One of the challenges of e-commerce is international expansion, and how exactly one goes about it. There are complications around websites, language, SEO, tax and how to integrate with back end systems.
We have spent a lot of time working it out here at Flowers HQ, as we now service not only the UK flower delivery market, but also those of France, Germany, The Netherlands and Belgium. Here are three of the key areas to think through before you embark on your international roll out:
1. One daddy domain or several?
This is absolutely key.Do you want to have all the different countries you service on one website or do you want to have separate websites for each country? There are pros and cons to both approaches.
One website to rule them all
The biggest benefit of this approach is that you only have to market this one website: this can be beneficial in particular in terms of simplifying PPC and making SEO easier (as you only have to build the domain rank of one domain, not numerous domains).
Please note that if you use subdomains for each country (eg http://france.yourcompany.com and http://uk.yourcompany.com) search engines will treat these all as separate sites so you will not get this benefit.
In tools such as Google’s Webmaster Central, you can also tell the search engines that certain folders and areas of your website are targeted at different countries so it knows where you want those pages to rank. There could also be benefits in terms of back end integration as the new countries would be running off the same back office as when you only served one country.
Targeted, local websites
This is the approach we have taken, and we now have five international flavours of Arena website (eg http://www.ArenaFleurs.fr) to go alongside our original UK website. We believe the benefits of the multiple site approach outweigh the extra marketing and web development investment required:
A local experience
People are local and it is our belief that seeing a site in their own language on a local TLD, with local language used in the domain name (eg Arena Fleurs vs. Arena Flowers) will help conversion rates.
Having a single site for a single country says that you are taking that customer and their country seriously and reduces the risk of being seen as a faceless organisation just keen to monetise them as part of a broader European strategy.
Having separate sites also gives you more flexibility in how the site is built and allows the customer experience to be smoother: you can offer the local currency; you can have a local 0800 number across all pages of the website (even if the call is then routed to your call centre in the UK); you could put a local address for snail mail; you can present local order cut off, delivery and payment options in checkout (eg we offer the “Ideal” payment method on our Dutch site and “ELV” on our German site).
To be even more tailored in countries with multiple native languages (eg Belgium where they speak both Flemish and French) you could have two separate sites, one targeting the Flemishspeaking community and one targeting the French speaking community – we’ve actually done this and have both http://www.ArenaBloemen.be and http://www.ArenaFleurs.be, so that we can address both segments of the Belgian nation.
Whilst indicating to Google in Webmaster Central that the French folder on your .com site is targeted at France is helpful, not all search engines have this facility and, even if they do, a local website ending in .fr may well, all other things being equal, rank higher than your site in .fr search engines.
Being on a local TLD should also make it easier to get links into the site and to do partnerships with local organisations (eg relevant local directories).
Cross fertilising sites
You can also then use your local sites to sell the other local sites’ products. For example there is a page on our French site that allows you to buy products for delivery in the UK.
The French customer will have a fully “French” web experience (language, checkout, currency etc) but will, effectively, be buying from the UK site. This is complex to build but should reap benefits of higher cross border sales rates between the company’s web assets.
Ultimately, which approach you should choose depends on the level of investment of time and effort you are prepared to make. The first approach of a single site for all countries is certainly the easier way to ‘dip a toe in the water’ but the second approach should, in my opinion, be the ultimate goal.
2. Subsidiary or no subsidiary?
It is perfectly legal for a UK company to trade in Europe without having a locally registered company. For a number of reasons, however it might be helpful to set up a local subsidiary in the relevant country.
The most significant reason is a practical one: often local suppliers (eg couriers) will simply not talk to you if you do not have a local presence. This can be frustrating given there is no reason that they should not, but it is a frustrating reality.
Depending how important local supply is to your business, it is worth weighing up the benefits of a local company against the set up, administrative and accounting costs associated.
Under distance selling rules within the EU a company registered in one country can send goods over the border into another EU country and still charge the local VAT rate of the country from which they sent the goods. For example, sending from the UK (top rate currently 17.5%) into Germany (top rate currently 19%), a UK company delivering from the UK into Germany should charge the customer 17.5%.
However, this only applies to a certain amount of trade. For example, once a UK company has sent 35k Euros of goods into Belgium, the UK company must then register for VAT in Belgium and begin charging customers sending goods to Belgium the relevant Belgian VAT rate (and pay the VAT over to Belgium tax office, not the UK tax office). This is designed to prevent companies in countries with lower VAT rates from competing unfairly with local companies.
The VAT rates and the thresholds after which registration is required vary by country and they are subject to change so checking for latest status is important (don’t rely on me!).
In practice, these finesses makes for quite a headache as products sold on a UK site going into another country will have to be able to have their VAT rate changed at some point in the future. It’s not an issue when starting out, due to the thresholds, but it’s worth bearing in mind and letting your developer know; they won’t thank you if you land that on them with only a few days to implement the change!