Going global: localisation is key to international retail success online

Senior executives from Dune Group, Oliver Bonas and Kate Spade gathered to discuss how to expand overseas online and the overwhelming message was to “think global, act local”.

Dune Group international, franchise and wholesale director Ben Jobling said localisation is the key to success online and franchise partners can play a crucial role in helping to get it right: “The reason why we have these [franchise] partnerships is because we’re not the experts in these markets. They are.”

Kate Spade senior director of ecommerce international Ceanne Fernandes-Wong agreed that “on-the-ground” expertise – be it through franchise partners or hiring native experts within in-house teams – was a key ingredient for success.

John Sellwood, business development director at digital marketing agency Oban International, said retailers should not try to “awkwardly shove” their UK approach into another culture: “It works best when there’s a really deep understanding of what your brand means and a good understanding of local expertise,” he said.

But what does localisation really mean?

Translating the website and offering local payment and shipping options is part of it. However, Fernandes-Wong said it was ultimately about “understanding what your brand needs to be in a certain market and what levers you need to pull”.

Regina Lau, chief strategy officer at payment strategist Ingenico ePayments, said: “There’s a bit of a tug of war because there are lots of factors to control.”

And some customers can be temperamental. Fernandes-Wong shared the example of a luxury brand that experienced a drop in sales following the launch of its French-language website. The customers who had money to spend on the site preferred to shop on an English-language website.

“If you have a very affluent customer, they might only want to shop in English as there’s a certain cachet to it,” she explained. “It’s all about understanding what drives a market and knowing your customer.”

The roundtable attendees were all at different stages of their international rollout. Around 40% of Dune’s sales come from overseas, and Jobling described the retailer as an international company of which the UK is just one of its markets.

By contrast, Oliver Bonas is at the beginning of its international journey and plans to launch its first overseas website in Ireland next year. Katherine Saralis, omnichannel project manager at Oliver Bonas, said it wanted to take things slowly and thoroughly plan its overseas website.

“We’re still privately owned, so we’re moving slowly and carefully,” she said.

Olga Szombathelyi, head of international at Ann Summers, admitted launching overseas could be “daunting”, but said small steps could be taken: “You can use your existing website and localise it slightly, just for the payment and shipping. When you decide your brand is big enough in a market, you can do a dedicated website. You can do it step by step.”

Szombathelyi said the first step in international expansion was to define what your brand was and where it should be positioned in the market. This would help to determine the best route to enter international territories.

Fernandes-Wong said that regardless of which expansion route is chosen, retailers need to make a sizeable investment, and often make the mistake of not investing enough in online launches.

Ann Summers has opted to make its international debut by selling on marketplaces. This allowed it to build its brand before considering launching a standalone website.

Szombathelyi explained: “It’s not a case of building websites and they will come. You need to partner with Tmall, Zalando and Asos. They can help build the brand for you before you [ultimately] take that leap into stores.”

Many of the retailers in attendance agreed that marketplaces can be a valuable tool for overseas expansion.

Ray Clacher, executive vice-president at Trinity, which owns premium brands Gieves & Hawkes, Kent & Curwen and Cerruti 1881, said: “Don’t worry about the margin – [marketplaces] will build you a business. The Farfetches and Tmalls will do it better than you can. We embrace those partnerships globally.”

Clacher added that these marketplaces are more important in some countries than others: “In mainland China there’s no Google, so they search in a totally different way. If you don’t [go on Tmall], you haven’t got a business.”

However, he warned that product is sold in a “totally different” way on Tmall. Shoppers expect a plethora of images and videos, and tend to call a customer services hotline as they order a product.

Claire Arksey, global executive director of retail at Urban Outfitters, advised brands to “be humble” with marketplace partners: “On Zalando, we were being deprioritised because of our photography. We felt we needed to protect it, but by holding on to it, we were never going to be top of the site.”

Most of the roundtable attendees agreed that social media is important for international expansion. And localisation is key. Dune, for example, allows its franchise partners to create social content to make sure it is tailored for each market.

In terms of which platforms to target, Instagram was the “holy grail” for Kate Spade globally. However, in China it is focusing on WeChat.

“Having a strong WeChat game is critical in Asia,” said Fernandes-Wong. “The power of WeChat is that it’s not just a social platform – it’s a sales and CRM [customer relationship management] platform as well.”

