In this Issue: Going Global
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Alert to U.S. businesses: American consumers are not number one in all things Internet.
At the end of October 2000, International Data Corp. (IDC), released some startling figures about international online consumers: By 2004, China will experience an estimated 104.8 percent growth in business-to-consumer (B2C) commerce, followed closely by India at 90.2 percent, while the United States is projected to have only 3.75 percent growth. Venezuela's Internet users (75 percent) are more willing than U.S. users (69 percent) to purchase software online. Online consumers in China (26 percent) and Sweden (27 percent) are more willing to buy investments online than in the United States (24 percent). Consumers in several countries, notably Argentina (47 percent), Mexico (45 percent), and Germany (43 percent) are more willing to buy information online than U.S. consumers. (See table 1)
What does this mean for U.S. companies? They may be neglecting potential market opportunities by ignoring an international audience. The IDC study surveyed advanced Internet users in the top 26 major online countries and examined the willingness of online consumers to purchase online financial services, computer hardware, software, and information (See table 2). If your company falls into one of these categories, you may want to expand your reach to a wider market.
According to Charlie Baxter, CEO of E-Translate, a global Web solutions provider, "More companies are going after the global market. Market borders are blurring as a number of key industrialized countries gain a critical mass of online users. These countries are growing faster than the U.S. so they now become viable markets."
However, before you go global, you need to determine your approach and tailor your business model, Web site, and marketing plan to that country's online consumers. And don't forget about the country's bandwidth and culture. For example, the Web site you create for a Chinese consumer should be a Chinese experience, not a U.S. experience. It must have the look and feel of that country's culture and be easily uploaded by a 28Kbps modem - the average logon device for Chinese users.
You also need to consider the competition in the country you are targeting. "Two years ago, the attitude was, 'Should I go over there and be the market leader?' Today you have local players who are formidable foes for U.S. companies. You have to go in and make a name for yourself," says Baxter. Your competitors have local distributors, business models, and consumers. If you are selling a product, you need to have a warehouse, distribution, customs clearance, and so on while your competitors already have these things in place.
Besides the cultural issues, you have some technical challenges to tackle as well. You need to build a global information architecture that can simultaneously manage, update, and work in different languages. "Those challenges become even more significant when you work with Asian character sets and different fonts," says Baxter. "Double-byte character sets change the whole requirement of your code base and you need to make sure all your applications are double-byte enabled or internationalized to accommodate the fact that there are different ways of expressing languages."
Obviously, being an Internet success story in the United States doesn't necessarily mean you're going to have the same success abroad. "E-Bay and Amazon have coveted the Japanese market for years but neither company has had much success in Japan," states Baxter. "Yahoo saw what E-Bay was doing and built E-Bay-like business models years in advance of E-Bay and runs a very successful auction site with its partner, Softbank." But if you understand your market and create a local experience for its online consumers, you will be more successful than a company that simply creates a literal translation of its site from English to Spanish or English to Mandarin.
All of the countries surveyed by IDC are projected to have higher growth in e-commerce than the United States. Clearly, U.S. companies can no longer afford to ignore international online consumers, despite the cultural and technical challenges of reaching a global market.
---Chuleenan Svetvilas
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