SHARE

Most Popular Reads

Did you know that while in the U.S. the preferred online payment methods are AMEX, Discover, PayPal and Visa, but in Southeast Asia, Cash on Delivery (COD) is still the leading payment form?

Online shopping has become ubiquitous for anyone with an internet connection –– but that doesn’t mean expectations and preferences are the same across the board.

Sure, everyone looks at the pictures. They all click add to cart (in various languages of course). They all get to your shopping cart page.

But what happens next differs from person to person, and even more so from region to region.

As you launch internationally, you need to know which regions prefer what, when, where and why.

These differences may be minuscule, but they can be the maker or breaker of your cross-border success.

From payment methods to shipping to various technology, an integral part of your launch into new international markets will be acing the differences in the details. Let’s dive in.

The International Expansion Playbook

What if you are ready to invest in international expansion and localization to own a brand new market long before you competitors?

That’s what this guide will teach you to do.

Preferred Payment Methods Around the World

Unlike major credit cards in the United States, eWallets and COD reign supreme in emerging markets like Africa, Asia Pacific, the Middle East and Latin America.

Moreover, technology is driving new forms of payment. For example, in-app purchases through social commerce tools like Viber, WeChat, Weibo, WhatsApp and countless others are creating more seamless forms of payment –– quickly!

Here is what you need to know.

Expectations in China

According to eMarketer, the payment form of choice in China remains Alipay, though WeChat Pay, WeChat’s in-app payment method, has made astronomical gains since launching in 2013.

  • In the fourth quarter of 2015, Alipay’s market share was 68.4%. At that time, WeChat Pay was only 20.6%, according to figures produced by Analysys.
  • In the second quarter of 2016, Alipay claimed 55.4% of the mobile payment market and WeChat Pay 32.1%.
  • In 2016, Alipay and WeChat Pay remained ahead of their competitors, and even though Alipay still ranked first, its share dropped to 50.4% and WeChat Pay’s grew to 38.1%.

Additionally, WeChat users can use WeChat Pay when abroad to pay for offline goods and services (using a QR system in-app, much like the Starbucks system), as well as for payment on foreign websites.

WeChat Pay allows for payment in 8 foreign currencies, including the U.S. dollar and British pound sterling.

Expectations in India

In India, Cash on Delivery (COD) remains the most preferred way of payment.

Payment options like NetBanking, credit & debit cards and digital wallets combined contribute to only about 30% of all online purchases, as compared to Cash on Delivery (COD).

However, the Average Order Value (AOV) of online payments and cards is 20% higher than that on COD, showing that as ecommerce and digital wallets become more adopted, the use of COD should decline.

Expectations in The UAE and other Middle Eastern Countries

Similar to India, as of 2015, COD remains the key form of payment in the Middle East according to Statista, at 64% market penetration and usage.

Shipping Expectations and Preferences Around the World

The biggest factors that impact shipping expectations in foreign markets are:

  1. Delivery choices
  2. Speed

When it comes to delivery, consumers prefer transparency into the delivery process more so than selecting the actual carrier.

Delivery Choices

A study conducted by IPC found that when considering delivery choices, the biggest factors for consumers were related to saving money:

  • 86% of people wanting free returns or free delivery on purchases over a certain value, and providing more transparency on delivery costs.
  • 92% of people wanted clear information about delivery charges before purchase.
  • Only half of consumers found the possibility to select the delivery company to be important.

Delivery Speed

As marketplaces continue to dominate in emerging markets, they leave a resounding effect on the delivery speed expectations of in-country shoppers.

For example, many marketplaces have local means of distribution. In India, Flipkart has their own fulfillment centers.

In turn, shoppers in these markets have come to expect priority shipping.

This is also consistent within China and Japan, where 41% of consumers expect goods to arrive within 4-5 days.

This is another great argument for not just website localization, but even warehousing localization, which allows you to meet local delivery speed expectations and truly dominate a new market.

Technology Expectations by Region

Technology is playing a disruptive role in how people and products are connecting around the world –– similarly to how it has done in the U.S. over the last 20 years.

In the last 5 years alone, the adoption and penetration of ecommerce, mcommerce, digital wallets and social commerce have been driven by the consistent injection of emerging technology.

As technology becomes more easily accessible in emerging markets, look for small countries to become key players in the roadmaps of where merchants go next.