Other social networks are following WeChat in becoming platforms that go beyond engagement to facilitate transactions. Attendees highlighted that Net-a-Porter and Adidas are using WhatsApp and Facebook Messenger to sell goods.

Payment specialist Ingenico ePayments helps retailers to maximise the impact of social media. Sangeetha Narasimhan, UK marketing manager, said: “We’re investing a lot in payments technology so you can buy through chatbots on Messenger.”

International expansion is not straightforward, but by understanding how their target customer shops, and the emerging technology and platforms they use, retailers can thrive far beyond their own borders.

For UK fashion brands and retailers looking for growth outside these shores, the short journey to Germany would seem an obvious first port of call.

Germany is a bigger fashion market than the UK– worth $91.8bn (£74bn) compared with the UK’s $72.2bn (£58.2bn), analyst Planet Retail reports – and many assume shopping behaviour is similar between the two countries.

However, they are mistaken, cautions Hawes & Curtis head of ecommerce Antony Comyns: “The customer is very different. It’s unlike any other country and seems as foreign to us as places like India and China. It’s a really tough market to crack.”

Comyns says that, in contrast to promiscuous British shoppers, Germans are very loyal and tend to shop at brands that they know.

Meanwhile, Germany – the nation that brought us Aldi and Lidl – is unsurprisingly a price-sensitive market.

“They shop for bargains more than the average UK shopper,” says Sean McKee, director of ecommerce and customer experience at Schuh, which has three stores in the country.

Localisation is crucial in tackling the German market, says Comyns, who suggests brands launch local language and payment options on their websites. He says a localised site makes it easier for shoppers to find brands on Google and as conversion rates are much higher when ads direct through to a translated website.

The payment conundrum

Payment in Germany is dramatically different from the UK, as shoppers prefer to pay on delivery through invoices.

“German shoppers rarely use credit cards – a behaviour born out of a general aversion to debt. Consequently the preferred online payment method for the majority of consumers is open invoice, followed closely by PayPal. Alternative payment methods such as direct debit and bank transfers via SOFORT, Überweisung and Giropay are the most popular ways to pay,” says Regina Lau, chief strategy officer at Ingenico ePayments.

However, Comyns says this has its benefits: “As a retailer you are horrified at the prospect of not taking payment until the shopper has made a decision on whether they want to keep it. However, I think it’s quite good. There are costs involved in processing a refund. This way you remove that from the process.”

Although Hawes & Curtis launched in Germany without a pay-on-invoice option, it has since added a third-party widget to facilitate this to boost sales.

Schuh, which is planning its German ecommerce launch in mid-2017, is taking a similar approach.

Delivering the goods

When it comes to delivery, the German market is less mature than the UK, so shoppers are less demanding, says McKee. Schuh plans to deliver goods from the UK, and the proximity to Germany means it can do so at “high speed”.

However, a big concern for Germans is the cost of delivery. So achieving a balance between speed and cost is a challenge for retailers, says McKee.

Click-and-collect is less of a priority in Germany. However, Schuh plans to offer the service, as McKee believes it will grow in popularity.

Delivery may be relatively straightforward, but returns are a different matter.

McKee says 60% return rates are talked about in the German market and admits this has been a factor that has held Schuh back from launching online in the country: “At the end of the day this is a mathematical equation. You need to ask yourself: is the net outcome that you make money?” he says.

Comyns reveals that returns rates are “really high”: “Our men’s returns rate is akin to women’s fashion. In the UK, if a shirt doesn’t fit, men may send it back if they can be bothered. They can always be bothered in Germany.”

Schuh’s three German stores have given it valuable insight that can help it reduce returns online, says McKee: “The sizes required are different. There’s an assumption that you stock half sizes.”

It is a similar story at Hawes & Curtis, which discovered that shirts needed longer sleeves for the German market.

Both McKee and Comyns agree that extensive research is critical to understand the nuances of a market that may be close to the UK in proximity but in many ways is worlds apart.

Proper planning can make the difference between soaring sales or saying “auf wiedersehen” and shutting up shop.

The Netherlands has a thriving fashion scene, which boasts a good mix of independents and multiples. One of its key characteristics is the continued loyalty to bricks-and-mortar retailing: most people cycle, which means they can easily hop off a bike and into a store. However, it also has one of the fastest-growing ecommerce markets in Europe, making it an increasingly important market for international retailers looking to expand.

