Thanks to the continuous advancement of technology and e-commerce, starting sales in the global market has become easier than ever. However, to successfully launch your business overseas, simply applying your domestic success strategy is not enough. To enter the global market, it is essential to first select your target country and accurately identify the customer base you need to focus on in that market.
Many companies try to expand overseas based on their success in the domestic market, but each market has unique characteristics, and you must truly understand customer needs and preferences to enter successfully. To do this, you need to clearly identify your product's selling points and strategically define which market you are targeting and who you are selling to. Without thorough market research, even the best products may fail to generate sales. Therefore, accurately analyzing target market characteristics and customer needs is the key to successful global expansion.
The first question companies ask when starting global e-commerce is, “Where should we expand?” As of 2023, the U.S. invested the most in e-commerce (approx. $7 billion), but China recorded the highest sales ($1.23 trillion). Does this mean the Chinese market is automatically the right answer? Not necessarily. The priority is to deeply understand the characteristics of each market and identify where your product can be competitive.
China is the world's largest e-commerce market, offering opportunities for explosive sales through well-developed influencer marketing. However, the market is becoming saturated, requiring massive initial investment to enter. You must also consider the difficulty of guaranteeing sustained performance relative to those high initial costs.
The U.S. market, valued at approximately 1,469.6 trillion KRW as of 2023, is about six times larger than Korea's, yet the consensus is that it has not stopped growing. In particular, the online penetration rate for e-commerce is around 15% of the total retail market, which is half of Korea's 28%. This suggests significant room for growth. If high-speed internet penetration increases and the online penetration rate reaches Korean levels, the U.S.
e-commerce market has the potential to double to 3,000 trillion KRW. When selecting a target country, you must consider not just the sales volume, but also market growth potential, initial investment costs, and the competitive landscape.
After selecting a country, you need to decide which platform to use. As of October 2024, Amazon remains the world's largest e-commerce platform, followed by Temu and eBay. However, simply opening an account and starting to sell on these platforms is not enough. Because preferred e-commerce platforms vary by region, it is crucial to carefully select the platform that best fits your target country.
For instance, while Amazon has a high market share in the U.S., U.K., Germany, and Japan, 84.3% of its total traffic comes from the U.S. On the other hand, Alibaba is the leading platform in China, and Shopee holds the top position in Southeast Asia. Rakuten remains strong in Japan, while Amazon continues to lead in the U.K. and Germany.
Since each platform has its own unique features, operational structure, and customer base, it is important to consider these factors carefully when choosing the right one. In particular, you must account for the fact that logistics costs can be a significant burden when selling internationally. Amazon can be an optimal starting point for global expansion, as it effectively reduces these burdens through its global logistics network and user-friendly sales system.
You shouldn't assume that everything is ready just because you've selected a country, customer base, and sales platform. To actually start selling, you need various additional tasks such as localized content, marketing campaigns, and SEO optimization. In particular, you must strictly adhere to the different account management methods and requirements for each platform. Furthermore, it can be difficult to generate sales through online channels alone. In a highly competitive online market, it is difficult to achieve expected results without additional social media or performance marketing.
Influencer marketing is becoming increasingly popular as a strategy to boost brand awareness. However, because it involves high uncertainty regarding return on investment, choosing a platform that doesn't align with your customer base can lead to wasted costs. For example, TikTok is used by 67% of users aged 18 to 19 in the U.S. market; if this age group is your primary target, it can be an effective channel. If not, however, an approach through TikTok may be inefficient.
Selecting a target market and customer base is not the end of the process. You need a comprehensive strategy that covers which marketing methods to use, which tools and platforms to leverage, and how to handle localization. Many companies feel overwhelmed when starting their international expansion, not knowing where to begin or struggling to see results after entering a market. In such cases, seeking expert help can be a great solution. Working with experts can save you time and resources, ultimately leading to long-term cost savings.
As a global marketing agency, DISRUPT possesses the expertise to propose and execute optimal marketing strategies tailored to our clients' business goals. Composed of professionals from various countries, DISRUPT provides profound insights into target markets and supports effective global marketing. If you need services to help you enter the global market, please feel free to contact us.
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