As Taiwan’s e-commerce services have matured, online shopping has now been incorporated into the daily lives of people. This, compared to the preference for brick and mortar stores of European consumers, has posed to be the first challenge faced by many foreign e-commerce companies, including Taiwanese firms, in trying to develop business in Europe.
The Greatest Challenge for Taiwan Cross-Border E-Commerce?
As most cross border businesses in Taiwan look to enter the emerging Southeast Asian markets, or the world’s largest e-commerce market, the US, you seldom hear success stories of Taiwan companies in the European markets in comparison. Though the single market currency and well-connected geography are a major plus, some of the hindrances include the drastically differing consumer behavior, culture, and regulations between countries, posing considerable difficulties to companies abroad looking to the European market.
Oliver Prothmann, president of the German Federal Association of eCommerce (BVOH), believes that the main focus for Taiwan e-commerce businesses, will be to serve different consumers from separate countries, whilst optimizing the services and processes of cross-border retail. As the rules and regulations from different countries must also be followed, the challenges that Taiwan companies face in Europe will only increase, and not lessen.
The EU as a Whole Market is Full of Diverse Country Cultures and Differing Demands
As Taiwan’s e-commerce services have matured, online shopping has now been incorporated into the daily lives of people. This, compared to the preference for brick and mortar stores of European consumers, has posed to be the first challenge faced by many foreign e-commerce companies, including Taiwanese firms, in trying to develop business in Europe.
Responsible for the coordination of Germany’s domestic online retail and consulting on local regulations, Oliver Prothmann thinks that the e-commerce model is certainly impacted the traditional retail business, and will only continue to rapidly change the retail landscape and market. Oliver Prothmann took the New York men’s razor brand Harry’s as an example: after extensive consumer research and re-branding efforts, the company that was once known for selling low priced razors bought a German blade factory to produce higher quality razors. Operating as an online business and with lower operational costs, Harry’s was able to provide consumers a better shaving experience with an average retail price of 2 USD, compared to the average price of $4 USD from the first tier brands; the affordable price range has made the brand even more attractive to consumers.
A Must-Know for Cross-Border E-Commerce: Cultural & Regulatory Differences
Given the diversity of the local cultures and the differing regulations in the region, businesses growing their cross-border e-commerce operations in Europe will inevitably face challenges ranging from language barriers to customers’ expectations of after-sales service and delivery times; they may even need to consider the various types of AC power connectors and electromagnetic safety standards required in each country. For example, German consumers in general prefer brick and mortar stores, but those who are willing to give online purchases a try place great emphasis on how fast the delivery is. Meanwhile, in France and Italy, it is a must to localize marketing and promotional content, thus the companies selling from abroad must make efforts to create different language versions of their copy to be able to attract the local online customers.
Also, many trade and retail regulations within the EU have not adapted to the needs of e-commerce businesses, so businesses have to make sure they sell within the rules of each country; for instance, the design aspects of a product, the testing specifications and the after sale services may all have different requirements. At the same time, each country has its own set of standards for selling-related cash flows and product return policies, which makes the EU market as a whole quite challenging to tackle. But many e-commerce operators are still looking to gain a foothold, and many companies still wish to sell their products into Europe, a market of great spending power.
Advice to Taiwan Companies Looking to Enter Europe: Keep Calm and Start Small
Oliver Prothmann’s advice to those looking to enter the European market is to not be overly aggressive, start from a single country, and then slowly expand to the neighbouring regions. It is best not to lump the Europe market into one big market goal, as the very distinct cultures, regulations and consumer demands from each region will all pose harsh challenges for a business starting out. Moving slowing but surely and learning from each market is the best way to move forward.
Though the challenges are great, there are still many opportunities for businesses to grow. The traditional selling mode that most EU consumers still prefer point to the fact that there is indeed plenty of room for future growth, and “New Retail” modes will have great chances to continue to develop in Europe; policies such as 40 day returns and 3 day delivery services are all markers of a sophisticated retail market that foreign businesses can learn from.
At this year’s 2017 DATE SUMMIT Discover Advanced Trends in E-economy, Oliver Prothmann, with his extensive experience working for the German Federal Association of eCommerce and as a commercial law judge, will advise Taiwan companies on how to overcome cultural barriers, tackle regulation restrictions, and step into the international e-commerce playing field.
【Speaker Info】
President of the German Federal Association of eCommerce (BVOH) since March of 2014, Oliver Prothmann, along with his company p. Digital has extensive experience consulting for IT and e-commerce businesses. Before this, he has worked at PayPal, eBay and Deutsche Telekom managing the online selling businesses, and also served as a commercial law judge at the Berlin County Court in Germany. Founder of the pan-European independent association Choice in eCommerce, he has been a longtime advocate of the ecommerce industry.
Oliver Prothmann will be giving Taiwan companies with the ambition to “go global” candid advice on the challenges of entering foreign markets, including cultural barriers and regulatory differences. How can Taiwan e-commerce companies put their best foot forward in the international playing field?
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延伸閱讀
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