Challenges With Running A Global eCommerce Business

— April 11, 2017

ECommerce has made it simpler for businesses to sell their product to a global audience. No matter where your business is located you can still market and ship your product to customers located in other countries. Operating a global commerce business is however not without its set of challenges. There are many customs, duty and marketing related issues that a business looking to go global must negotiate through in order to become successful.

Customs Clearance

Customer satisfaction depends on prompt delivery to a great extent. Global eCommerce shipments routinely get caught in customs clearances that not only impact the delivery of your product, but can also in turn ruin your customer’s experience. The financial and legal regulations surrounding cross-border eCommerce is often unique to every country you ship to and it is important for businesses to educate themselves of the various laws. For instance, a couple of years back, the Brazilian government enacted a law that mandated all imports to carry a customer tax ID on the cover. If your customer is located in Brazil, your failure to gather their tax ID and print on the package could give custom officials in Brazil the right to confiscate or destroy your package. There is no workaround this challenge except to study the regulations and abide by them.

Branding & Positioning

Marketing is a core component of doing business and few organizations have succeeded in building a universal brand image. Fast food chains like McDonalds create a unique brand positioning for every country they operate in. While they are marketed as cheap and quick service restaurants in the West, they are marketed as higher-end fast food restaurants in developing countries like India. Brand positioning should also take local cultural nuances into consideration. For instance, shopping festivals in the West are often centered on the winter holiday season while the Chinese new year and Single’s day drive commerce in China. It is important to study each of your markets independently and craft a unique marketing and positioning strategy for this market.

Payment Gateways

Accepting payments from customers across the world can be a challenge. While credit cards are ubiquitous in the Western world, customers in other parts of the world prefer other modes of payment. Digital wallets are a growing phenomenon in many countries of Asia and Africa while customers in many other countries prefer ‘Cash on Delivery’ due to trust factors. Besides customer preferences, there are other challenges that businesses face as well. Transaction fees on international cards are often higher and if you have an American payment gateway, chances are that your provider charges higher for transactions happening from Europe or Asia. Credit card providers too routinely flag payments made over payment gateways located outside the country. The only way to resolve this is by partnering with payment gateway providers from across the world to cater to payments made in the geography. This could however deny your business the chance to save on fee by clocking higher transaction volumes. But this is a compromise you have to make between higher transaction fee and higher market penetration.

Running a global eCommerce business offers startup entrepreneurs a fantastic opportunity to learn business practices and regulations from across the world. While this makes the learning curve steep, it does pay off well in the end. Do you have lessons to share from running a global business? Share your insights in the comments below.

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Author: Anand Srinivasan

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