Amazon Strategy for Internationalisation
For business owners around the world, the question is always the same: “how can I grow?”. Internationalisation is one answer to that question—especially for sellers on Amazon.
In this article, Luzern eCommerce explains how Amazon stores can expand and target a foreign market. For those selling with the online retail giant, it’s easy to go global: the platform offers many opportunities for cross-border selling.
As local markets will differ, however, it’s important to consider whether your next venture is the right one. Read on to learn how to pick the most suitable international market for your brand.
Considerations in Using Amazon as a Pathway to Foreign Markets
Each market comes with its own unique consumer behaviour, and conditions that affect Amazon’s popularity in the marketplace.
There are many different factors that affect how popular Amazon is as a marketplace. One of the most important aspects is consumer behaviour: which changes from country to country. For brands, it’s a great idea to do your research before deciding where to expand; the below factors are a great starting point for consideration.
Variability in the Cost of Amazon Prime
As a seller, you’re likely familiar with Amazon Prime. The subscription provides Amazon customers with free two day shipping, the ability to stream video and music, and other exclusive benefits. The cost of Amazon Prime differs depending on the location—and this can play a major role in sales for a particular market.
In the United Kingdom, for example, Amazon Prime costs £87.95 per year. Annual subscriptions cost £102.42 in the USA (amount converted to GBP for comparison), yet it costs the equivalent of just £12.00 annually in India.
As you can see, there is a major difference between markets - predominantly due to shipping costs, taxes and local currency exchange rates. Amazon also lowers their price in markets where adoption is low: this incentivises new customers to join Prime.
This has an impact on sellers for a few reasons: for one, you may have to pay listing fees per item. If your business has a large product line, this could add up - so it’s important to research this before putting your expansion plans into action. At the very least, you may need to revise your pricing model to account for Amazon Prime costs that your audience is paying. If not, you may find yourself at a competitive disadvantage.
While some customers switch between mobile and desktop devices, internet use is limited to smartphones in other parts of the world. If your business is looking to make the move into a new market, it’s a good idea to check the device usage trends for that location. Considering that 96.2% of internet users aged 16-64 own a mobile device, however, investing in mobile-friendly brand assets is never a bad idea.
If, for example, you are looking to expand into Poland or the Netherlands, your website and imagery would definitely need to be mobile-friendly — as 51.3% and 42.1% of all web traffic run on mobile devices (respectively). This means mobile traffic could comprise approximately half of your customer base. While Amazon is already responsive to mobile devices, you can increase your competitive edge in this new market by making the user experience as good as possible.
Here are a few ways to do this:
- As smartphones typically have smaller screens, check that your website content is displayed correctly in this size.
- Optimise your product descriptions to cater to the shorter attention span of the mobile user. On average, humans have an attention span of 8.25 seconds.
Top Categories for Amazon Users Worldwide
Depending on the location, certain categories may perform better or worse than others on Amazon. This can be attributed to differences in shopping habits from region to region: as well as being impacted by cultural and economic norms.
For this reason, popular Amazon product categories can help you forecast whether your business will find success in the region. Regardless of the quality of your offering, it will be difficult to succeed if local buyers have little to no interest in the type of product you sell.
With that said, there are some categories that are likely to be successful—whichever country you’re operating in. Products in these categories will be in high demand regardless of the market; as they are generally affordable for the consumer and can be shipped with ease.
Why Cross-Border Selling is a Shortcut to International Expansion
Cross-border selling is encouraged by Amazon, as it can expand your customer base as well as that of the platforms. For Amazon, it helps to ensure the availability of stock for key categories. Here’s how it works, and why it could be a feasible shortcut to global expansion for your brand.
Cross-border selling allows you to reach customers in neighbouring countries—with no need to re-establish a brand presence or localisation strategy. As these customers don’t have their own Amazon website, they purchase from nearby nations where the eCommerce giant does have an established website. Amazon’s monthly visitors in the USA, UK and Canada are greater in number than their respective populations.
For the customer, this generally means they can find more items, albeit at greater prices. For businesses, this results in greater profits.
How Luzern Can Help Your Brand Reach a Foreign Market
For brands selling on Amazon, Luzern eCommerce is a trusted partner and advisor. Our experts can help you in navigating the constantly changing eCommerce landscape by providing practical cross-border expansion strategies, designed to help you grow your online sales, profitably.
So What’s next?