Continued, profitable growth is the mantra for most American e-tailers from small start-ups to large, multi-channel operations. And while traditional eCommerce growth strategies include product diversification, pricing modifications, and enhanced search optimization, e-tailers rarely consider entry into foreign markets. But, maybe Europe should get a second look.
eCommerce is booming—especially in Northern Europe
Indicators in the The Top 300 Europe 2011 Edition from Internet Retailer point out where opportunity exists. It’s important to start by looking at what percentage of the population is making at least five online purchases per year. The UK population checks in with 50%, Italy 18%, and Spain 17%. But if we’re talking about pure eCommerce revenue, the European countries break down like this:
- 1. UK $23B
- 2. France $15B
- 3. Germany $14B
There’s minimal U.S. presence in Europe
U.S. companies make up less than 10% of the top 300 servicing Europe, and only 8 of them are pure e-tailers. While the number of U.S. sites represented isn’t very strong, the revenue growth for their Europe operations is. In fact, 2010 revenue was up 25% compared to 7.4% total eCommerce growth in Western Europe.
It’s no surprise who is leading the pack either—Amazon is the largest eCommerce firm in Europe. Last year, they grew their European revenue 40% to $13B.
So, how do we get started?
Well, when you don’t have to worry about building brick and mortar stores, the process is much simpler. Most of Europe has the necessary technical and distribution infrastructure for ecommerce—plus, European Union regulations make crossing borders easy. In addition, the Euro has solved much of the multi-currency problem, and its value has been fairly stable.
Get the word out and generate traffic to your site with local, physical promotions as well as search engine optimization and marketing. Surprisingly, an eCommerce initiative can service all of Europe with just one or two distribution centers and local, phone-based customer support (with many outsourcing and partnership options to choose from).
Smaller, more conservative companies can even test the European market through Amazon. Of course, brand building and demand creation would come from your own site, but the sales and transactions would be funneled through Amazon.
Whichever option you consider entering Europe with, the numbers from Internet Retailer describe a strong group of markets. There’s plenty of immediate opportunity, and promise of continued growth, for American companies selling online in Europe.