International Shipping: Are all markets accessible?

05 March, 2020

If you're familiar and comfortable with shipping your goods around Europe and the UK, that's probably because we enjoy established distribution networks, recognizable and respected online payment gateways, and progressive laws and regulations in regards to cross border trade.

Unfortunately, many countries around the world have yet to catch up; some are even entirely inhospitable when it comes to e-commerce. However, developed markets and countries that enjoy a prosperous e-commerce environment don't necessarily signify guaranteed success for your business either. Remember, there's product competition and established industry norms which may limit your ability to infiltrate the sector you are interested in.

Let's take a look at some of the trickiest markets to break into and what you would need to do in order to turn a profit from your e-commerce in that destination.

What affects a country's ability to participate in e-commerce?

To understand why it may be challenging to enter specific markets, it's essential to have some insight into the environment of these destinations and the root cause behind the barriers.

Common issues:

  • Lack of online security resulting in loss of faith in making e-commerce transactions from both the customer and business side.
  • Inefficient postal services and infrastructure limiting a company's ability to reach customers in remote locations.
  • Insufficient adoption of technology and shopping via electronic devices.
  • Economic and political issues preventing cross-border trade.
  • Threats of war and social instability.

According to recent rankings, the five countries that showed the least readiness for online shopping are:

  1. Niger
  2. Chad
  3. Burundi
  4. Comoros
  5. Democratic Republic of Congo

Each of these countries has its fair share of economic and political setbacks which limit their ability to develop into viable marketplaces. Paradoxically, it is precisely these types of economies that could benefit from the financial growth that e-commerce inevitably spurs. This happens as a result of job creation, a drive for improved infrastructure and more empowered customers.

How to tell if a country is ecommerce ready?

When assessing the potential for e-commerce in a location, a good starting point is to evaluate the figures of active internet users, the number of banked individuals with access to a credit card, the availability of secure servers, and the postal reliability score of the country.

Naturally, the next step is to analyse the political and economic climate. It may be worth consulting with trade specialists to gain awareness of any upcoming changes to policies, the duties and taxes imposed on imports, and other fact-based predictions which may have positive indications for e-commerce. From here, you need to delve into the logistic capabilities of the region to review the existing transport links.

Key features of the top 5 markets

The Global E-commerce Market Ranking 2019 report listed the following countries as the top 5 markets for e-commerce:

  1. America
  2. China
  3. United Kingdom
  4. Japan
  5. Germany

What makes these destinations so attractive to e-commerce businesses?

The report looked into metrics concerned with logistics, average revenue per shopper, total market revenue and the number of online shoppers. The percentage of cross border shoppers was also reviewed as an indicator of the countries' openness to making international purchases. Sales in these regions equate to billions of USD, making them top targets for businesses looking to grow and expand by taking advantage of the existing positive markers.

It's essential to acknowledge, of course, that competition in these destinations is fierce. Early entry and a strong branding and marketing strategy are required in order to gain engagement and support from audiences. The advantage is that there are tried and tested paths that will make setup and initiation of your online retail store easy and straightforward when compared with less established markets.

Destinations that are hard to ship to

There's plenty of online discussion about which countries throw up the most challenges when it comes to shipping. Brazil quite commonly tops the charts; this is largely due to the VAT and taxation regulations which make importing to the country problematic. Corruption and bureaucracy surrounding the shipping process are often enough to put off even big contenders. Other parts of South America suffer from the same restrictions; Argentina, for example, has a costly taxation system which hinders trade into the region.

Russia presents different obstacles related to its geographic size. Delivery times can vary, and hold-ups at customs can prolong the shipping process even further. Lack of transparency when it comes to documentation as well as a disinclination towards the incorporation of technology into the crossborder checking process inhibits progress where international e-commerce is concerned.

While China comes out as a top e-commerce destination and a very lucrative market, tax and import restrictions are also an issue here. Quick and efficient deliveries are often costly, leaving sellers in a tricky situation when it comes to deciding how to factor in shipping costs. For political reasons, clearance at customs can delay your deliveries, or they may not even make it to the nominated recipient.

Getting ready to go global

Before you set off on your international e-commerce venture, thorough market research, expert consultation, and a good understanding of your own capabilities as a business are necessary.

The type of product you sell will largely determine how you approach the market you are considering. You'll have to check if the culture and societal norms of the region work with your current marketing strategy – and if they don't, what are the implications?

Above all, it comes down to cost – for both you and the customer. If the country lacks the logistical infrastructure to make shipping affordable and safe, the risk may outweigh the benefit of the sale.

E-commerce depends on the penetration of the internet in the region and the rate at which users are adopting technology as a means of making purchases. As we discussed, however, even flourishing digital economies will present challenges if you do not have the backup of sound local industry knowledge, cost-effective shipping methods, and brand that inspires trust and commitment from the consumer.

At Asendia, we have over 20 years of experience with international shipping and distribution. Speak to us if you'd like more information on any destination you are considering in your e-commerce expansion strategy. One of our experts will be able to supply you with relevant information about the possibilities of shipping to that region, as well as work out the best rates for postage. We offer a comprehensive service that could enable you to outsource many of the time consuming and expensive tasks involved in cross-border logistics to us. We can handle packaging, warehousing, labelling, shipping and even returns. Get in touch with us today.

To find out more about our international shipping service, get in touch with the team here at Asendia.