Global Champions. Conducted by. In partnership with:

Transcription

1 Global Champions Study Conducted by In partnership with:

2 Table of Contents Introduction...3 Executive summary...4 Online businesses lead the way in international sales...6 Online businesses go global faster...7 Online sales reduce need for local teams...8 Global sales winners by industry...9 Travel industry expands the fastest...10 Global players sell in 6 countries on average...11 B2B and B2C head to head in global sales...12 Bilingual, multicultural staff has positive impact on global sales...13 Multilingual sites have 5x more international sales...14 Significant translation differences between Europe and North America...15 Most businesses have bilingual directors...16 Majority of companies export to neighbors or countries on the same continent...17 Success story: ASOS...18 Older companies sell the most abroad...19 Younger companies start selling abroad the fastest...20 Profile of a global champion...21 Key steps for successful global expansion...22 The study...24

3 Introduction In today s global business environment, almost all companies are faced with the challenge of looking beyond their borders to reach more markets. They often wonder what qualities make up a successful international company. We at TextMaster decided to find the answer. We surveyed hundreds of companies in a variety of industries and countries to find the underlying factors that global businesses share. We would like to thank our partners who helped make this study possible:

4 Executive Summary While every company and industry have their own combination of factors for international expansion, there are a few common aspects that successful businesses share. Companies that operate primarily online have 3x more international sales, go abroad the fastest (after one year) and reduce the need for regional offices. Higher online sales also mean that even young companies (less than 1 year old) can quickly expand internationally. Companies that sell abroad reach an average of 6 countries. Businesses with multilingual websites have 5x more sales abroad. Companies with bilingual directors and multicultural teams have 2x more international sales. B2B companies have caught up with B2C and hybrid companies in terms of international sales. Older companies (more than 50 years old) sell the most abroad, but this changes by industry; in the software sector, the companies that sell the most internationally are only one year old. 4

5 Executive Summary Other key findings: The industries with the highest global sales as a percentage of total revenue are consumer goods, software/apps, and fashion/luxury/textile. The industries with the lowest global sales are arts & entertainment, automotive/transportation and publishing/media. The industries that expand internationally the fastest are travel/tourism, software/apps, and web agencies/communication/pr. The industries that take the longest time to expand abroad are real estate/construction, health/ biotechnology and publishing/media. International maturity varies greatly between North America and Europe, with three out of four European companies translating their websites and having bilingual directors. In contrast, more than half of North American companies do not translate at all and do not have bilingual directors. More than half of companies target their neighbors or countries on the same continent. 5

6 Online businesses lead the way in international sales One of the biggest indicators of international sales is the proportion of business conducted online. Higher online sales are strongly correlated with more sales abroad. Brick and mortar businesses barely reach 14% in international sales while pure online players achieve more than 40%. This may be due to the fact that online business is easier to scale at a global level as it primarily involves adapting the website and marketing materials to the local market rather than establishing a physical local branch of the company. % of online sales vs % of sales abroad 40% 30% 20% 10% % of sales abroad 0% 1-25% 25-50% 50-75% % % of sales online 0% 6

7 Online businesses go Global faster Not only do online businesses sell 3x more abroad than traditional companies, they also do it much faster. 47% of companies whose online sales were more than 75% of their business expanded abroad in just one year. In contrast, the majority companies with no online sales either took longer than 6 years to expand or did not go global at all. Global expansion time of companies with online sales over 75% Global expansion time of brick and mortar companies 1 year 15% 19% 2-3 years 9% 4-5 years 4% 47% 55% 9% 5 + years 5% Never 26% 12% 7

8 online sales reduce need for local teams The findings show that more than 2/3 of brick and mortar companies rely on local teams, whereas 2/3 of online players (more than 75% online sales) prefer to use a centralized structure. This may be due to the ease of localizing online content from a central base and a lesser need for human interaction, compared to traditional brick and mortar companies. Centralized organization vs local teams Local Teams Centralized 70% 60% 50% 40% 30% 20% 10% 0% 0% 1-25% 25-50% 50-75% % % of online sales 8

