Jun 07 2018

Globalization Strategies: IRCE Session Recap

Markets tend to develop along the same path: First, users come online for communication and entertainment, then business, then buying from large, trusted brands, then smaller needs like electronics and books, and finally more touch-and-feel categories. In this IRCE Session Recap, we’re going over a session on globalization featuring Lily Varon from Forrester and Lee Zenderov from Richline Digital. Varon started off the session with an eagle eye view of global markets and where they are today.

Each country in Latin America falls into different ecommerce phases. Brazil’s ecommerce market is more than twice the size of Mexico and Argentina combined. Brazil had experienced a period of slower growth, but that appears to be waning. Argentina had issues with regulations that cause delays in market growth, but is now improving. In Asia Pacific, the big story is China. Forrester predicts that it is going to be the first one-trillion ecommerce market in the world (it surpassed the US as the largest ecommerce market in 2015). Korea and Japan both have mature markets and India is growing as well. In early stage markets, the growth rate is around 20-30% per year. In mature markets, that rate is closer to 10–12%.

There are three strategies to reach new markets in APAC: cross-border shipping, marketplace storefront, or a localized direct site.

Richline‘s Move Into China

Lee Senderov is the EVP and General Manager of Digital Richline Group, one of the largest jewelry companies in the world. The group owns three direct to consumer brands under one umbrella:

Gemvara – bespoke creations
Jewelry.com – value-priced closeouts
Silpada – everyday silver

Between the three brands, the group has executed two out of the three strategies.

Among the many critical success factors for expanding to China are partnerships. You can have a TP (trade partner) or you can bring it internal. Whether you build an internal team or have a TP, you will need someone who speaks the native language of Mandarin. Having a native Mandarin speaker has many benefits, including providing key cultural insights that may not occur to you otherwise. For example, the average ring size is much larger in the US. Before hiring an internal native speaker, Senderov would get whatever data they sent every couple of weeks. Now, she can pull custom reports whenever.

Moving away from China

So you want to globalize, but how do you prioritize markets? For Richline, the team began with analyzing English-speaking countries. Because of previously established brand awareness and the ability to reuse English-based promotional materials, companies can expand without worrying about how to drive traffic to site. Second, they examined how they would build a robust product strategy in each market. Then, they looked at established European markets, like France. Additionally, Senderov looks at traffic analytics. On a property like Silpada, they don’t have va high volume of traffic from overseas, but for robust SEO properties, that works well.

There are a number of questions that need to be addressed. For example, should you consider entering the international market with a retailer to build the brand in that market before investing in its own site? You need to look at globalization holistically, not just as a digital strategy.

Senderov used the example of football clubs and the strategies they use to choose localized sites. Historically, the clubs have gone after large, developed markets that neighbor their own home but have competing clubs. Recently, they looked at markets with rabid sports fans, but no strong competitive local clubs.

For Richline, the next step will require more insights. When it comes to direct to consumer, the goal is building better BI. For example, without BI, Richline wouldn’t have known that consumers in Europe do not buy pendants. However, better data requires making sales on your own site. It’s about getting better customer visibility and that’s even bigger than globalization.

Matthew Rickerby

Head of Marketing

Matt began his career in ecommerce at Blue Acorn over seven years ago. His areas of expertise include persona development, account-based marketing, and content marketing. He has co-written speaking sessions for Bronto Summit, DIG South, GIANT, and Revolve, and received multiple awards for videography, blogging, and copywriting.

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