Online retail sales in the Netherlands grew by 18.7% in 2016, CBS, the Dutch national statistics office, reports. Research agency Statista estimates the Dutch ecommerce market will be worth €7.12bn (£6.24bn) in 2017, up from €4.63bn (£4.06bn) in 2012, and fashion is expected to be the fastest-growing category.

There are several reasons why UK brands should consider expanding into this market. The Dutch economy is stable, thanks to a strengthening housing market and improving business prospects, while inflation remains low. Consumer confidence has been steadily improving since the Brexit vote last summer, CBS research shows.

“The Netherlands should be a high priority market for UK retailers who would like to take their first step towards international expansion,” says Regina Lau, chief strategy officer for international payment solutions provider Ingenico. She points out that 23% of Dutch consumers bought at least one item from an international website last year.

Marks & Spencer launched its Dutch website in 2013. Its head of international online trading, Debbie Havekin, confirms the growth opportunities: “Online shopping continues to grow in scale and relevance [in the Netherlands] as customers look for more choice and greater convenience,” she explains. “The trading patterns between the UK and Netherlands are very similar, which allows us to offer more than 10,000 clothing and home products there, at the same time as the UK.”

Competitive market

However, it is not an easy market to break into. Any new entrants would be up against Berlin-based Zalando, which launched in the Netherlands in 2010 and is now one of the biggest online retailers in the market. H&M, Zara and Asos also have a strong foothold in the market, and there are powerful local retailers, such as home shopping retailer Wehkamp, which is similar to Shop Direct.

“The big players have set a new standard, particularly when it comes to customer service and delivery,” says Annelies Braeckman, European retail manager for Dutch lingerie retailer Lincherie. “Zalando, for instance, will pick up your return at home in the two-hour time slot you choose. That’s hard to compete with.”

One of the key pieces of advice is to set up a local language website with a Dutch domain name, and explore the use of local trust marks.

“Trust is crucial,” says Christopher Nieper, managing director of Derbyshire-based womenswear etailer David Nieper, which has an office in Heemstede, north Holland. “We publish our catalogues and website in local language and currency, and we operate a local call centre. We can respect the local culture best by organising everything to do with marketing and customer services from Holland itself.”

“Dot.com doesn’t work here or anywhere else in Europe,” agrees Philip Mountford, who joined Dutch lingerie firm Hunkemöller as chief executive in 2009. “When we changed to local domains we saw a huge spike [in traffic]. And if it’s not in Dutch, your SEO won’t make it past the competition.”

Another important factor to consider is which payment options to include. More than half of all online transactions in the Netherlands are made through a service called iDeal, which transfers money directly from the customer’s bank account. Credit and debit cards are also popular, while alternatives such as PayPal, Giro and Afterpay have less than a 5% share in total of the payment market.

“Localisation is key and in the Netherlands this goes beyond just having your pricing in euros – you also need to have the right local payment options,” confirms Havekin. “Sixty per cent of Marks & Spencer’s online sales in the Netherlands use iDeal, which is unique to the Dutch market.”

Havekin also makes the point that 30% of M&S’s online customers shop on mobile devices, compared with 22% in France, for example.

Lau picks up on this: “Mobile penetration is very high in the Netherlands so it is very important to have a mobile-first strategy when targeting the Dutch market.”

Iqbal Areosa Makboul, research associate at Euromonitor International, advises British retailers and brands to familiarise themselves with how Dutch consumers use their smartphones: “For example, many people receive mobile notifications from nu.nl, a Dutch website that delivers real-time feeds with the most recent news, which could be a useful communication strategy for retailers.”

For retailers with a localised website and demonstrable understanding of the Dutch consumer, the Netherlands is full of opportunity to expand online. Key to success is building up trust, prioritising delivery and offering familiar payment methods.

The fashion and footwear market in the Nordic countries – Denmark, Finland, Iceland, Norway and Sweden – is fiercely competitive. Sweden in particular, and to some extent Denmark, have produced brands and retailers that are not only popular in the region, but globally – the most obvious example of which is H&M.

