According to the current E-commerce Europe report, 16% of all individuals in the EU made purchases outside of their home countries. For example, Alibaba is the 3rd largest e-commerce retailer on the Ukrainian market. Probably, the company is even unaware that they are participating in the race! Large cross-border sellers are inviding local markets, hitting hard even large-size local companies.
Let’s take a deeper look at the major strengths and weaknesses of both cross-border and local e-commerce companies.
Strengths of Cross-Border Players
Due to the large volume of products, cross-border e-commerce companies can usually beat the prices of the local companies. Also, their expenses per sale are usually lower due to the consolidated expenses on rent, labor force, etc.
Huge Customer Base and Plenty of Data
Usually, cross-border e-retailers take much more data into consideration which helps them build more effective merchandising algorithms and triggered email campaigns, anticipating customer needs. Also, their customer base is huge that provides them lots of options to cross-sale products.
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Strong Brand and Cheaper Customer Acquisition
Due to the brand’s strength, enterprise-level cross-border e-commerce companies usually enjoy several times lower costs of customer acquisition. Their CTR is higher that drives a quality score in Google AdWords over the roof, while an average cost per click decreases significantly. With such a strong position a cross-border player can simply price the competition out.
Higher Customer Lifetime Value
Having sufficient resources, cross-border players can employ sophisticated triggered email chains, merchandising algorithms which along with a strong brand spurs repeat purchases, conversion rates, and an average purchase order. As a result, a cross-border player can reinvest more money into the customer acquisition process.
Weaknesses of Cross-Border Sellers
Lack of Focus
For cross-border companies, any local market will be just another one of many. To put it in other words, it will be harder for them to compete profoundly on a market where they have no local presence at. It’s not that uncommon to see the growth of a cross-border e-commerce player up to the point, where their financial KPIs are met, but in order to gain a larger market share, they have either to get to the bottom, heavily investing resources into the problem resolving or simply move on. The latter is a way more popular and profitable solution for a cross-border seller.
Lack of Understanding of the Local Specifics
For instance, Alibaba can’t provide a decent translation for local markets, not mentioning the things like building the brand and dealing with the loyalty loop. Poor content decreases organic search rankings for cross-border e-retailers and it may also hurt a landing page quality score for paid advertising campaigns.
Furthermore, very few cross-border players pay much attention to running dedicated brand awareness marketing campaigns on local markets, bridging online and offline experience for the customers. Running prompt campaigns, driven by local news or memes triggers will be nearly impossible for a cross-border company which leaves local marketers plenty of options to engage with their audience, strengthening their ties with customers.
No Offline Presence
Alibaba can’t send you a push notification once you drive by Marks&Spencer or Metro Cash&Carry, reminding you to change a light bulb because they are far away. This simple fact unlocks many options for local omnichannel retailers, making their position rather strong strategically.
How to Beat a Cross-Border Player Locally?
Create Helpful Сontent
Crafting perfect product descriptions can make a huge difference when it comes to customers’ experience and it’s not that hard to outperform a cross-border company here.
Create video reviews, provide detailed photos, and gather and share product reviews. It’s also a good idea to ask local bloggers or celebrities to talk about the benefits of your product.
Invest into Building and Nurturing Your Loyal Customers’ Community
Facebook is an amazing channel to start with, linking online advertising, customers’ data knowledge, and interactive applications. Creating a simple Facebook application that will engage your customers to spread the news about your brand is comparatively cheap and easy to do, but a cross-border company will hardly use this opportunity in full. You can take the advantage and run integrated campaigns, which will be even more effective since you can take an advantage of your local offline presence.
Build Brand Offline
Let us give you an example. Etachki.com, a Ukrainian-based used-car seller, conducted a short, 2-week long TV campaign which increased:
- • Organic traffic by 18 times;
- • Type-in traffic by 33 times;
- • New user traffic by 2.5 times;
- • Number of appointment bookings by 73%.
Very few cross-border players would bother creating integrated online & offline marketing campaigns. This gives local marketers plenty of options.
Work on Performance Marketing Manually (Paid Campaigns and SEO)
Cross-border companies can barely invest people’s time into a manual proliferation of paid & organic search campaigns, mostly relying on sophisticated software, leaving enormous opportunities for filling these gaps by the local players. Consider using quotations of the local influencers, traditional colors, local versions of searches, jargon keywords, and many other options are waiting for you right away.
Speaking of SEO, cross-border players won’t pay much attention to acquiring local links, trying to take advantage of their general domain authority. Local companies can gain leads by making expert statements on local websites, publishing articles, spreading product and tech news, sending samples of products to the local bloggers for review, etc.
The Bottom Line
As you can see, local players have plenty of opportunities to beat cross-border e-commerce players, taking advantage of local presence, being more focused on the market, and investing in customer relationships and helpful content. Of course, this list of strategies shouldn’t be limited by the options mentioned above because every particular case requires a tailored solution.