eCommerce is a critical marketing battlefield between brands, and though it is true that pioneers and early venture capitalists will enjoy the low bearing fruits, newcomers have the advantage of hindsight — they can rely on the mistakes of early adopters and learn from them.
At Cloud Commerce we preach that it is good practice to establish some ground rules before embarking on any venture like eStartups for instance. Let’s get started.
At first we’ll talk about failure, specifically; how you can fail as an eCommerce startup.
HOW TO FAIL IN NEW and EMERGING MARKETS
Once an e-Startup has established the countries that are ripe for growth, and the ones that they want to target, their next step is to develop the strategy for entering new markets. Let me introduce the five ways that can assure you a failed attempt at expanding or even entering in the overseas market.
Replicate Your Business Model
The most well-tested business models are simply experiments with high repeatability, under specific circumstances. The slightest change in market conditions, demographics, and buying choices can force the startups to review their model, scale it, and make amends to remain market competitive.
These tested and proven models will fail in emerging countries.
Primarily because the whole market landscape has changed. A lot of companies, founders, CEOs, and executives believe that their U.S based business models (or based in any developing country for that matter) can easily be tweaked, and their processes scaled or morphed according to the local laws and business practices.
I’ll be severely blunt here: read modern history and learn from it. You cannot simply try to colonize another landscape (the market in this case) and impose your values or model one way or the other, and believe that it will work. It will only generate anomalies; ones that we’re still trying (and failing) to control.
The marketplace is no different.
Your existing business model is targeting a specific consumer group existing in a specific market niche that has grown out from realizing the needs or wants of the consumers in the market as a whole. You can profile them and understand them while assuming certain similar/overlapping values, behavioral traits, and certain marketed and propagated perceptions about needs, wants, and consumption.
Your current business model isn’t good enough, and there are a lot of hard facts to be researched ahead before you can start thinking about the new business model. You’ll need to understand the new culture and their ingrained values, the marketplace and how their culture affects them, and then re-profile your target audience.
Testing the new model that emerges from this endeavor is a thought on the horizon.
Assume Recognition and Entitlement
Your product may be a household item in every home of your target audience, and your brand awareness campaigns and stellar service may have changed your brand name into a verb or an adjective even, but you cannot (must not) assume that your brand is known in the new markets.
It’s just another local brand with a local product in a country on the globe.
So, it’s back to the drawing board for your marketing strategy and campaigns.
Set Unrealistic Expectations
This is a corollary of the previous point. Remember your initial days of marketing campaigns where you had to spend every waking hour thinking up creative ways to get it right. Remind yourself that it will take time to establish yourself (leave growing for the moment) in the new market within a new country. Avoid creating KPIs that compare the progress of your established business with the new one.
Choose the Wrong Local Partners
Maybe you’ve pulled together a great team at home, one that has conducted exhaustive research on the new market. You may even believe that you know the market more than the locals do, that you have better insights into its working, and now you have created a business strategy to take the market by storm.
Many will miss the end point-of-effort in this whole picture. It will be the local partners in that market that will play an integral role in properly executing your business strategy.
Have you found the right local partners to take your business through the tough times? Unless your feet are firmly planted on the market floor, and you actually have built a local team in the emerging market of choice, you cannot hope to accomplish much.
Avoid Investing in a New, Country-Specific Website
Google translate is a good tool for translating foreign websites, but just for the fun of it. Translating saps the message of the actual, local, and culturally entrenched language, metaphors, and expressions. There is no marketing, just plain communication of a non-engaging message.
A lot of companies are simply investing in creating a website and simply translating their original message into the foreign language. What is actually needed is original content for your marketing campaign, in the voice that the local people understand, can relate to, and engage. Hence, having a simple “.in”, “.cn”, “.br” as a domain suffix will not make your business become part of the market environment. eStartups vying for local masses’ attention need to add more original content (created locally and targeting the local populace) to their content strategy.
Let’s get into the surviving and thriving mode for your eCommerce startup.
A TALE OF TWO STRATEGIES
I’ll start with the two blunt, battle-tested rules of thumb. Call them strategies to avoid failure if you may. They are:
#1 — Put Working Systems at the Core of Your eCommerce Model
Build your eCommerce model around business functions, rather than people.
Yes, when it comes to developing your eCommerce strategy, your focus should be on defining your business functions and developing long-term systems for your eCommerce venture. Your focus should be on building a structured system organized around these business functions so that your startup departments can work at optimal levels. For example, prime departments could include tech, HR, marketing, finance, etc. As a result, you’ll have a business model where systems run the business while people run the systems.
While defining these systems, their workability should address their sensibleness (and hence ease of use) by employees and potential investors. This is where developing integrated CRM, POS software, and relevant APIs for integrating other business systems into a holistic unit come into play. Furthermore, it facilitates your startup launch by increasing viability and dramatically cutting time to market.
Though it may sound a bit mechanical and representative of the caricature idealization of business centered execs, but Michael Gerber did hammer the point just right:
“Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant.”
It’s harsh, but true.
No other tech startup’s success is more enslaved to technology and robust business systems than eStartups. You need to have a great team, but you also need sound, well structured, and lasting systems representing well defined business functions. You need seamless automation and transparency across all systems to boost your data collection for your Big Data bank and hence increase the power of your analytics.