Online retailing presents an opportunity for international brands to break into this challenging market. More than a third of online consumers in the Nordics make purchases from international ecommerce websites every month, research by the Swedish postal service, PostNord, shows. Last year, purchases from foreign retailers accounted for 25% or €5.4bn (£4.7bn) of total ecommerce sales. The UK and China are the most popular countries to purchase from, followed by Germany and the US.

“The Nordics offer excellent opportunities for retailers looking for expansion,” says Jonathan Bayfield, senior research analyst at property services firm JLL. “All of the countries have strong economic growth forecasts and are home to a growing pool of affluent consumers. Retail spend is being driven by young fashion-conscious populations.”

British maternity fashion label and retailer Seraphine has shipped to the Nordics since 2013 and began targeted marketing last year, when Princess Victoria of Sweden started wearing its designs, resulting in a spike in awareness.

“The Nordic countries represent a great exporting opportunity for UK-based companies – it’s a prosperous region, whose consumers share a lot of the same interests and core values as ours,” argues Seraphine founder and head designer Cecile Reinaud.

“Consumers in the Nordics are usually fluent in English, so language is not a barrier for online shoppers. Offering a payment gateway in their local currency will greatly help conversion but in our experience they are quite comfortable shopping in pounds, and, of course, lately even more so as a result of the favourable exchange rate.”

Jekaterina Smirnova, research analyst at Euromonitor International, agrees that having a site in English is not the biggest barrier: “In general Nordic consumers are good at English and do lots of online shopping on foreign websites. However, if you can launch a web shop in the local language, it would be an advantage. It would build more trust in your company and help you cover a wider audience.”

Crowded market

The main challenge for new players is competition, Smirnova argues. Most initially store-based fashion retailers in Nordics have established successful ecommerce sites, and there are strong pureplay fashion etailers in this market, such as the fast-growing Boozt.com, Nelly, an online retailer selling own-brand and branded fast fashion, and Ellos, a Swedish home shopping and ecommerce company. Zalando has also expanded rapidly in the Nordics.

“In general to succeed, online players have to provide a wide selection of products, a short delivery period, competitive prices, a flexible return policy and convenient methods of payment,” explains another Euromonitor research analyst, Peder Kraugerud. “They should also keep in mind that mobile has an increasingly significant role.”

Zalando’s revenue from the Nordics has doubled over the past two years, while its customer base is up 50%. Its success in the Nordics can be attributed to a mix of factors: it is known for offering a wide variety of products and well-known brands, a range of payment methods, free delivery, a 100-day free return policy and a localised approach, including local language, marketing activities and advertisements.

“You have to have that cultural understanding,” explains Sigrid Dalberg-Krajewski, corporate communications officer for Zalando in the Nordics. “For example, in general in the Nordics consumers are really conscious and aware. Campaigns considered sexy in some countries might be considered sexist in the Nordics, especially Sweden. You have to be very careful with the messaging.”

Dalberg-Krajewski also emphasises that, while there are obvious synergies between the countries, there are some key differences. For example, Danish consumers prefer home delivery, while in Sweden and Norway they are more likely to pick up parcels in store or at a third-party retailer.

“Delivery is becoming more and more important,” she adds. “People in the Nordics used to be quite patient in terms of lead times, but digital is shaping the environment in which we live. Now the threshold is delivery in three to four days. It used to be a week or two.” Zalando is planning to open a satellite warehouse in Sweden by the end of 2017 to better meet these expectations.

And there are other differences, aside from the languages spoken. Norwegians, for example, are generally considered to be more brand conscious, because they have higher disposable incomes, while each country has its own preferences when it comes to payments. As a result, it is crucial to spend time understanding each country individually.

“You have to look at your core proposition and tailor it as much as you can to local habits,” advises Natasja Giezen-Smith, head of trading for emerging markets and Northern Europe at Asos, which started shipping to the Nordics in 2001. “Do you need to deliver to home or to a pick-up point? Have you got relevant payment methods and currencies? Have you tailored your trading calendar as much as possible to the local rhythms? Make yourself locally relevant as much as you possibly can.”

The Nordics may be a challenging market because of the strength of and loyalty to its local heroes, but if UK brands and retailer can demonstrate understanding of local cultures and preferences, there is plenty of opportunity to generate online and offline sales.

China is often thought of as a land of opportunity where premium and luxury brands can thrive. However, the road to success is paved with obstacles. Many brands and retailers have tried to crack China only to beat a hasty retreat.

