Emerging markets face many barriers to the development of ecommerce but they also offer the most growth potential in this sector, particularly for cross-border commerce.
Frustratingly, many developing countries also offer additional logistical challenges to the aspiring vendor. Communication plays a key role in overcoming logistical challenges in any transaction situation but it’s especially critical – and especially complex – when you throw in the difficulties of operating across different languages.
Take Russia for example. Russia represents considerable online sales potential for foreign brands. The consumer market is underdeveloped, yet there are wealthy customers interested in purchasing foreign goods such as fashion and electronics.
Russian ecommerce shoppers tend to be wealthier, younger and have more sophisticated tastes than your average Russian. On the flip side, the market is geographically large, infrastructure is poor, and the postal system leaves much to be desired. Many consumers are new to ecommerce in this market and may need additional support or encouragement. All in all, it’s a good example of the challenges and opportunities offered by emerging markets.
Ebay only very recently set up a Russian-language version of its service, and Alibaba is also new to the market. The emergence of localized sites in the local language obviously makes huge strides to open up ecommerce to a wider audience but there remain significant communication challenges associated with the logistical operations that are not immediately resolved by a localized website.
Communication starts with the customer
Communication is absolutely central to getting the logistics right. That includes communications with the customer, as well as all parts of the supply chain.
Customers need to be made aware of how the transaction process works and their expectations need to be managed. It isn’t sufficient to translate existing materials into the local language; other aspects such as size guides and currency also need to be taken into account.
Expectations also tend to vary from country to country. Chinese online shoppers are accustomed to very short delivery times, sometimes even same-day delivery. If you’re shipping from overseas you’ll need to communicate this clearly early on to avoid disappointment at a later stage. These messages all need to be conveyed appropriately for the audience, rather than merely translated.
There seems to be a higher level of suspicion associated with cross-border transactions, with many customers reluctant to give their details to third party couriers such as i-parcel or Pitney Bowes Global Shipping Programme, or unable to correctly format their address to ensure delivery. That’s why managing the customer is a key part of good logistics to smooth the information-gathering process.
In many cases customers need to be guided to enter their address details in the correct format for their goods to reach them, or they’ll need to supply additional information for customs. Customers are often a weak link in the logistics process as they fail to understand communications that are sent to them.
It’s also worth remembering that not all of your audience will speak the official language of that country and even if they do, it may not be their mother tongue or the one they speak at home. A proportion of the audience using your ‘localized’ site may be operating in their second or third language. So, in many cases, it’s worth catering to these languages too.
To use the example of India, whilst it’s difficult to get accurate figures it’s thought that between 25 and 40% of the population can speak Hindi. However, 59% of Indians do not have Hindi as their mother tongue. If your website is in Hindi, it’s likely that many users will be operating it in their second, third or fourth language.
Only a small number of Indians have English as their mother tongue but many Indians will speak English as an additional language. However, rates of speaking the country’s official languages (Hindi and English) vary greatly.
Men tend to be more likely to speak English than women, and tend to be more fluent in it when they do. It’s also much more common for urban dwellers to speak English than those living in rural areas.
This adds an additional layer of complexity to website localization, and to your supply chain when you are operating across different areas of India where different languages dominate. There are an estimated 415 living languages in use across the subcontinent. Don’t make the mistake of assuming you just need to translate into the official languages if you want to sell into a market like this and gain customer confidence.
Educating the customer
Whilst many vendors are using the approach of outsourcing to a logistics service such as i-parcel, it’s still essential for the vendor to communicate effectively with the customer and educate them about the delivery process, even if they aren’t handling it themselves.
Amazon may let i-parcel manage its cross-border logistics but Amazon itself still needs to field enquiries about the process from confused customers even when it isn’t handling the delivery itself.
Supply chains are only as strong as their weakest link and cross-border deliveries have a large number of links in the chain, any of which can fail. Increasing global trade, particularly online, means that supply chains are becoming more and more complex, often spanning many countries while remaining critical to an organization’s competitiveness.
Logistics will play a key part in unlocking the potential of emerging markets for cross-border commerce. There’s huge potential to sell into these markets but this is coupled with mistrust and cynicism on the part of the consumer, particularly in markets like Russia with a poor-performing mail service, about the ability of the seller to deliver to them successfully.
Logistics performance is strongly associated with the reliability of supply chains and the predictability of service delivery for both producers and exporters. Reliability and predictability are crucial to the takeoff of ecommerce in markets such as these ones.
Many retailers have found that finding a local partner fluent in all aspects of local logistics to be the most successful strategy. Argos collaborated with Haier to create a new multi-channel operation in mainland China and to take advantage of the Chinese electronics manufacturer’s existing franchise network for buyers to collect products ordered online. Tapping into existing logistic networks, rather than trying to establish new ones, circumvents many start-up problems when entering a new market.