Costco and Zara are two of the latest Western brands to open online stores in China via Alibaba’s Tmall marketplace.
They’re hoping to follow the success of companies such as Apple, Burberry and Marks & Spencer which have used this route to reach millions of consumers.
With ecommerce growing fast around the world, more British and American companies are shifting their focus overseas. And often marketplaces and other sales channels are the key to reaching a global audience.
Although these sites are particularly important in Asia, a multichannel strategy can also smooth the path to reaching new customers in Europe and the Americas.
Exporters are increasingly using online marketplaces, comparison sites and social media to increase their global visibility and maximise return on investment.
For more on this topic, read our posts on why Western brands are flocking to Alibaba’s Tmall and how Clarins is using WeChat, Baidu and Tmall to expand in China.
Choosing the right channels for your products
With more choice than ever before for both retailers and consumers, the idea of juggling multiple channels can seem daunting to many smaller businesses. Choosing the right channels will often depend on the maturity of a business, its target markets, and whether it already has a presence in the target country.
Zara already has a network of stores in China, but chose Tmall exclusively for its web presence, while Costco saw Tmall as a low-risk, low-investment way to get an initial foothold in this market.
At the other end of the scale, small companies often find Amazon and eBay’s international options are the easiest ways to test the waters in new markets.
Ebay boasts a huge global reach, with 124m potential buyers around the world and direct access to buyers on our European, North American and Australian sites.
As well as its 14 dedicated international sites, it reaches buyers in 208 countries. Merchants have varied options for customising their online store, translating and localising their listings.
Amazon also has dedicated marketplaces in a number of countries, with more than 2m businesses, from small retailers to well-known brands using this channel.
As well as these two giants, a growing number of retailers including Sears and BestBuy have branched out to offer their own community marketplaces.
For niche products, there are other options such as Newegg, aimed at technical products, and Etsy, for handmade crafts and similar products.
These marketplaces offer an easy route to reaching international customers – making it simple for them to find products, and reducing issues such as payment integration. It’s still essential to research all the associated costs, local regulations and shipping options.
China has been a notoriously difficult market to crack for many European and American businesses, Using marketplaces is often the best way to reach its vast – and growing – online population.
Alibaba has attracted a huge amount of attention since its IPO in September. It owns Taobao and Tmall, which dominate ecommerce in the country, and broke worldwide sales records last November on “Singles Day”. As well as these two, Alibaba also runs a global wholesale marketplace and Alipay, which is similar to PayPal.
In Japan, the major ecommerce player is Rakuten, which reaches millions of customers and is now branching out to the USA. It offers companies an easy way to personalise their brands, and even host their own blogs on the platform.
And in South Korea, Auction, Gmarket (now owned by eBay), and 11stStreet are among the leading ecommerce channels.
The growth of social commerce
Social media has become much more than just a way to connect with friends. It’s increasingly a focus for marketers. In China, Taobao and Tmall are starting to see competition from Tencent, the social media giant, which is looking to grab a share of the ecommerce market.
The lines between social networks and ecommerce sites are blurring in many markets. Line, a messaging app owned by Rakuten, launched its LineMall shopping app last year, while in China, Tencent’s WeChat offers customers the chance to link their credit cards to complete transactions.
At the same time, customers are increasingly engaging with brands via social media, looking for special offers, reviews and recommendations.
This is particularly true in some overseas markets. For example Brazilian and Indonesian consumers are especially likely to follow brands and look for social media recommendations when buying products.
As cross-border ecommerce continues to grow, more and more companies are exploring new sales channels to reach fast-growing overseas markets. Using online marketplaces can be an easy way to get a foothold in a new market, while an integrated approach can help engage customers and build your brand.