Have you reached the local ceiling? Invest your energy in eshop expansion. You will secure your growth and gain a competitive advantage. How to build a successful business abroad? Read this experts’ advice.
Table Of Contents
Eshop Is Growing Faster than the Market
Interest in online shopping is constantly growing. The global online shopping market hit nearly 4 trillion American dollars in 2020. After this record year, sales may fall slightly, but the interest will remain in the long term. More than half of the Brits shop online and the number keeps growing.
Eshops of high quality have grasped the opportunity and are growing with the market. If they are truly successful, they can grow faster than the market itself. Does this situation look familiar to you? Then it’s time to look around for new opportunities.
Your Country Is Just the Beginning
Many entrepreneurs already understand that true business success awaits across borders. The Local market is just the starting line, expansion will ensure long-term profits.
For example, Slovak ecommerce: Today we help about every second client to export to at least 3 countries, while normally covering exports in 8 to 12 countries. Not only in the CEE region, our global work has results from Singapore to Canada.
A Successful Eshop Needs to Get Ready
Entrepreneurs sometimes make the mistake of rushing into expansion too early. In this case, boldness is not the way to go, because an eshop needs to be materially and procedurally prepared for expansion.
What does the expanding eshop need to have?
- Enough financial resources
- Fine-tuned warehouse and management systems
- Perfectly managed sales on the domestic market
Fine-tuned ecommerce warehouse processes are an absolute must before the actual expansion.
Think about the financial reserve
Expansion is challenging, especially for your finances. Entrepreneurs don’t count on a lot of necessary expenses: legal analyses, foreign language translations, transportation, local support and marketing, etc. All these activities require time and money.
In no way we want to discourage you. Expansion is an opportunity, not a bogeyman. However, you must be prepared to spend a certain amount of money and energy.
Optimise processes in your home market
Before the expansion, we recommend that every client “clean up” their home business. If you don’t have effective marketing in the country, operating in new markets will complicate the situation even more.
Ask yourself if your current setup can handle order growth of 20%, 50%, 100% or 500%. This is especially true for warehousing, logistics and processes.
We have simplified the structures of PPC campaigns for our client TonerPartner. As a result, automation has increased. After these adjustments, exporting was cheaper and preparation took less time. Total revenue increased by 93% year-over-year and return on advertising spend (ROAS) increased by 71%.
The adjusted settings contributed to the faster expansion. However, if the client hadn’t fine-tuned their warehouse processes or shipping method, the reality would have been very different.
Preview of the TonerPartner website created for the expansion into the German market.
Choose a Market by Numbers, not Feelings
The key to exporting is to choose the right market. Foreign markets are not found randomly on a map or based on good relations with the home market.
We have had clients who have exported to 5 countries at once. However, they were not profitable. They had not calculated their costs properly and were at a loss after expansion. That’s why data-driven decision making is important.
You must evaluate which country has the most potential based on:
- Market size and growth of your segment
- Expected cost (average ad spend, cost per click)
- Competitive research (number of competitors, existence of comparison sites),
- Market specifics (tax, legal, local customs)
- Localisation (currency, payment gateways, carriers)
- Dominant sales and inspiration platforms (Amazon, eMag, Favi, Biano, Glami)
Analysis of Foreign Markets
A detailed analysis that takes into account all of the above considerations is necessary for expansion. We mainly use numbers at Dexfinity. Specifically, the Google exporting tool. It gives us and our clients fresh market information.
How does Google exporting tool work?
Let’s say you sell cycling gear. In Google exporting tool, you choose that you’re looking for data on that segment and select the metrics you want to consider when expanding:
- Industry size
- Segment growth
- PPC advertising costs
- Purchasing power of the population
- Search coverage of the category (in percentage terms, how many competitors are advertising in search in that category)
Google exporting tool can help you grow abroad.
Metrics can have different importance
The system of Google exporting tool goes even deeper and allows preferences to be assigned to individual metrics. For example, if you sell more expensive brands with high-quality products, buying power will be a substantial metric and add importance to it.
Select a region for expansion
In order not to track metrics for the entire world, the system allows you to pick a region. The countries with the most potential to export in your segment will be displayed based on the metrics, their importance, and the chosen region.
The Power of the CEE Region and Germany
The CEE region (Central and Eastern Europe) has a huge potential for expansion and we have the experience to prove it. Transporting goods is relatively easy and it does not cost much.
Successful eshop in Germany
The German market is close to the CEE region and is a mature and extremely competitive market. If you are exporting from a small country like Slovakia, even a small percentage of it often means a higher turnover than in your home country.
Read about our client INSPIO. Together we managed to drive sales in Germany from 0 to 500 in 2 weeks.
The demanding German market is a challenge for any ambitious eshop. Do you dare to conquer it?
How long does it take to prepare for export?
Ecommerce expansion does not usually concern one market only. Our clients normally expand their businesses to four or five countries. We add countries gradually, but sometimes it is possible to expand into two at once.
From deciding on a suitable market to profitability, it takes about 3 to 6 months. Sometimes we can do it in two. It all depends on the capabilities of the eshop.
If the eshop handles everything itself, the process takes longer and tends to be more expensive.
What (not) to do before the expansion?
- Don’t venture into exporting on your own. You will save a lot of time and money.
- Don’t export to countries you like, but to those where it pays off according to real data.
- Don’t delay expansion unnecessarily. The sooner you start, the better chance you have, so your competitors will not overtake you.
Look for a Partner, not just an Agency
It is no longer true that the only thing an eshop needs to expand is marketing. A reliable partner is especially important. An ally that has proven experience in different areas of the business.
How to find a business partner that takes your ecommerce to another level? Results are important. Check what they have achieved and you will know if they are right for you.
Get your finances in order
Clients usually don’t know their true financial metrics such as profit, margin or hidden costs. That’s why we also help with creating a financial analysis at the beginning of the cooperation.
The numbers don’t lie. They reflect the real situation: a mirror of the possibilities of your eshop. You need to know your actual profit and be able to double your current turnover.
Exclusive data with Dexfinity
Thanks to our quality data, we export with our clients even to countries that are unreachable at first sight.
We discover the best country for your segment and get information about the local competition. This will give you the answer to the hardest question – where to export?
Are you interested? We will prepare an analysis of a suitable market tailored to your business. Free of charge and without obligation.
Thanks to the Dexfinity Editorial Staff for Creating This Article
Proposal: Petra Dudášová
Authors: Samuel Ondrišák, Dárius Polák, Petra Dudášová
Redactor: Adriána Černáčková
Editor: Martin Bartl
Translator: Mária Streďanská
Published by: Róbert Hošták
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