Internet Usage in Africa

Internet Usage in Asia Pacific

Internet Usage in Middle East

4 Examples of Regional Expectations Impacting Business 

The Middle East and Customary Traditions

Challenge

For brands that don’t consider socioeconomic factors such as Sharia Law, market penetration will remain cumbersome for those attempting to enter the Middle East region.

In Saudi Arabia, for instance, most women will not answer the door to men unknown to them — making it difficult for male delivery drivers to complete COD transactions.

Solution

Fetchr, a Dubai-based app startup, remedies obstacles unique to places like Saudi Arabia, where COD, in combination with other cultural factors — such as restrictions on interactions between unrelated men and women — complicate final mile delivery.

Fetchr’s solution has been to employ female package handlers, not only providing fulfillment solutions for retailers but also employment opportunities for women in the region. Being the first to employ female drivers in the Middle East, Fetchr currently offers solutions in the UAE, Bahrain and Saudi Arabia.

Credit Card Processing in Southeast Asia

Challenge

In Southeast Asia, credit card ownership stands at less than 7%. Additionally, more than 50% of the population is unbanked, making online payments altogether a daunting process.

Solution

Retailers must provide solutions that leverage AliPay and WeChat to better position themselves in an environment where, according to Google, over 30% of the region’s population access Internet via smartphone.

Retailers that have adopted this method, in China most recently, have decreased COD orders from more than 70% of total payments in 2008 to less than 21% during last year’s Singles’ Day mega sales.

Geography, Geography, Geography

Challenge

More than 70% of countries considered ‘hotspots’ or areas of interest for retailers are not safe or secure for final mile solutions.

In Southeast Asia, specifically Indonesia and the Philippines, retailers are faced with complex geographies. In the Middle East, customers do not have established physical addresses, requiring country-specific logistics strategies.

Solution

Singapore’s cross border ecommerce provider Anchanto is now providing fulfillment technology and infrastructure to help globally recognized retailers like ASOS scale on demand.

Since 2014, they have become the first in Southeast Asia to offer an end-to-end fulfillment platform that is technologically integrated – 100% effortless and seamless.

Understanding How Consumers Buy in Emerging Markets

Challenge

In emerging markets, 80% of consumers buy on marketplaces such as Lazada and MarkaVIP, which have tailored in-country customer service/support to account for everyday norms, like product returns and payment hurdles.

Moreover, these marketplaces have elevated customer service expectations for receiving products in a timely fashion. For brands without an in-country team or strategy, the results can be disastrous.

Solution

Elliot, based in Los Angeles, is the first omnipresent people and product management system. Automatically localizing and distributing your products onto marketplaces and social commerce channels around the world, including:

  • Amazon
  • AliExpress
  • Flipkart
  • eBay
  • Jet
  • Lazada
  • Snapdeal
  • Rakuten
  • TMall
  • WeChat
  • Zalando

Final Word

Remember, the best way to get a good understanding of your new cross-border market is to go visit. Talk with folks from around there. Work with an agency that knows it well. You don’t want to invest heavily is something only to be forced out due to a lack of understanding.

The same way you would do market research even in your own country, you must do the same abroad.

  • Understand payment methods.
  • Understand unique challenges.
  • Understand their needs –– and you will build yourself a brand in a brand new market full of loyalty customers.

The International Expansion Playbook

What if you are ready to invest in international expansion and localization to own a brand new market long before your competitors?

That’s what this guide will teach you to do.

Want more insights like this?

We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

Subscribe

Table of Contents

IntroThe Complete Cross-Border Ecommerce Guide to Growing Sales in APAC, Europe, The Middle East & Latin America
Chapter 1 Cross-Border Commerce 101: The History, The Lingo, The $900B Opportunity
Chapter 2 How 3 Brands Conquered Global Markets with Localized Websites
Chapter 3 The Cross Border Ecommerce Checklist
Chapter 4 12 Common Mistakes When Selling Across Borders
Chapter 5 The Tools You Need to 10X Your International Revenue
Chapter 6 How Worldwide Consumer Preferences Determine Your Global Ecommerce Strategy (Alipay, COD, Lazada)
Chapter 7 International Ecommerce Strategy: How to Market, Scale and Win at Every Stage
Chapter 8 Your Quick Start Guide to Cross-Border Ecommerce in China, India & The Middle East
Chapter 9 The Complete List: All 49+ Global Marketplaces
Chapter 10 32 Ecommerce Experts Give Their #1 Piece of Advice on International Ecommerce