Asos, for example, launched in China in 2013 with grand plans, only to close down its operation last year at a cost of £10m, citing the challenges of starting up in a country with complex regulations on clothing and vast regional climatic variations. Taking on market leader Alibaba, which is responsible for 75% of online sales in China, must also have been a consideration.

China presents enormous opportunity: by 2019, its ecommerce market is set to exceed $1 trillion (£807.2bn), making it bigger than the UK, US, Germany and France combined. However, it also brings much complexity.

First, there are bureaucratic concerns. China has heavy regulation on foreign companies and websites, so trading through marketplaces such as Alibaba’s Tmall can be an easier route into the country. Topshop, Marks & Spencer and Burberry are among the UK operators to have launched on the platform.

However, it is difficult to stand out on crowded marketplaces such as Tmall.

Steve Challes, business development director at New Look, which sells through more than 100 directly operated stores and marketplaces Tmall and JD.com, says: “I think that our challenge – everybody’s challenge – is establishing the brand, because Tmall is a crowded platform.”

Rob Feldmann, chief executive of flash Sale site Brand Alley, in which Chinese etailer Vipshop – the country’s largest flash Sale site – is a 24% shareholder, says: “You have to pay through the nose for visibility on TMall.”

Meanwhile, Chris Vincent, global chief executive of multichannel consultancy Practicology, warns that marketplaces are discount driven: “If you’re a brand that cares about your margins and your positioning, you need to have some kind of direct-to-consumer presence.”

The British House, an upmarket department store that sells UK brands including Liberty, Aspinal of London, Johnstons of Elgin into China, has decided to go direct to consumer. The retailer operates its own website and has a 13,000 sq ft store off Tiananmen Square, Beijing.

The British House director Jamie Powell, who is a former global brand director at Burberry, says Chinese websites looks very different to what you would expect in the west: “The Chinese think our websites are dull as they’re static. They like videos, music and scroll – and all at once.”

A mobile-obsessed shopper

Retailers must focus on mobile to crack the Chinese market, as that is the channel of choice in the country.

Alibaba UK senior manager Meifang Chen reports that 70% of its sales now come through mobile devices.

Vincent says: “There’s no such thing as a desktop generation in China. They’ve skipped that. They live on their mobile. Rather than mobile-first design, websites should be mobile only and everything needs to tie in with social.”

Google is blocked in China, so many consumers are unfamiliar with western brands.

“International brands coming in is very exciting but the Chinese don’t know them. Brands need to do an education piece,” says Vincent. And social media play a big role in this. “The Chinese don’t believe what they read or see in the newspapers or on TV, and tend to gravitate towards WeChat and micro-blogging site Weibo, as these are seen as truth because it comes from the masses.”

WeChat has more than 700 million active users. It is more than a social media network: users can order taxis on it, listen to music and – importantly for retailers – buy goods, so it is a big sales channel in China.

In terms of payment, credit card circulation is limited in China, so cash on delivery is popular. However, there has been a dramatic growth in digital wallets, which 70% of all Chinese shoppers use.

Powell says there is trust in Alipay, Alibaba’s digital wallet, which has 450 million users, so The British House adopted it on its website.

“Want it now” culture

When it comes to delivery, China has a “want it now” culture, believes James Rogers, managing director of Shanghai-based consultancy CR Retail: “If it’s coming from China, they expect same-day delivery in the tier one [six most-developed] cities.”

However, Powell insists shoppers will wait longer for goods coming from overseas. The British House offers delivery within eight to 11 days.

“Shoppers are happy to wait, as they know it’s authentic and is being flown out of London. We send them flight numbers and they see it as proof that it’s an original,” he says.

Locker solutions are also popular in China and retailers should consider them as a fulfilment option, advises Vincent: “Many in China’s major cities live in high-rise buildings that often do not have lifts. Delivery drivers refuse to climb the stairs. In addition, GPS isn’t very good, so there’s difficulty finding your place.”

China is a lucrative market with an appetite for British brands. But as Asos’s retreat shows, not all will prosper. Brands need to take time to understand this complex marketplace and work with the right partners to flourish.

Retailers are looking to the US market with renewed vigour, as foreign exchange rates and a rise in the threshold for import duties that came into force last year makes UK fashion and accessories increasingly competitive across the Atlantic.

