigate double taxation risks and make sure you don’t fall victim to overpaying.
There are lots of tools you can use to simplify and comply with tax requirements. Avalara has historically been a useful, yet expensive, tool for sales tax compliance, particularly US. Shopify now offers its own Shopify Tax tool which is a more affordable contender to Avalara (it’s free below $100k and then a transaction fee kicks in), which can also generate an automatic filing for you for $50 for US states. There are also alternatives like Zamp if you operate a multi-channel brand e.g. sell on Shopify Plus as well as Amazon US, as some nexus are calculated based on total number of transactions across all platforms.
Meanwhile, software like Global-e, Zonos, and Glopal are all cross-border partners that can act as the Merchant of Record on your behalf. It’s worth noting that Shopify Managed Markets (previously Markets Pro) is Global-e whitelabelled — while this isn’t yet available to UK merchants, it suggests Shopify sees Global-e as its preferred solution for handling cross-border sales taxes.
Under the OSS (One Stop Shop) scheme, businesses can simplify the declaration and payment of VAT for European country sales of low-value goods. You can either apply for your own OSS or use your cross-border partner’s registration.
We’ll go into these tools in more depth in a future blog post as they warrant their own article and evaluation.
11. Marketing
Even the way you market your brand will vary depending on location. What works in one market might not resonate in another due to cultural differences, regulatory requirements, and consumer expectations. Cultural politeness can impact the performance of international marketing campaigns so it pays well to understand your market.
You only have to Google “marketing mistranslations” to get a glimpse at just how many times brands have failed to localise their marketing efforts. These marketing mishaps can be costly so it’s crucial to get it right first time.
In the US, for example, marketing might be more brash than Asian markets where politeness is valued more highly. The FDA (Food and drug Administration) agency in the US has strict rules around the claims made on product labels. These rules extend to websites meaning any website health claims need to be submitted to the FDA for approval.
Regional shopping behaviours should also be considered when marketing to new countries. Events like Black Friday may play a major role in American eCommerce strategies but that doesn’t necessarily mean they’ll have the same impact for all countries around the world.
Adapt your messaging, promotions, and advertising to suit local markets, increasing engagement and conversions while protecting your brand reputation.
Final thoughts on preparing to go global
International expansion is an exciting next step in growing your eCommerce business. But the secret to a successful internationalisation strategy is to be prepared before you take action. From understanding local customer demand to handling logistics, payment preferences, and localisation, every detail matter when taking your eCommerce business global.
We love helping brands put an internationalisation action plan together. If you plan to expand into new markets, we can help you develop a strong global expansion strategy tailored to your target markets, capabilities, and goals. Reach out to tell us all about your expansion plans and see how we can support your growth.
