An online sales channel like never before is luring with its high-profit potential and convenience. Not only is that adequate to start-ups but maybe even more to prominent business owners already well-deserving its brick-and-mortar fame. The latest ATKearney study shows how easy it is to squeeze a share of billions of dollars in extra revenue by a wise online sales strategy.
Current e-commerce situation
For the last five years we can speak of skyrocketing e-commerce stats that recorded an increase of $185,147 million. The number is a value of a 13% growth each year for this area of business and the perspectives are still bright. The conclusion is – a developing market. And as each of the developing markets, e-commerce has still some gaps to fill and plenty of advantages for the potential entrepreneurs. Examples of such are comparatively low costs and consequently low risk of a set-up.
Should bricks-and-mortar be afraid?
Definitely not, they should only change their approach to business and actually think of expanding their business. That’s right expanding! Looking at the example of Pixmania group, which has successfully opened 20 offline spots around the biggest European cities one may only learn. According, to Internetretailer Pixmania’s $1.1 billion income comes in 50:50 from both online and offline sales. The key to success was using the difficulties to the advantage. By the expanded buy-and-collect possibilities they increased delivery convenience and allowed showrooming.
After all, it seems that multichannel works better than e-commerce alone.
Directions worth billions of dollars in extra revenue
The change in laws, customers’ attitudes and Internet infrastructure led to a real online evolution in China, Brazil and Russia. There are actually more countries currently presenting a huge potential. However, China reached $23 billion worth of online retail market recording a 78% annual growth since 2006. The follow-up Brazil can be proud of its $10.6 billion and Russia $9 billion. The numbers are tempting and the costs are affordable. The only thing to do now is to check what you can offer to e-commerce business, adapt to the markets and be persistent.
Use it wisely
Whether you’re a retailer or a business supporting online retail (CRM, BI, ERP, etc.) who wishes to use the global possibilities of that market should respect some ground rules. Firstly, not all customers are the same, the culture and the language spoken have a lot do if it comes to shopping habits and the way people do business. Thus, check your potential market! Look for the local competition, not always your international success has to mean that you’ll manage everywhere. Just think of Ebay having a hard time to take over Polish market due to the local Allegro group. Nevertheless, be persistent, the attitudes and trends change easily and each market grows to take up novelties.
Don’t be fooled!
Your native markets may suggest that there’s nothing more to do in e-commerce, but don’t let that blind you! E-commerce is now expanding, at the moment it’s China, Russia and Brazil but there are plenty of places where an Internet connection is just starting to be a commodity. In a few years these are the spots to go to with your offer. It’s a good time to think of new solutions and ventures that will support retailers in their struggle to exist globally.
But don’t treat it as a side job please
Unfortunately, recent research shows the other side of the coin as well. Around 20% of new (often small shops) are gone within a year. Mostly, because the owners underestimated the amount of work involved. Starting a web shop is easy, that can be done within an hour by using one of the online services, but that doesn’t mean that tomorrow your shop will be full of loyal people. General marketing rules and principles apply. Upfront research will be needed to address and target the audience. Furthermore, it’s essential to keep your clients happy and to convert them into returning clients. Excellent service and engagement is needed to achieve this. If you are ready to work hard for it, a lot is possible, that’s fact.
Have you already considered e-commerce as a way to earn? What do you think about entering the developing markets? Share your ideas below or if you’re going to the Microsoft Worldwide Partner Conference in Toronto (WPC12) this year feel free to find us and discuss the topic!