Thursday, March 21st, 2019
DHL’s recent struggles has shed some light into how challenging it really is for even the most successful companies to tap into global e-commerce markets. At the end of January, DHL announced that, as of April 2019, the global delivery company will terminate its e-commerce business in Chile, less than two years since its launch in the country.
DHL made the decision to launch an e-commerce service delivering shipment from online stores to consumers in Chile. The company likely felt very secure in this move, since the country is known for being one of the most stable economies in Latin America. However, multiple reports show that the venture did not yield the expected profitable results.
According to Chilean newspaper, Diario Financiero, DHL had endured some tough competition from domestic package delivery companies already serving Chile’s top retailers. In addition, even with the progress and stability of the country, Chile is still in a nascent stage of development. Obstacles like poor infrastructure and a lack of practical payment options prevent much of Latin America from expanding into the online marketplace.
The announcement has many looking closer at the challenges businesses face in expanding into a global e-commerce market, especially when there is a lack of understanding in how to effectively market in that location. Another concern are the obstacles involved in cross-border payments. Recently, Steve Villegas, a PPRO Group’s vice president of partner management shared his thoughts on the issue.
“A lack of regional knowledge and not offering a region’s preferred payment option are key disadvantages that hinder U.S. online merchants attempting to scale globally. Merchants cannot offer the same traditional payment options they do domestically to other international markets, expecting the same results,” Villegas wrote.
He went on to explain that “U.S. merchants need to adapt with the global market, be strategic and region-specific to capitalize on increased sales from consumers outside of the U.S., where 85 percent of the world’s purchasing power lies. Taking the time to learn and adapt to regions that vary not only culturally, but also in how they handle their money, will give any merchant that extra step in an already competitive global market.”
How to Successfully Take Your Company Global
If you are a growth-minded business owner, you likely view the rest of the world as your oyster. Depending on your ultimate business goals, international growth may be in your sights. Growing globally presents many advantages, including extending sales life of existing products and services, reducing dependence on markets you have developed and learning to compete against foreign companies.
Of course, expanding involves higher risk, as seen in the case of DHL. Here are a few questions you should ask yourself before taking the leap to go global:
- Will the product sell well in the targeted culture? Make sure you do your market research.
- Is your target market familiar with your product or service? If you’re worried they are not, be prepared to invest time and money in education.
- What is the current infrastructure like? Do you have the necessary accommodations and support? Are your supplies guaranteed? Make sure you examine each aspect of your potential operation from start to finish.
Do you need assistance finding a merchant provider that will also enable you to offer the very best payment processing solutions? Check out the information and reviews Best Payment Providers has to offer.
Topics discussed in this article:
- Global E-Commerce Market