How Are The Biggest eCommerce Companies Establishing Themselves In Foreign Markets?
International eCommerce is the future for online business. The world’s most successful companies are operating online and in multiple markets, industries, and geographies all at once.
Let’s take a look at some of the biggest global eCommerce companies and how they’ve implemented foreign expansion strategies to exponentially drive sales.
The Big Players
Amazon. When we think about eCommerce giants in general, Amazon is the first to come to mind—and for a good reason. It’s the largest retailer bar none, and it’s consistently one of the fastest growing businesses in both America and foreign markets.
Amazon isn’t the only one expanding across the globe fast and furious. Alibaba and Rakuten are also growing at a rapid rate globally.
Alibaba is the largest eCommerce platform in China—and China is considered the largest eCommerce audience in the world (it finally inched the U.S. out of first place last year).
Rakuten is the Japanese equivalent of Amazon, and it has been aggressively acquiring global companies in recent years. In fact, it’s acquired a total of $4 billion in worldwide companies to date.
Walmart, JD.com, and eBay are also considered some of the strongest eCommerce companies across the world.
Walmart is Amazon’s biggest competitor, operating in over 11 countries and geographic regions. Their greatest competitive advantage comes from low prices at high volumes, selling like warehouse sellers but with a brand name.
JD.com is a Chinese company similar to Alibaba, allowing consumers to sell directly to one another.
image via Shutterstock
eBay is the king of consumer-to-consumer commerce, which means they can focus on expanding the platform itself, rather than on expanding their product line or private labels. This gives them a unique avenue when working to understand their worldwide audience and markets.
These global eCommerce players all have a few things in common—and it’s nothing you can’t replicate in your own business. So how have they established themselves as the strongest e-businesses worldwide, and how can you implement these methods in your own online business?
1. A Growth Mindset
These global companies won’t share small little tips or tricks that bring them to success. Their growth originates from a mindset that’s ingrained at the core of their company culture. Amazon, Alibaba, and Rakuten especially have a shared strategy: growth-at-all-costs. They are focused on aggressive growth at the expense of short-term profits.
Amazon started as a bookstore. Now, they’re in just about every industry in every major market worldwide. The company wasn’t even profitable until 14 years after its inception. For over a decade, they took hit after hit in the name of expansion—and it has paid off tenfold.
Walmart is a staple of American retail—but they’ve grown worldwide using a similar mindset as Amazon. Their mindset is to grow, grow, grow, but their competitive mindset puts them up against Amazon. This competitive nature actually has Walmart expanding at a faster rate globally, even more so than it has in the past.
What does this mean for you? You need to put expansion within your mission statement, and each strategic action should revolve around this kind of growth. Make decisions from the standpoint of endless progress. Product development, marketing, hiring, and logistics should all come from that same mission.
2. Private Label
Resellers can only grow as fast as their parent company grows. Although most of the big players in global eCommerce are selling platforms, they also create their own labels as well. This gives the company control over their brand, while also enabling them to expand at their own rate without having to wait for their third-party sellers to catch up.
Plus, consumers around the world like buying private labels. Customers know that these products are usually made in the same factories as the “big brands,” so they can get a similar (or same) quality at a fraction of the price. They also trust large eCommerce retailers like Amazon and Rakuten, because they know the level of quality and customer service that comes with these brand names.
For example, Amazon sells over 76 of its own private-label brands in a variety of categories. Everything from Alexa to clothing brands to AmazonBasics, they’re offering affordable Amazon brands to match and exceed their competitors. Amazon also has private label operations, like FBA, Amazon Web Services, and Amazon Logistics. This has allowed Amazon to maintain full control over its supply chain from start to finish, even operating on a B2C and C2C platform.
Walmart has been private labeling for years (albeit behind the scenes more than Amazon). There is even a not-so-subtle private label war between Amazon and Walmart. Why? Because these companies see that there’s serious money to be made in private labels backed by their well-known brand names.
If you want to break into new markets, you almost always need to have your own brand and label. (Or you at least need a sole foothold on a product in another country.)
For some companies, they choose to go a different route: acquisitions. Rakuten, for example, has acquired Viber, banks, credit card companies, a travel agency, an insurance company, and even a matchmaking service. With over 60 other businesses and countless investments (like Lyft and Pinterest), they’ve opted for horizontal expansion across a variety of channels. This turns them from a product-based company into a branded giant.
Moving into a foreign market is more likely to fail if you just go in with one or two products to sell. Even if the market is perfectly primed to buy your products, at some point (in the near future) you’ll saturate that market. You’ll constantly be looking for the next thing, and you don’t want to be behind the game while in the middle of expanding.
Lasting growth is twofold:
Gain a foothold in foreign markets
Continuously expand your offerings within those markets
Whether you expand vertically or horizontally, you want to be on the lookout for new avenues of revenue. This doesn’t mean you enter into a new market and start changing the entire game (especially if you’re a small business). But this means you keep your eyes and ears open to find unique options that align with your brand while bringing in new revenue.
International companies have a durable foundation and strong leadership. Their leaders have to be fearless in how they approach global expansion. You can’t imagine Jeff Bezos wavering about whether or not it’s a good idea to look into the Chinese market.
Check out some of these quotes by the top leaders in the global eCommerce world to get inspired:
“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.” – Jeff Bezos, founder, and CEO of Amazon
“Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish.” – Sam Walton, founder of Walmart and Sam’s Club
“No matter how tough the chase is, you should always have the dream you saw on the first day. It’ll keep you motivated and rescue you from any weak thoughts.” – Jack Ma, founder of Alibaba
“You’ll fail at some things—that’s a learning experience that you need so that you can take that on to the next experience. What you learn from those challenges and those failures are what will get you past the next ones.” – Pierre Omidyar, founder of eBay
If you don’t plan to win, you plan to fail. So you need to have a strong strategy in place when you make a business move overseas. You’ll want to consider every facet of expansion from product offerings to target audience to currency to taxes and regulations and beyond.
There are a lot of moving parts when you go overseas, so you’ll want a supportive team behind you. This means creating a strategy, hiring a local and global team, and bringing on consultants like Seller’s Choice to innovate at a higher level.
Foreign expansion is the inevitable step for any successful eCommerce seller. An international stage offers more opportunities for growth and revenue that your domestic market may not be able to match. This kind of mindset and approach to expansion is bound to help you see success:
If we’re not expanding, we’re shrinking. If we’re not growing, we’re dying.
You don’t have to be Amazon or Alibaba giant to see major success in foreign markets. But if you adopt their action plans and strategies, your business can skyrocket to new heights cross-borders as well.
Have you looked into international expansion? What’s holding you back? Give us your input in the comments below.