Foreign importers have made their presence felt in the domestic eCommerce market, and evidence suggests they’re here to stay. The exact effects on our retail economy remain to be seen, but the specter of foreign competition should be a strong motivator for domestic businesses to update their eCommerce offerings, and consider launching their own export program, backed by a strong Functional Marketing Plan.
Importers Threatening American eCommerce
In late 2014, American retailers were nervous that Alibaba, dubbed the “Chinese Amazon,” might have a stronger impact on domestic small business than its American counterpart. Alibaba’s IPO was the biggest in Wall Street history, due to it’s already established success in China, as well as the fact that a sales tax loophole meant Alibaba and other Chinese eTailers can import individual orders tax-free. Analysts feared this meant doom for American electronic retail, but eventual reports of counterfeit goods, and dealings with unlicensed retailers, caused a $70 billion drop in Alibaba’s stock in early 2015.
While Alibaba never lived it to the media’s hype as an eCommerce boogey-man, they’re far from the only player making big moves on our shores. EBay has set up a counterpart Chinese domain: www.eBay.cn, with the goal of helping Chinese exporters sell to the US, and are leveraging an existing partnership with PayPal to provide a secure and seamless checkout process already familiar to American consumers.
And even though many goods sold by domestic retailers may have been manufactured overseas, it’s becoming increasingly convenient to buy directly from a foreign importer.
Imported products are predominantly sent to US distributers in large container shipments, whereas products sold straight to the consumer are sent in smaller parcels. According to several CEO’s in California, container shipments into the Ports of Los Angeles or Long Beach are taking longer to clear and direct small parcel shipments are getting through customs faster. Small parcel inspection is minimal and the process less tedious than container shipments. Alongside the sales tax loophole, this means it may soon be easier for American consumers to buy directly from Chinese eTailers, rather than an American eTailer importing Chinese goods.
An Opportunity for American Exporters
This foreign infiltration into our markets will certainly change the game. But so far, it’s far from the death sentence foreseen by many domestic doomsayers. Professor Gene Detroyer, an expert on Entrepreneurship and Business Strategy at European School of Economics, sees the incursion of foreign competition as more of a wake-up call to American manufacturers. “If Main Street is looking at the sales tax issue as what is going to put them out of business, then they are going out of business!” he said. “They have to look at the trends in retailing. Online retailers are not successful because they do or don’t charge sales tax. They are successful because they are online. The price competition presented by mass retail and big box is far more challenging than the issue of sales tax.”
Professor Detroyer’s analysis cuts to the root of the issue: if all it takes is a tax break to sink domestic manufacturing and eCommerce, then the battle was over before it ever begun. Domestic business still has a fighting chance, and its most readily available advantage is online marketing. American companies have the edge when it comes to familiarity with domestic consumers, which means a strong website and branding approach can be a lethal sales weapon if utilized properly. Exporters can find a strong foothold as well, since the United States is still a cultural tastemaker internationally. People all over the world still buy our jeans, watch our movies, and idolize our celebrities, giving American brands a foothold when it comes to advertising overseas.
Whether your product is sold on our shores or internationally, your Functional Marketing Plan and branding should be tailored to your target audience. Identify your target market, and then research trends in price, online marketing strategies, social media, and online advertising. Exporting your product internationally can mean exponential growth, but it also means being sensitive to how your branding is interpreted in foreign markets. Consider how your content marketing approach — the articles, blogs, and other updates that populate your website — is interpreted by local and international markets, taking into account language and cultural considerations.
Taking your business into the global arena may mean reworking your entire marketing plan, but the extra effort can pay off in dividends. Establishing an export chain to the right foreign market will tip the supply and demand scale drastically in your favor. If you’re ready to take the step toward exporting, consider consulting an international marketing specialist to begin drafting your Functional Marketing Plan.
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