Discuss marketplaces with those who manage brands and retailers, and chances are they immediately mention Amazon Marketplace. They may also mention eBay or Alibaba if they are interested in the Chinese market. But if you were to discuss marketplaces in Brazil, the first name to be mentioned would be far more likely to be Mercado Livre — that’s because it generated $2.2 billion in revenue in Brazil in 2020. In contrast, its challenger, Amazon in Brazil, generated $585 million in 2020. It’s a reminder that while digital commerce is an international business, all markets are ultimately a local one.
While consumers are increasingly happy to shop digitally across borders, they are still likely to turn to retailers and brands with a high local recognition factor. As a result, it’s necessary to give consumers a reason why they should consider shopping with a foreign-based company.
For brands that want to sell in new territories, it’s best to begin by identifying those marketplaces that will bring the best results, as certain marketplaces are more appropriate for brands operating in different sectors.
So how should brands decide which marketplaces to work with? Start with the following tried and true tips:
1. Start local and then go international.
A first point to make is that a brand that has yet to sell on marketplaces in its home territory seems unlikely to be successful at selling internationally. Because different marketplaces have different demands on sellers, it’s best to take a step back from the idea of trying to drive international sales. Instead, focus on the prerequisite for success: having control of product content so that it can be fed to where it’s needed in the correct format.
Employing a Product Information Management (PIM) system, typically working in conjunction with the brand’s ERP system, means data can be centrally managed. Once in place, content and the associated attributes required to expand internationally can be done instantly, ensuring consistency across marketplaces and other social channels. Translating and localizing product descriptions becomes far more streamlined and efficient while guaranteeing that the product content needed to drive international expansion is reliable and trustworthy. It also ensures that correct, locally checked translations can be held centrally rather than running the risks of ad-hoc or culturally insensitive mistranslations.
2. Research marketplaces and local market conditions.
Once product, marketing and brand content are centralized, the next step is to conduct research. Looking at the example mentioned above, Mercado Livre, while it enjoys a preeminent position similar to Amazon Marketplace in the UK, does not represent a solution to selling in the country. Any brands targeting Brazil would still have to consider issues such as the overall economic landscape, local taxes and finding reliable logistics partners given the country’s vast and, in some cases, undeveloped regions.
It’s also critical to identify the fees involved in selling on the various marketplaces. While all typically charge a combination of set fees and commissions based on sales, brands also need to consider chargeback and/or refund fees. Reverse logistics are another consideration. Determine how much it will cost if a customer returns an item, and if any local laws require brands to accept them within a specific time limit, as these can impose significant and unexpected costs when entering new markets.
3. Consider marketplaces based on sector.
In contrast, Europe’s largest fashion marketplace, Zalando, had nearly 8 billion euros/over $9 billion worth of revenue in 2020. Despite its reputation for carrying more than 2,000 brands, with a median price of $54 per item, Zalando gives consumers the feeling that it is curated for them and, therefore, offers a better option for many European clothing brands.
4. Leverage internal expertise.
Delivering and quickly syndicating product content and digital assets is critical to succeeding on many marketplaces available worldwide. PIM technology generates consistent data that is distributed in internationally recognized formats. This data can then be used not just to feed the likes of Amazon Marketplace but other channels and marketplaces too — helping brands capitalize on this critical and highly lucrative channel. But these unique sites have different demands, so brands need to be sure that the data they supply, including product content, images and videos, is 100% consistent and accurate.
Jennifer Krizanek is CMO at Contentserv, a leading provider of personalized product experience management solutions that enables brand owners and retailers to easily manage and optimize product information. To learn more, visit them at https://www.contentserv.com/en/ or follow them on Twitter @contentserv.