It’s no secret that global e-commerce is growing rapidly. Current e-commerce statistics state that 40 percent of worldwide Internet users have bought products online, which amounts to more than 1 billion online buyers and growing. This year, global e-commerce is expected to grow nearly 21 percent worldwide to $1.59 trillion, as online retailers continue to expand to new geographies.
However, the move to international commerce may be perceived as expensive and risky, and perhaps some feel the research involved and local knowledge necessary for success isn’t worth the effort.
So, how can you promote your brand and sell products globally without significant investment or huge financial risk? For the reasons listed below, the affiliate marketing channel proves to be the most cost-effective method to expand worldwide.
Low Overhead
For international expansion, a primary barrier to entry is cost. Many retailers are hesitant to step into the untested waters of borderless e-commerce because of the assumed financial investment. This is where affiliate marketing really delivers.
The affiliates in your program immediately become your feet on the ground in new markets. Many successful e-commerce companies are able to break through borders without a localized website by leveraging the publisher’s ability to reach the local audience in their native language.
An established affiliate network will also provide benchmark data, making it easier to understand which markets are ideal for your products or business.
Some innovative publishers can also display your product feed in their local currency even if your site does not, thus attracting new, relevant consumers. These partners work to create a seamless process ideal for maximizing conversions in their local market.
What about commission payments? Choosing an affiliate network with the ability to pay publishers in their local currency (even if the transaction happened in U.S. dollars) is essential to recruiting the best local influencers into your global program. You want to make sure your network offers you the ability to report and process transactions in local currency and automate conversion for you to keep your costs low.
Lastly, some industries can take advantage of the global seasonal differences to manage remnant inventory. For example, if a fashion brand is going into its summer collection in the U.S., it has the opportunity to sell excess winter wear in Australia. This enables a retailer to utilize cross-border sales as a way to extend seasonal promotions and clear out inventory.
Low Risk
Unsure whether your consumer goods will appeal to the new market? The CPA (cost per action) or pay-for-sales model enables you to control your return on investment.
Global partners allow brands to test the waters without the risk of paying for clicks or impressions. A little research into competitor incentives will help ensure that your commission structure is appealing to international affiliates.
This myth that selling internationally is risky can be debunked by considering the less obvious benefits of borderless e-commerce. You actually diversify the risk to your business by acquiring a new customer base that may not have had exposure to your products.
Also, expanding your network to include different countries will make you less vulnerable to any one country’s economic fluctuations. With low startup costs and limitless local partners, selling internationally becomes one of the safest decisions a business can make.
Local Knowledge
The most important benefit to affiliate marketing in foreign markets is the wealth of local knowledge your affiliate partners will provide.
Did you know that social sharing is increasingly important in Brazil and Southeast Asia or that the “coupon culture” so dominant in the United States doesn’t pervade Australian society in the same way? Did you know that bloggers are just as important in the Japan marketplace as they are in the United States and Europe?
E-commerce in the U.S. breaks gender and demographic boundaries, but that may not be the case in other markets. In India, for example, the online population skews significantly younger than other BRIC countries, and in China, the share of more mature consumers is increasing.
Some markets, such as Russia, have a lingering uneasiness with buying clothing online so consumer electronics and books have the highest e-commerce penetration rate. There is also limited English proficiency there, so adapting to the Russian language is important.
Local affiliates in international marketplaces can provide invaluable subject matter expertise on what marketing initiatives or consumer product goods will succeed in their countries. They are also tuned in to the competitive landscape and the different search engines and social networks unique to their countries.
Additionally, these affiliates are also consumers; they know what marketing campaigns will speak to their audience, because the same campaigns speak to them. This represents the true intrinsic value of affiliate marketing – real partnerships.
Your global affiliates can bridge the gap between your home market and new, emerging markets; leveraging their knowledge shortens the learning curve substantially. Some affiliate networks have already broadened their global footprint by opening local offices in these markets to help their advertisers expand internationally without passing on the burden and cost.
In Summary
Online marketing channels are opening doors for local retailers to break international borders, and affiliate marketing could be the best method for entry into the $1.5 trillion e-commerce market. With low risk, low overhead and local knowledge at your fingertips, you can expand your global sales without leaving your office.
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