However, despite a common language and some shared elements of sartorial style, conquering the US market is not always as straightforward as it may seem. There have been some notable failures and none more so than Marks & Spencer’s 13-year dalliance with US retailer Brooks Brothers. Although that love affair ended more than 16 years ago now, the total loss of almost $1bn (£800m) it racked up during the process will never be far from a cautious retailer’s memory.

It can also be difficult to maintain a “first price, right price” strategy, as US shoppers love discounts. However, retailers are managing to convince customers of their value proposition through a combination of unique products and competitive prices, which is currently helped by the depressed value of sterling against the dollar.

Asos chief executive Nick Beighton revealed during the etailer’s most recent trading update that it had taken advantage of the weakness of sterling to reduce prices during the four months to 31 December, and had increased by 42% year on year as a result.

British appeal

Other UK-based etailers and brands are enjoying ecommerce success in the US without much initial effort or capital outlay, armed with a good website and a distinctive offer.

Malcolm Macdonald, chief financial officer of Seasalt, says the Cornish lifestyle retailer is experiencing a boom in international sales without a localised site or targeted marketing: “Our US business doubled last year and that is just people finding us online themselves. The US is a particularly exciting opportunity for us and we’re starting to look at how we maximise that effectively now.”

Regina Lau, chief strategy officer at payments provider Ingenico ePayments, says that, although clothing and footwear are the most popular cross-border ecommerce category for the US consumer, retailers must introduce key localisation elements to build trust with some of the most savvy ecommerce customers in the world. For example, the product pricing has to be in US dollars.

Credit and debit cards are the most popular payment methods, she explains: “Visa is the most popular, followed by Mastercard, Amex and then Paypal.

“Clear communication and direction on the site, a mobile-first approach … and a strong social media presence are also very important to build trust and increase cross-border sales.”

These were key considerations for Manchester-based PrettyLittleThing, which launched its localised US site last July complete with relevant content, offers and merchandising for the US customer.

Marketing manager Nicki Capstick explains that PrettyLittleThing made its debut in the US with a party hosted by model and reality TV star Kendall Jenner in July last year, which generated the required awareness through coverage across key US media outlets and on social networks. This was then supported by digital marketing, PR and traditional advertising to raise its profile among the target audience.

“We knew we had to pull off something pretty huge to really make an impact, as the US market is much more saturated,” she says. “The launch party demonstrated everything about our brand: it was cool, fun and heavily supported by influencers in the marketplace.

“Sales have continued to soar off the back of this and we’re seeing consistent month-on-month growth,” she adds, explaining that February sales were up by more than 700% year on year.

Tax break

Other brands that have been trading for longer in the US are benefiting from a change in the law introduced in March last year, which raised the threshold at which duties and taxes are imposed on imports from $200 to $800 (£164 to £658).

Many fashion and accessories purchases previously fell foul of the limit but the new threshold means average baskets slide through duty free and no longer need to go through formal customs procedures, making the entire process quicker, cheaper and easier.

“Right now the US is the most attractive [market] for us,” explains Luca Marini, chief operating officer of womenswear etailer Finery London. “The change in threshold basically means that all baskets are duty free, so suddenly you are so much more competitive. We have chosen to invest that in improving our value proposition for returns and we’re reaping the benefits.”

Wallis says reliable delivery and a range of pick-up locations in the neighbourhood are increasingly important to online shoppers in the US. Use of drop boxes with a PIN are also common.

Previously Finery customers in the US had to pay the international returns delivery themselves but at the start of this year, it chose to upgrade its returns procedure. Shoppers now just have to send the parcels back to a centralised depot in the US as a domestic package and Finery will cover the cost of the international return.

“That’s a much more compelling offer,” says Marini. “The duty change has changed the game and makes the US market a lot more interesting, so we’re excited about opportunities at the moment.”

Nevertheless, retailers do not expect the combination of weak sterling and duty-free trading to last forever, especially given President Trump’s protectionist stance. UK firms that want to succeed in the US must offer unique ranges at competitive prices to stand out in one of the world’s most crowded markets.