9 global sales winners by industry International sales as % of business per industry Consumer Goods Software/Apps Fashion/Luxury/Textile Travel/Tourism Banking/Finance Ecommerce Online Publisher Health/Biotechnology Web/Comm/PR Agency Real Estate/Construction Publishing/Media The industries with the highest proportion of international sales are consumer goods (38%), software/apps (35%) and fashion/luxury/textile (34.8%). Not surprisingly, these are also the industries with the highest online sales. The majority of businesses operating in arts & entertainment (86%), automotive/transportation (82%) and publishing/media (79.5%) do not sell internationally at all. Regional differences, including regulatory and financial, as well as cultural preferences, have a big impact on companies in these industries and can pose significant barriers to entry. Auto/Transportation Arts/Entertainment 0% 10% 20% 30% 40% % of sales abroad 9

10 Travel Industry expands the fastest Average time to expand abroad Travel/Tourism Software/Apps Web/Comm/PR Agency Ecommerce Banking/Finance Online Publisher Arts/Entertainment Auto/Transportation Consumer Goods Fashion/Luxury/Textile Publishing/Media Health/Biotechnology Real Estate/Construction Companies that expand globally the fastest are in the travel/tourism (2 years), software/apps (2.3 years) and web agency/communication/pr (2.5 years) sectors. Companies in these industries are often pure online players selling services, not products. This eliminates international logistical and distribution challenges, thereby decreasing the time needed to enter new markets. The slowest industries to sell abroad are real estate/ construction (4.1 years), health/biotechnology (3.7 years), and publishing/media (3.6 years). These industries deal with physical products and need to face many administrative formalities in order to comply with international regulations, which increases their time to expand abroad years 10

11 Global players sell in 6 countries on average Highest international reach (more than 10 countries) Travel/Tourism While the study s findings show that businesses sell in an average of 6 countries, this varies greatly by industry. Software/Apps Consumer Goods 0% 10% 20% 30% 40% 50% 60% % of industry Most industries are active in only 2 to 5 countries; however, the industries that also have high online sales sell to more than 10 countries. Companies in travel, software, and consumer goods sectors had the highest international reach, with travel businesses coming out on top - 1 in 2 travel companies are active in more than 10 countries. 11

12 B2B AND B2C head to head in global sales Despite the fact that the B2B market is often seen as being more complex than B2C, the study found that B2B companies (29%) are actually selling slightly more abroad than B2C (22%), and hybrid (both B2B and B2C) companies (28%). Online sales can account for this as B2B companies, especially in the software industry, no longer need to establish a local sales team in each market. Instead, they can reach a wider range of markets through localized cloud-based B2B platforms and ecommerce sites. Average Sales Abroad per Business Type 25% 20% 15% 10% 5% 0% B2B B2C Both % of sales abroad 12

13 Bilingual, multicultural staff has positive impact on global sales # of nationalities > Number of nationalities internally 0% 10% 20% 30% 40% 50% % of sales abroad Bilingual director There is a positive correlation between how many languages are spoken internally in a company and the percentage of international sales from total revenue. Companies with more than 10 nationalities internally have 5 times more sales abroad than companies with only one nationality. A similar correlation is seen when company directors are bilingual - international sales are twice as high when the director speaks a second language. Yes No 0% 5% 10% 15% 20% 25% 30% % of sales abroad 13

14 Multilingual Sites have 5x more international sales # of other languages # of other languages > Not translated > Not translated Multilingual website vs sales abroad 0% 10% 20% 30% 40% 50% % of sales abroad Multilingual website vs # of countries sold Not surprisingly, the number of languages of a company s website has an enormous impact on international sales. As other studies have already shown, the majority of website visitors prefer to browse and shop in their native language. The findings show that businesses with a website in more than 5 languages have 5x more sales than ones with only one language. The number of countries reached is also 4x higher when a website is multilingual. While a multilingual website is important, some businesses are still able to maintain a small level of international sales with a monolingual website because some languages, such as Spanish and English, are spoken in many countries # of countries 14

15 Significant translation differences between Europe and North America While many companies have understood the important impact that translation has on sales, this varies significantly by country. In North America, the majority of businesses (59%) do not translate their website at all. However, only half that number (35%) did not translate their websites in the UK and Ireland. On the other end of the spectrum, French companies lead the way (11%) in having the most multilingual websites (more than 5 languages). Countries that do not translate Countries that translate the most (> 5 languages) 60% 10% 50% 8% % of respondents 40% 30% 20% 10% 6% 4% 2% % of respondents 0% North America Germany UK & Ireland Italy France Germany Italy North America UK & Ireland France 0% 15

