E-commerce is booming in China as consumers and vendors look to the Internet to save money in tough economic times, but the main beneficiary of their migration may be online payment providers.
Chinese payment providers like 99Bill Corp. have soared on the growth of Internet shopping, changing user attitudes and their own success at offering new payment options in a country where credit cards remain rare.
More at: The Industry Standard
source: http://www.globalcollect.com
Research shows that depending on country, and demographic group, consumers indicate that given equivalent pricing and product, accepting the payment type they prefer is a key influencer in their purchase decision.
There are three categories payment risk falls under:
1. Credit – the risk that a customer will not have sufficient funds
2. Fraud – the risk that payments are accepted with deceptive information
3. Repudiation – the risk that a customer does not honor their payment (charge-backs)
It is best to work with a payment specialist that understands the global market when deploying your payment solution. Many markets are still fragmented and a misstep while navigating the global payment marketplace can set you back several months.
Well…
I can think of a few things to consider here. Number one on my list would be, what percentage of sales or inquiries do your currently get internationally? Are they from a specific region? I know these seem like basic requirements for thinking about international expansion, but there always seems to be one yahoo in power within medium sized start-ups that has a brain fart and decides to go after Latin America because it would be fun to travel to Brazil. Send that person on vacation to Rio, but don’t change your business.
If you have a business that is organically selling into a region by the tune of 5% or more of your sales then you should start to consider things. In my experience you have great potential to double or triple your sales in that region by focusing your efforts. The beauty of SaaS is that you can move relatively quickly and you don’t necessarily require additional resources in the region.
OK – so your thinking: Can we support the time zone, tax implications, currency rates, contracts, cultural differences, ahhhhh! Run for the hills!
So let’s come back to the premise that you CURRRENTLY are getting 5% or more of your business in that region. I have one simple question: Will international expansion take your focus off where the real money is?
Now let’s ask a different question. Is the global market ready for your SaaS application?
Depends on many factors including your app of course, but SaaS seems to be growing in much of the world. A recent Gartner survey showed that 77 percent of North American companies plan to increase their SaaS deployments and 64 percent of European companies plan to do so as well. Another interesting takeaway was that 37 percent of global respondents are interested in eliminating traditional enterprise applications from their IT environments in favor of SaaS.
In the past, the road to international expansion has been daunting. In this new age of crackberries, iPhones, SaaS and ice cream snickers anything is possible. Well – it’s still tough, but somebody’s gotta do it, so why not you?
According to Credit Suisse First Boston report, the Chinese consumer is going to replace the US consumer as a primary engine of global growth by 2014.
China’s online shopping market is expected to grow to $18.45 billion this year compared to last year’s figure of $8.2 billion according to Shanghai-based tech consultancy iResearch. Wow.
80% of Chinese youth under 24 use the Internet.
Most popular purchases? Books & Publications, Audio/Video, Clothing, Mobile phones, Home goods, MP3 players and Cosmetics.
Downside to growth? The same issues that have hurt the Chinese e-commerce market from the get go. Trust, payment systems and logistics. The good news is that new payment solutions like Alibaba Group’s payment system Alipay, and a universal link into direct debit systems called IPS, are helping to allay fears of fraud with a population that is not accustomed to making purchases on the web.
With over 250 million internet users, who are now getting more comfortable with the web, China is going to be THE GIANT.
What are the top three items to consider when building trustworthiness globally? I don’t know. But here are three that come to mind.
Culture correctness – Understanding cultural values and distinct no-no’s can make or break your e-commerce efforts. Doing business in China? Pictures of clocks may symbolize death. Tell you what – stay away from clocks for now. Also, stay away from the numbers 4 and 7 which may relate to death. Death – I say!
Available payment options – In general, providing at least three payment options increases conversion at checkout by up to 20%. This is especially true in the global market. In Germany Direct Debit and Real Time Banking (like Giropay) are preferred payment options over credit card. According to the Bank of international Payments, 60% of online payments in Germany are via Direct Debit. Not offering Direct Debit solutions in Germany is like not offering cards at a US coffee shop. Not going in there again! What does this have to do with trustworthiness? Let’s just say not everyone in the world trusts credit cards and leave it at that.
Language – Translating your site can be a pain in the #$%. However, if you are serious about attracting business from a specific market, it can make all of the difference in the world. According to Overture France, the French consumer will look for information on the web in the French language approximately 94% of the time. They are not attracted to English advertisements. You think you can sell to China, Japan and Brazil without language translation? OK.
Please share with us your comments on trustworthiness in the global e-commerce market…
