E-commerce is flourishing most impressively in English-speaking countries, but a tremendous market is being missed for marketers outside of these countries, as people there are going online fast, especially in Europe. We will discuss the main factors that are responsible for the development of e-commerce in countries where other European languages are spoken besides English, and show a few examples of U.S. companies who are successful in using their Website to develop international e-commerce. My intent is to encourage the reader to look outside Anglophone countries for online export sales.
Globalization
Globalization has become the most dynamic force of our time, along with the movement to go online. The Web has helped barriers come down between countries, and there is a strong drive today to address foreign markets. Globalization has already been highly developed between Anglophone countries, thanks to a common language. But then again, there are only 6 countries where English is the mother tongue: the U.S., Canada, the U.K., Australia, New Zealand and South Africa, all told, some half a billion people.
European Languages Flourish Online
Let us understand the facts on the relative online populations in countries where European languages are spoken (not English). According to the latest statistics (www.euromktg.com/globstats), 82 million people people access the Internet from Anglophone countries, whereas 41 million people access the Internet in other European languages. This non-English figure represents astounding growth, since only 20 months ago, there were only 7 million people in this category, and now there are 41 million: nearly a six-fold growth in 20 months. (As a point of reference, Asian languages today represent 18 million people online.)
German-speaking Europe will be first to see strong growth of e-commerce. The Multimedia Director from top German publisher Bertelsmann recently stated that the German e-commerce market should grow to $23 B within a few years, which will represent 5% of German retail revenues. France will follow, since the teletext system known as Minitel has been in use since 1981, and e-commerce last year saw $3.3 billion sold online (over the Minitel). (Compare this figure to the $11 billion sold by e-commerce last year... worldwide.) Indeed, 20% of the French have already purchased online, in comparison with 3% of the American population.
Why Europe?
Out of all the major world trading blocks, Europe is the largest one. With Asian financial markets tumbling, no one in Asia is buying any more: Europe is in a growth period now, and has become quite attractive as a market to address. In fact, European markets are rich markets, with a combined GDP of one trillion dollars more than the American GNP, and with a population double that of the U.S. As Eastern European countries come into phase with Western Europe, the entire European economy should tend towards a combined GDP level 50% more than the U.S. economy.
What's Happening in Latin America with E-Commerce?
E-commerce is virtually non-existant in Argentina (S. America's leading country next to Brazil), according to a top Argentinian online marketer. Except for a few people who buy online CDs and consumer electronics products from American suppliers. Most of the payments inside Argentina are done via mail or bank transfers and checks. Use of credit cards are growing, but is not the most used method. The rest of Latin America appears to be in the same level.
The Euro
Starting in 1999, European currencies (like the German mark, French franc, and Italian lira) will merge to become the Euro (
), and by 2002 local currencies will be completely phased out. The economic benefits will be many: the Euro will make prices transparent across Europe, thus lowering prices. It will enhance competition by forcing companies to concentrate on price, quality, and production instead of hiding behind weak currencies. Best for Internet vendors, the Euro will make it easier for non-European companies to enter European markets. (See this excellent article on the Euro.)
These three factors -- the globalization effect, Europe coming online fast, and the creation of the Euro currency -- might very much act as a "triple whammy" to accelerate e-commerce beyond anyone's expectations in the next few years. It might even "wipe out cash", according to the Chief Technology Officer at Siemens-Nixdorf (see TechWeb). He thinks the replacement of cash with e-money will be repeated later in the U.S. and in the Asia-Pacific region, which will lag behind Europe. While this conclusion may be a bit exaggerated, it certainly emphasizes that something extremely important is coming to pass in Europe in the next few years. Companies who want to benefit from the fruit of the combined introduction in Europe of e-commerce and the Euro had better start building and tuning their export sales machine... online.
Drawing Customers to a Website
Most Websites in Anglophone countries only give information about their offering in English, and the small numbers of visitors who come from non-Anglophone countries arrive more by chance than by deliberate marketing. Most Webmasters think that other languages on their site are extraneous, since "everyone reads English": they have simply missed the entire point of what marketing is all about. Promoting a Website, marketing its URL, is a matter of communicating for the first time to unknown people, or drawing their attention to the site. And outside of Anglophone countries, English is never used to communicate a marketing message.
