When times are tough in business it is easy to think about sustaining your position rather than trying to expand it. However, it is often the case that companies which capitalise on potential growth at a time when others deem it too risky have the biggest returns.
One of the best ways to bring more profits to your business is by expanding it to other countries. Here are the top 3 nations for e-commerce businesses to enter over the next 12 months:
1. China
Not much of a surprise here. China's online retail market is one of the fastest growing in the world. According to a survey conducted by PricewaterhouseCoopers some 70% of Chinese respondents shop online at least once a week, which compared to 40% of UK consumers looks even more astonishing than as a standalone figure. The number of people connected to the Internet is rising sharply too and if the percentage of those shopping online stays the same as new users get connected, then this country will become even more of a goldmine. Last year 457 million Chinese were online with 145 million of those doing their shopping on the web. By 2015 it is expected that some 329 million people will be making online purchases in this country.
Despite the clear opportunity there are a few things currently putting businesses off entering the Chinese market. Firstly, the way marketing is done here is very different to what we see in Western countries. Google is pretty much non-existent, so companies need to invest in building a presence on the local search engine - Baidu. In addition to this any e-commerce business entering China will need to deal with the not very fair competition from Taobao. This is an equivalent of Amazon, only its dominant position is even stronger, as 79% of all online transactions were made through this website in 2010.The problem is magnified by the fact that Taobao blocks Baidu from crawling its pages, meaning that majority of consumers would start their shopping by going directly to that retailer rather than using search engines. This is seen as a huge stumbling block by many entrepreneurs. However there are signs that the stranglehold Taobao has over the online market in China is beginning to give way. Now could be a great time to give China a much closer look.
2. Brazil
Was recently named as one of the top three most important countries for growth prospect, which says a lot. There are many reasons for that. For a start fast rising numbers of people getting connected to the Internet has meant a spike in online shoppers. Currently 37.4% of the population in the country are connected, that is nearly 76 million people. In addition the number of retail transactions made in Brazil in 2010 was 24% higher than the year before. With Brazilian economy as a whole racing ahead, it can be expected that this positive trend will be reflected by the e-commerce market.
Getting products delivered to this South American giant is also becoming much easier, with fulfilment companies finally capitalising on the potential here. As the infrastructure improves, the potential for further growth will increase as a result. Getting a presence in this market early may bring huge returns in not so distant future.
3. United States of America
It seems like such an obvious choice that many do not consider it, simply assuming that the market here is reaching the point where it can no longer grow. That is far from the truth. From the start of 2010 e-commerce spending has been growing year on year by 13% on average. In 2011 the Americans spent a $161.5 billion online, that is a huge number and there is no sign of the upward trend stopping. When you also consider that the U.S. is potentially coming out of recession, which has hit many households, it makes this country look even more attractive to e-commerce businesses.
With 77% of the population connected to the Internet (239,893,600 people) this market is a lot more mature and ready to welcome new retailers. The competition may be fierce already, but there is still plenty of room for new players to achieve success.
Expansion to a foreign country is not easy at any time and it is crucial that each business does their own research. Not every product will find demand in various parts of the world. The above 3 countries however should be very exciting for any e-commerce retailer right now. If expansion is in your plans for the near future then they are definitely worth considering.
Eva works for PayPoint.net - Online Payment Solutions