For British retailers looking to expand their ecommerce offer overseas, the highly competitive markets in Europe and the US might seem the most obvious first step. The sheer size of the US and the cultural similarities of its consumers make it a tempting prospect and many high street giants have already made the move into countries such as Germany, France and Spain. However, there are also opportunities in the growing markets further afield.

Retailers are waking up to the possibilities in countries such as Brazil, Japan, India and Australia. Lifestyle brand Cath Kidston is ramping up its ambitious international expansion plans with a push into Latin America and luxury off-season etailer the Outnet already has a strong presence in Hong Kong and Australia, as well as the UK and the US. On the other side of the globe, Reiss is exploring Australia and Asia.

“Treating all customers the same, and assuming that you can simply translate your campaigns into multiple languages and achieve the best business growth, is perhaps the biggest mistake a retailer can make when going international,” explains Greig Holbrook, founder of digital marketing firm Oban International.

British etailer and knitwear brand Wool Overs is finding year-round success by expanding overseas. Around 30% of its sales come from outside the UK and Australia is the brand’s largest international market.

“We’ve tapped into the huge counter-seasonal trade in Australia and New Zealand,” chief customer officer Martin Francis tells Drapers. “It’s been great for a business like ours. As demand for knitwear slows down in the UK over the summer months, we’re hitting the peak season in Australia, which has helped maintain revenue all year round.”

Francis stresses the importance of tailoring an ecommerce offer to fit with consumers in international markets, as well as the importance of staying competitive: “For our key international markets, we run separate marketing and trading calendars to stay appropriate to that country.”

He adds: “Keeping up with exchange rate is also key. You can become competitive very quickly [in international markets], especially at the moment, when the value of the pound is so volatile.”

Indian promise

A huge population and growing economy makes India another country high on many retailers’ list of priorities for growth. Online retail sales in India are estimated to hit $120bn (£98bn) by 2020. Domestic ecommerce giants like Flipkart and Snapdeal are already reaping the benefits. Amazon has also invested billions into the Indian market.

Mary Turner is the chief executive of Koovs, an Indian etailer selling a mix of brands including New Look, Adidas and Glamorous, as well as its own label. She points to India’s young and digitally switched on consumers (India had 195 million Facebook users as of May last year) as further advantages for British retailers. However, there are also challenges to be overcome.

“Because India’s ecommerce market is still in its early days, many consumers don’t think of the internet as offering more choices or as more convenient, but as a place to go for discounted products,” she argues.

“The other thing to consider is that India has leapfrogged. The west has taken 15 to 20 years to go from dial-up to broadband to fast broadband. India didn’t go through the same stages and has gone from nothing to mobile really quickly. This means there are some anxieties around payment: ‘will it work?’ and ‘am I at risk of fraud?’ are questions at the forefront for India’s ecommerce consumers.”

Michael Pike, founder of consultancy firm BrandSpoke, which helps international brands enter the Indian market, agrees that there are plenty of opportunities for British retailers in India but warns pricing must be carefully considered: “International brands can suddenly find that their product is twice the price in India because of import duties. Indian consumers will not overspend. It’s not a case of not caring about the expense if it’s the right brand or product, which you might see in other international markets. It’s not about being cheap, but it is about being perceived as good value.”

Big in Brazil

India’s rapid acceleration to mobile has been echoed in other key international markets. Brazil is the largest market in Latin America for ecommerce sales, and logistics company WNDirect predicts the online market will increase by 40% to more than $27bn (£17bn) by 2018.

Brazil has 90 million Facebook users, second only to India and the US (191 million). Retailers that want to build a successful ecommerce operation in the country need to tap into the country’s love of social media to speak to consumers.

“In Brazil, 60% of household goods were bought online last year, making it the biggest ecommerce category, with clothing, electronics and beauty products following closely behind,” adds Oban International’s Holbrook.

Similarly, business consultant OC&C Strategy warns that UK retailers risk lagging behind their American and Asian competitors when it comes to mobile. Japanese clothing brands such as Uniqlo are experimenting with chatbots on social-messaging platforms – something UK retailers that want to break into the Japanese and South Korean markets must address to avoid being left behind.

British retailers who have been successful in Japan have tailored their offers to the country’s consumers. Cath Kidston chief executive Kenny Wilson has described the Japanese market as “driven by newness”, and stresses the importance of introducing bold products consumers have not seen before. The brand makes around 30% of its product locally specific, including smaller sizes to suit Asian consumers.