16 Most businesses have bilingual directors % of respondents 100% 80% 60% 40% 20% Director bilingualism by country Not bilingual Bilingual The study shows that primarily anglophone countries have significantly different approaches to languages in their companies. In North America, just slightly more than half (55%) of company directors are bilingual, while in the UK and Ireland, three out of four (76%) directors are bilingual. Not surprisingly, most directors across Europe are bilingual as well. 0% France Germany Italy UK & Ireland North America 16

17 Majority of companies export to countries on the same continent Companies that sell abroad often prefer to sell to neighbouring countries or countries on the same continent, most likely due to logistical reasons and continental trade agreements. France was the only exception, with a majority of French companies (74%) selling around the world. Number of countries exported to Neighbouring countries Same continent Around the world 100% 80% 60% 40% 20% % of respondents France Germany Italy UK & Ireland North America 0% 17

18 success story Asos When Asos decided to enter the Russian market, it was taking a heavy risk; many retailers had already tried and failed. Language, cultural and logistical barriers such as delivery and online payment platforms, made this a very challenging country. Asos success was due not only to their multilingual website, but their understanding of local cultural preferences. They adapted their marketing to engage the local consumer and ensured a consistent customer experience by hiring a Russian-speaking client support team and adapting their shipping and payment policies. Today, Russia represents the 3rd largest source of web traffic for Asos, according to web analytics from SimilarWeb. 18

19 Older companies sell the most abroad Older, well-established companies over 50 years old have the highest amount of international sales followed closely by companies that are 1 year old. However, the majority of businesses that are less than 1 year old focus primarily on the domestic market. This average varies significantly by industry. While the top exporters in the travel and ecommerce industries are between 10 and 20 years old, companies that sell internationally the most are one year old in the software/apps industry. Age of company vs % of sales abroad < > 50 30% 25% 20% 15% 10% 5% 0% % of sales abroad company age (years) 19

20 Younger companies start selling abroad the fastest In today s fast-paced environment, business owners have incorporated international expansion very early into their business strategy. While more than half of companies that are less than one year old do not export at all, the ones that do sell abroad are the fastest of any age group (6 months). The findings indicate that the younger the company, the faster it expands internationally, showing that we are living in an age where global business is paramount for new business owners. Age of company vs % of time to expansion years to expand abroad < > 51 0 company age (years) 20

21 Profile Global Champion Based on the findings of this study, the typical profile of a company that has successfully expanded abroad and maintained a sold international presence looks like: Age: 2 to 5 years old Online sales: High (greater than 75% of total sales) Industry: Ecommerce Website: Translated into 5 or more languages Management: Bilingual director Staff: More than 10 nationalities internally

22 Key Steps Successful Global Expansion International expansion is a complex endeavor, no matter the size, industry or nationality of the company. It requires analysis and planning in order to create an effective strategy that will optimize resources and results. Successful global expansion involves several key steps: 01. Analyze your target market Will they be receptive to your existing offer? What are their local preferences that you need to take into account? What language(s) do they speak? 02. Analyze your resources Will you be able to scale your production, ship abroad, and comply with international regulations? 03. Translate your website & localize details This includes currency, shipping policies, hours of operation, phone numbers, etc. 04. Adapt your site to the region Use local expressions, vocabulary, cultural references. 22

23 Key Steps Successful Global Expansion 05. Implement a local SEO strategy Identify relevant keywords (careful! These are often not literal translations), create relevant content and launch a local link building campaign. 06. Create content for each target market Blog posts, white papers, infographics, and video. 07. Translate all your communications Newsletters, automatic s, and invoices. 08. Create social media accounts Localize social content for each region. 09. Provide multilingual customer support At the very least, your written communication should be translated. 10. Encourage linguistic skills internally More languages spoken within the company improve understanding of a global market. 23

24 The Study The TextMaster Global Champions Study aims to understand how businesses in different industries and countries manage their international activities. The study was conducted between September 15 and November 14, 2014 with 724 companies in 15 countries. The survey consisted of 15 multiple-choice questions and was distributed online on TextMaster.com, through partner associations in different countries, as well as the market research firm LightSpeed Research. The respondents included managers, directors, VPs and entrepreneurs from a variety of industries, most notably in the ecommerce, travel, fashion, and marketing sectors.

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