The world of international eCommerce is never dull, and it's not without its challenges either. Now more than ever, businesses must find ways to keep up with an ever-changing global landscape.
From ensuring compliance with local regulations to managing customer expectations on site and when shipping abroad, taking your business global can be complex and time-consuming.
9 Challenges Facing International eCommerce
Today, we'll explore some of the biggest challenges facing international eCommerce while also looking forward to the future. With the right knowledge and strategies in place, your online business can be ready for success no matter where in the world it operates.
1. Payment processing
We've seen an increased focus on secure payment processing lately, and for good reason. Not only does it protect customers from fraud and identity theft, but it also helps build trust with potential customers who may be wary of buying online.
To provide the best customer experience possible, your eCommerce business needs reliable payment processing solutions that can handle different currencies and regulations.
Doing this isn't always easy, though. Payment processing platforms (along with regulations and customer expectations) vary from country to country. What works in one market may not work in another, so businesses must tailor their payment solutions accordingly.
For example, when it comes to currency, businesses should always consider offering local currencies so customers don't have to pay extra for currency exchange.
Localization challenges international eCommerce businesses trying to tailor their site and content for customers in different countries or regions. Local customers should feel at home when shopping on an international eCommerce site.
How can eCommerce businesses do this? For starters, it's important to localize the website design and content. This might involve presenting multiple language options for your site, representing your customer's native language, and providing pricing in local or preferred currencies. This way, customers can experience your business in ways that are familiar and comfortable. The key here is to consider how to customize the customer experience while maintaining a brand identity across different markets.
Another requirement for global eCommerce businesses is offering local payment options such as bank transfers, virtual wallets, and mobile payments—all of which are more commonly used outside of the US. Making sure these payment methods are available on your site can help increase conversion rates and grow sales.
Addressing these opportunities will have a significant impact on conversion rates. This means more revenue.
3. Taxation, language, and cultural barriers for international eCommerce businesses
International businesses in various industries face challenges that come with language and cultural barriers. This is especially true for eCommerce businesses, as customers might be unfamiliar with the company or product offerings.
Overcoming this challenge means looking for ways to make eCommerce site content accessible to a global audience. For example, localizing websites and adjusting the design to fit different cultures. It also means training your customer service teams to handle inquiries in multiple languages whenever necessary.
International businesses should look for ways to personalize the customer experience. This could involve product recommendations and discounts tailored to customers' interests or locations. Additionally, finding ways to enhance the checkout process with localized payment solutions can help create a more seamless shopping experience.
This also means it’s critical to have local authorization capabilities. This relates to the concept of offering local currencies, in that if you aren't processing locally, (e.g. you merchant of record isn't in the country), merchants will notice an increase in authorization declines. Along with costing the business money, it also damages the brand’s loyalty too.
International businesses deal with the added challenge of understanding taxation requirements in each country they do business. This is crucial for all international eCommerce businesses, but when your business operates in many different countries, this gets convoluted and overwhelming.
One option for simplifying the process is using a software-as-a-service (SaaS) solution that automatically calculates applicable taxes for each customer based upon their country. This eliminates the need to calculate taxes on orders manually and helps ensure compliance with international tax regulations.
It also gives customers an accurate real-time breakdown of their order cost—a big part of providing transparency throughout the checkout process.
Businesses rely on global eCommerce platforms to help them overcome these issues. However, cost can be a limiting factor for many. This highlights the importance of turning to professional, reliable, and cost-effective payout and payment orchestration platforms like MassPay.
4. Regulatory compliance
Navigating different countries' regulatory requirements is notoriously tricky—especially when trying to balance protecting customers while delivering products quickly and efficiently.
Various software solutions can help with this, including tools designed to automate compliance processes. For example, some solutions automatically flag documents that need to be updated or ensure data is secure and compliant. In the long run, this benefits eCommerce businesses by eliminating time-consuming manual tasks related to regulatory compliance.
5. Fraud prevention
International fraud poses a real threat to eCommerce businesses and their customers. For the customers, it often means having their data stolen or used without their permission. For the business, it can mean lost revenue and a damaged reputation.
To prevent fraud on international eCommerce sites, businesses must invest in secure payment solutions to protect customers' data—this is non-negotiable in this day and age. Businesses should also employ fraud prevention tools to verify customer identity before processing payments. Another option is using machine learning algorithms to identify suspicious activity and flag potential risks early on.
By taking steps like these, businesses can protect themselves and their customers from fraud while delivering an excellent shopping experience across different markets.
6. Data security
Regarding data security, protecting customer data under international privacy and data security laws is vital for any eCommerce business. The General Data Protection Regulation (GDPR) is an example of a law that puts customers' data privacy first, and businesses must take steps to comply with it.
Although this is incredibly important and serves a vital purpose, it also comes with challenges for eCommerce businesses struggling to meet the stringent requirements.
One way to ensure you comply with GDPR is by using secure payment solutions such as tokenized payments, which mask sensitive customer data and encrypt it for extra security. Further, businesses can implement data encryption tools and robust password protocols to protect against unauthorized access.
7. International eCommerce logistics
Securing reliable international logistics partners and optimizing global supply chains are two of the biggest challenges facing international eCommerce businesses.
To know their orders are delivered to customers on time, businesses must secure reliable partners that can handle delivery across different countries. They must also consider factors like customs regulations and how best to manage their global supply chain for maximum efficiency.
To help with this, various software solutions can be put to work on optimizing supply chains and automating inventory tracking and management. This helps streamline the process and ensures business owners always have visibility into what's happening in their global warehouses.
8. Customer service
Providing effective customer service for customers in a single country and in only one language is challenging enough. But when customer service must meet customers' needs in multiple countries and languages, it can be even more daunting.
To make sure customers receive the same level of service regardless of their location or language preference, eCommerce businesses must invest in customer service solutions specifically designed for international customers. These solutions should include features like multilingual support and automated responses to common customer queries.
That way, you know your business offers efficient and consistent service at all times. You might also incorporate other self-service options such as online FAQs, product guides, and tutorials to reduce the burden on customer service teams.
9. Cross-border shipping / 3PL
Another key challenge facing international eCommerce involves cross-border shipping. Developing efficient and cost-effective cross-border shipping and fulfillment processes involves considering different taxation laws, customs regulations, and carrier services—to name a few concerns.
At the same time, businesses must keep customers in mind throughout all this. A smooth shopping experience is essential to customer satisfaction—ensuring orders arrive on time and in good condition. Not to mention keeping costs low whenever possible.
Learn More with MassPay
Ready to learn more? Get to know MassPay to see how we can help your international eCommerce business overcome its biggest challenges in 2023 and beyond.