Europeans have been using many languages in selling to each other for centuries, and they recognize that marketing has to happen in the language of the target market. As Willy Brandt, the former German chancellor, once said: "If I'm selling to you, I speak your language. If I'm buying, dann müssen Sie Deutsch sprechen [then you must speak German]." If you look at many European Websites, you will see that 5-10% of them use at least their country's language, English, and often a third and fourth language. Of course, the other 90% are for national coverage only and do not even offer English on the site.
The best and most economical way a Website can draw visitors from non-Anglophone countries is to have a few important pages translated, and promote those "gateways" into the site, in each targeted country. A passive approach (leaving the site only in English) will yield one-fifth or one-sixth of its visitors from non-Anglophone countries. An active approach (translating and promoting the language gateways) can yield up to one-half (or more) of its visitors from non-Anglophone countries. The impact on sales is significant.
Case studies:
At the top end of the scale there is Charles Schwab, the extremely successful online stock brokerage, with $26 billion of investments made online last year. They opened a Chinese part of their Website in May, 1998, backed up by a Chinese e-Team that is dedicated to supporting the on-line investing needs of its Chinese speaking customers.
Another success story is Dell Computers, who has translated their site into most every language. Of the daily $5 million of sales coming through their Website, $1 million comes from abroad. The proportion of international sales to total sales should grow considerably, since mature PC vendors (such as Compaq) draw two-thirds of their sales from abroad.
Cyberian Outpost is a computer ware distributor who sells only online: one-third of their sales come from outside the U.S. Historically, they had a foothold in Asia (mainly Japan) before Europe, and Japanese sales are still stronger than in Europe. They realize such a success by translating the most important four pages of their site into 9 languages (soon 12). These "language gateways" have only been registered in the large, international indexes, not the local ones in each country. However, they do advertise on Lycos (which is available in 9 languages), and this accounts for a lot of traffic from international audiences.
Spyzone sells spy equipment both online and offline. Their site uses 6 languages to introduce visitors to the company in their own language for the last two years, which has given them terrific response -- technology transfer deals, new resellers in certain countries, and lots of international sales, some quite large. In fact, more than one-third of their overall sales comes from abroad, much of it coming from people finding the Website. They registered with many foreign indexes, so people could find them if they looked for certain keywords. Banner ads are also used, as well as print advertising for their retail outlets, which includes the URL. The end result is some 400-500 email inquiries every month, and a reasonable percentage of these leads become clients.
Sportsline reports on sports news. They translated much of their site into Japanese, as well as a "gateway" page in French, German and Spanish, all of which are registered in indexes. The result is that 30-35% of their overall site traffic comes from outside the U.S., with approximately 20% of their e-commerce sales coming from international customers.
A small U.K. company, Eagle Machinery Ltd., has had enormous success with their 4-language Website, as 60% of their sales come from leads from the site. They decided to localize their site early on (2-3 years ago), and now find that half of their traffic comes from non-Anglophone countries (mainly the European continent). They also advertise on Yahoo's main U.S. site, and once visitors arrive at their site, they can choose their language. The company did not have the budget to hire outside consultants to translate or register the translated pages into the European indexes, so this work was done by friends. It seems to have worked well, considering that 30% of their sales come from the English part of their site and another 30% comes from the non-English part of their site.
In contrast to U.S. sites, where a multilingual format is extremely rare, there are many examples of European companies successfully using a multilingual approach on their Website to build sales. Popular languages to use on these sites, besides English, are German, French, Spanish and Italian. Here are some examples of European Websites that contain several languages for wider audience:
- Kenzo (fashion)
- Damart (household appliances)
- Floritel (flowers)
- Michelin Travel (the tire company that also publishes a complete series of travel guides)
- Relais et Châteaux (top hotel chain)
- Bordeaux Wine
- Swiss Army Knives
- U.K. tire company
- Disneyland Paris
In conclusion, I would strongly encourage taking international markets seriously in order to stay in the running. History shows that new entrants into a virgin market can often lock it up, so that it is quite difficult later on for competitors to enter. Competition is heating up very fast, and if you do not properly address foreign markets, your competitors surely will... no matter which side of the Atlantic they come from.
Written by
Bill Dunlap
Managing Director,
Euro-Marketing Associates
ema@euromktg.com
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