Paymill has published a report on challenges facing online retailers before they expand to other countries.

The Munich-based payment service provider highlights a number of factors worldwide retailers should take into account before expanding.

The global e-commerce industry continues to grow. According to the Global Retail E-Commerce Index by A.T. Kearney, the global market volume is estimated to grow 18 percent, up to €994 billion, by the end of 2015.

While online retailers enjoy a lesser barrier to entry than physical retailers, there are still factors to consider when expanding internationally.

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Localisation

While businesses often consider translation as the first challenge in a new market, local customs and cultural norms must also be taken into account. For example, a clothing website may need to provide different styles for different countries. If they are considering breaking into a conservative market, they should display suitable products accordingly.
Payment methods must also reflect the preferences of the country in question.

Operating Challenges

Different markets bring with them different laws and regulations. Taxes and customs can vary from country to country. Digital products are one area where taxation can be challenging. In Europe, taxes used to have to be applied to the vendor’s home country. Now, they must be applied in the purchasing country. This means retailers may have many different tax rates across Europe.

Online retailers should sign up at the VAT Mini One Stop Shop (MOSS) and transact sales taxes in the seller's country.

HR & Translation

Language can present challenges. Retailers may need to consider employing staff in the target country to provide customer support. Marketing must be tailored to communicate with the target audience, and in their own language.

International expansion needs planning and careful consideration. Markets should be chosen based on examination of the cultural norms, and the competitors that exist there. Once all factors have been examined, global expansion can yield success.