GUEST COMMENT E-commerce is changing everything for international trade – Governments must get on board

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Peter Martinmanaging director of digital commerce agency SMP

There is a long and rich history of government trade commissions helping their domestic companies sell products overseas. When it comes to managing local legalities, connecting brands with buyers and distributors, and sorting out supply chains, they’re either experts themselves or know exactly who to call.

The problem is that retail has changed – and continues to change – at an unprecedented rate. It is no longer just about having Spanish, Brazilian or Indian brands on the shelves of Tesco and John Lewis. Digital commerce is the fastest changing business environment in history and many governments are floundering.

They are often more reactive and even if they have been proactive, they may not be up to the task. It’s important to have marketers on a trade commission, but will they know the intricacies of advertising on Amazon or social commerce on Instagram? (Even less on TikTok, given that the platform didn’t even exist five years ago?).

It’s a particular challenge for foreign governments dealing with businesses looking to sell in the UK, where mobile commerce is a given and almost 90% of shoppers use Amazon, with more than 15 million members of Prime. And yet, it’s also a G7 country with 67 million English-speaking and e-commerce savvy consumers hungry for new brands to try.

Who does this impact?

For some foreign retailers, this is less of an issue. Many fashion or tech products are much the same whether sold in the EU domestic market or exported to Africa (cable and plug types notwithstanding). But in categories like FMCG, especially food and beverages, the legal requirements differ wildly from country to country.

For example, you can sell alcohol on Amazon in the UK, but not in the US. Likewise, each US state has its own tax regime for e-commerce and some even require local distribution.

Additionally, foreign brands often face significant challenges if they move from a country where e-commerce is not as deeply rooted (France or Spain, for example) to one where it is. .

So they may suddenly wonder if the in-store shopping journey that has served them so well before is the right thing to do in the UK, where virtually everyone shops on their smartphone. Sometimes it will, but often it won’t.

Factors to consider

Foreign brands that already have a national e-commerce presence will need their governments to help them understand how to optimize that footprint in a new market. Those who don’t will need to think long and hard about using e-commerce in the UK, as it is frankly expected.

They will need to build a business case and that means understanding costs, margins and how they will need to change their packaging and marketing.

And yes, e-commerce has its own cultural nuances. It’s one thing to have the “right” photo of a family on the wrapper on the supermarket shelf, and quite another to ensure that the rich video content on your Amazon page has people talking with it. the right accents.

Building a better playbook

Governments and trade commissions are going to need to expand their knowledge base and update their manuals when it comes to helping overseas retailers sell in the UK – or indeed, in any digitally literate market. Some, like Japan or South Korea, already have a head start on the West.

Amazon could be a low-hanging fruit for some because of its scale as the UK’s biggest marketplace, but trade bodies will have to help domestic businesses decide whether to participate. This will not be the right solution for everyone.

While this is a good start, brands will need guidance on understanding whether to be a first-party or third-party seller, how to register for a seller account, how to advertise better, and how to identify and at the top right search terms. And that’s not counting tax and legal issues.

Looking at the wider digital commerce picture, brands looking to target younger consumers in the UK may want to look at TikTok Shop in particular – and again, this raises a host of questions that many governments will probably be ill-equipped to answer: how does it work? Is this the right channel for our brand? Is it better to broadcast live or create our own videos? Should we offer discounts? Are we partnered with existing creators through the affiliate program?

Not to mention other social platforms like Facebook or Instagram, each with their own approach to making the feed shoppable, and brands that want to make their existing e-commerce channels more appealing to UK consumers.

Children of evolution

Governments and trade commissions are going to have to step up their game if they want to provide the best possible advice to domestic brands looking to sell overseas. A process that was broadly similar for decades, if not centuries, suddenly had to change in entirely unknown ways – and it continues to evolve faster than most can keep up.

International trade is going to have to adapt as borders become more blurred, retail becomes increasingly global, and younger shoppers, for whom digital commerce is the norm, gain levels of disposable income. higher. It is incumbent on governments to help brands grow their e-commerce footprint overseas, otherwise these brands will fall behind.

Author:

Peter Martinmanaging director of digital commerce agency SMP

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