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Tracey S. Roth

Dot Com Commerce

Managing Editor, [email protected] CENTER Solutions

[October 6, 1999]

Innocents Abroad: E-Commerce Across International Borders

One of the most wonderful potentials of the Internet is that it knows no borders. I can send an e-mail to my friend in Geneva just as readily as I can e-mail my friend in the next town. This attribute is what should be making the international e-commerce market so attractive to U.S. e-tailers. Internet usage is explosive in Europe right now, with the U.K., Germany and France leading the pack. The other interesting news is that international retailers are exceptionally slow to bring their products to the Internet. Hmmm…a lot of potential buyers, but not a lot of sellers? Smells like opportunity.

Jupiter Communications recently completed a study that estimated 4.2 million Europeans shopped on the Internet in 1998, a number which represents 13.5 percent of the online population. The study predicts tenfold growth to 41.5 million by the year 2003, or 43 percent of the online population. On the flip side, only 35 percent of traditional European retailers are offering an e-commerce sales channel.

Yet, a great deal of U.S. companies have not ventured out into international cyberspace, very probably due to both isolationist viewpoints and because of the number of potential hurdles to overcome. Many of the companies that went blindly into ventures to sell their products overseas have failed, mostly due to a basic navet about international business that flourishes in American companies.

Everyone On The Internet Speaks English, Right?
Many American companies' attempts at a foreign presence in international e-commerce can be likened to an American tourist in a Paris caf -- standing up and yelling "Waiter!" in English, and then wondering why he receives indifferent service thereafter. Visit the Web sites of many international companies and you'll find options to view the material in different languages. European companies, in particular, are accustomed to doing business in a variety of languages. American companies have thus far been challenged in this department. Yes, many international Netizens speak English. But should they have to? In the competitive environment of e-commerce, the ability to buy a product in their native language may be the plus that tips e-shoppers over to your competition. This issue aside, even if surfers speak English, they are likely using search engines in their native languages. Are they even going to find your English-language Web site? Probably not.

So which languages do you pick? That depends on the target market for your product. Are you going to succeed in selling processed cheese products to French consumers or a book entitled Speak German In Three Easy Lessons in Austria? Target markets aside, most experts agree that the three most important Web languages after English are French, German and Japanese.

Some examples of U.S. companies that currently offer alternative languages on their sites include Oracle, which offers over 30 languages; Nortel Networks, which offers five; and Hewlett-Packard, which offers about 25.

Marketing Faux Pas: Biting The Wax Tadpole
Many of us have heard the amusing anecdote that when Coca-Cola first began marketing in China, they translated the sounds "Coca-Cola" into Chinese characters, only to find that the characters literally spelled the phrase "Bite the Wax Tadpole." This was an expensive mistake. Coca-Cola was able to absorb the costly error: chances are, you can't. On a more personal level, I recall an incident in which my father, the trade show manager for a large U.S. electrical and electronic connector manufacturer, brought his company's booth to a Japanese trade show. After a series of Japanese businesspeople walked by the company's booth giggling, my father discovered the company's logo was exceptionally similar to a Japanese symbol for a house of ill repute.

Language differences aside, different cultures can have very different purchasing habits or react in an unpredictable way toward American marketing techniques. Amusing people with your errors is one thing -- offending them is far worse. Never presume to wade through cultural and language differences on your own -- always seek help from individuals who work in the countries into which you are seeking entry.

Marketing Successes
Translate your site in a foreign language and e-shoppers in that country will flock to it. Right? Not likely. Without appropriate marketing efforts, you can almost guarantee failure. Banner ads, press releases, print ads and e-mail marketing (in your target markets' languages) become even more necessary in foreign countries. To date, banner advertising is uncommon on foreign sites, so it currently represents a unique opportunity for exposure.

Payment Issues
One consideration to keep in mind is that elsewhere in the world, credit card ownership is not as prevalent as it is in North America. American and Canadian companies conducting e-commerce in their own countries can assume most of their online shoppers possess credit cards. Enter your credit card number and expiration date, and the transaction is good to go. Not necessarily so in other parts of the world.

The good news is that in Europe, the Euro is here. By the year 2002, the local currencies of many of the member nations of the EU will be phased out in favor of this common currency. This will be a bonus for U.S. and Canadian companies seeking to do business in Europe. The confusion of keeping track of conducting sales transactions in anything from Austrian schillings to Portuguese escudos will be eliminated.

China On The Horizon
It's hard for American companies to resist fantasies about breaking into Chinese markets. It's huge, growing economically and ripe for Western consumerism. It has also been a love-hate relationship for many companies that have attempted to do so. Chinese consumers are hungry for Western products, but the Chinese government, to put it mildly, is not. In mid-August of this year, the Chinese Public Security, State Security and Information Industry ministries jointly issued an order to Chinese Web site operators to remove all links to foreign sites. The reason cited was a concern over the penetration of Chinese sites by "foreign hackers." More than a few analysts, however, predict such orders are an attempt to block the penetration of Western consumerism into China. Many American companies continue to operate in China, in an often inconsistent and sometimes bewildering atmosphere. Still, for companies willing to take the risks, the opportunities are tremendous.

Elsewhere in the news, we can read this week that beginning in January 2000, India will initiate online trading. In early September of this year, DUTYFREEZONE.com, the Internet-based version of the stores that appear in the international terminals of airports, opened for business to take advantage of the natural compliance of e-commerce with international customs laws. For those companies willing to think globally and make an effort to shrug off isolationist thinking, the e-commerce world can become their electronic oyster.

So…in an effort to start you off, it's le commerce lectronique in French and der elektronische Handel in German.

Tracey S. Roth welcomes your comments at troth@tmcnet.com.

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