So with their digitally engaged consumers and leapfrog to mobile, countries outside Europe and the US hold huge opportunities for many UK businesses. To be successful, retailers must tailor their offer to local markets and understand how best to communicate with consumers.

UK fashion brands have an enviable global reputation for quality and market-leading style, but the trick to successful internationalisation depends primarily on understanding local nuances.

Fashion brands need to build trust in new markets and understand how language localisation, logistics, payments, cultures and adoption of technologies can promote an omnichannel offering.

The most important aspect of international expansion, often overlooked, is payments. Without seeing traffic through to a converted payment, there can be no sale or delivery – in short there can be no transaction.

Payments are an intricate, intimate part of a successful international strategy, centred around creating a seamless, secure experience for the customer. British businesses of all sizes can sell to and receive payments from customers globally, but it is essential to build trust by offering prices in local currencies, using a reputable payment processor and offering familiar payment methods for each local market.

Fashion retailers need to collect and reconcile funds from multiple international locations in the back-end of their retail platform. Payments providers can facilitate this, but it also helps to work with providers who are physically present in the country you are expanding into. The key to an effective fraud management strategy should be to maximise approvals.

Technology plays a vital role too: awareness of the mobile penetration rates in international markets can be a decisive factor when defining how you take payments from consumers. Alipay in China, Paytm in India and M-Pesa in Africa have advanced mobile payment offerings that cater for market demands, specifically tailored to their region.

A successful international expansion strategy is not simply providing the best products and services for customers – it is ensuring a seamless experience for the customer. Removing friction to the point where customers barely notice the payment experience is a phenomenally powerful way of ensuring they return to you time and again.

Cross-border ecommerce is booming. While the UK retail sector faces local challenges, international markets offer opportunities for fashion brands and retailers to reach new consumers and grow beyond the UK.

However, whether you are considering Germany, China or Australia, the universal rule is that one size does not fit all. Some brands still choose simply to duplicate their UK site and use an automated translation tool. With this approach, brands risk being seen as not caring about getting it right for local consumers. At worst, poor translation mistakes can cause offence or make consumers concerned that they are looking at a fake site. And no one buys from a website they don’t trust.

Your marketing needs to be informed by an understanding of the local market for each individual country. What are the local cultural nuances that will influence your product choices, website design, delivery and payment options? How will your site be visible to consumers? And which search engines will they be using to find you? What marketing and advertising channels will be most effective at building brand awareness and driving consumer demand? Should you work with a local marketplace partner? And how can you develop relationships with consumers through social media?

To grow your brand and sales effectively in a new country, your marketing strategy must be informed by local understanding at every step.

This report explores key issues that are critical to UK fashion brands considering markets both in Europe and further afield. It provides insights for those looking to grow their existing presence, as well as those looking to launch into new international markets for the first time.

With a $238bn opportunity in the south-east Asian market, according to ASEAN website aCommerce Group, it is little surprise that there is increasing interest from UK fashion brands and retailers in the region.

At Its Cooler, we have seen a boom in the Thai ecommerce market, which is why we are launching our portal offering in the market for overseas brands in the coming months. This market is growing at a phenomenal pace, driven by a fashion-conscious Thai consumer who always has a smartphone in his or her hand, and who is obsessed with social media and buying the latest must-have brand.

In Thailand there is a large, wealthy market with a thirst for overseas fashion brands that are new and exciting. This presents a big opportunity for UK fashion brands looking to reach out to a new consumer. There are also significant and growing Chinese and expat populations here, many of whom are moving to Thailand to live and work.

However, while the market is very large – south-east Asia is the fastest-growing market online, according to Google and Temasek – there are many restrictions. Thai consumers can’t use their debit cards because the one-time PIN (OTP) security measures they have are not recognised on western websites. Consequently, it is quite hard for British and European brands to retail their products online.

Additionally, Thai customs sometimes over-value the price of imported goods leading consumers to pay far more for items in excessive duties than they anticipated. Its Cooler eliminates this worry, as we include all import and delivery costs at a fixed price.

This is why Its Cooler is launching in Thailand, to help overseas brands enter this increasingly lucrative market. However, it’s not just here. There is a similar boom happening in Malaysia and Vietnam, which are two south-east Asian markets we plan to launch in the imminent future.