What is the best strategy for launching an e-commerce brand in Europe?

Last updated on 07/13/2022

Going Global? Want to expand your e-commerce brand in Europe?
Wondering how to reach European consumers with your e-commerce brand?

This article is for you if you already have:

• A brand and want to test the European market
• A physical shop in Europe and want to go digital
• Sell your products in the USA and want to launch in Europe

This article is not for you if you have not yet created an e-commerce brand.

Let’s start with a number that will make you want to learn more. 

According to a Statista  study, the value of retail e-commerce in Europe in 2020 was 393.8 brillion U.S. dollars.

That’s less than the U.S. (791 billion U.S. dollars) and China (1.414 brillion U.S. dollars) but Europe is still the 3rd largest e-commerce market with opportunities that should not be overlooked. 

In this article we will not talk about regulation or international logistics rules, but about marketing an expansion project in Europe via digital channels.

Some European countries are known for their strong customs regulations. New regulations for e-commerce are regularly issued in Europe, so we advise you to be accompanied by an expert in international trade to be aware of the latest laws to be in order. 

Table of contents:

Test the European market

Choose the country or countries that are relevant to your market

Market and competitor research

Strategic positioning

Implementing a digital strategy in Europe

The marketing plan

The acquisition channels to focus on

USA and Europe’s similarities and differences

Digital Advertising Cost

The culture of a good deal

Currency and online payments

The language

Test the European market

First of all, you will have to do a market analysis and find out in which country developing your e-commerce brand can be profitable, knowing that European countries have similarities in buying behavior, but not the same purchasing power.

If your products are around $80 to +$100 it may be more interesting to target the top 10 European countries or even top 5, depending on your core target audience.

 Choose the country or countries that are relevant to your market

Instead of flying blind, check on Google Trends search on your products to make sure the countries are worth the investment. 

You can also go to the leaders in your market and use Similar Web chrome extension to have an idea of where the traffic is coming from (make sure the site doesn’t have a .uk, .au, .fr, .de localized website).

Finally, Amazon is also present in Europe; you can check the products in the same category as yours and see which competitors are present, in which country, and check their customer reviews to see what Europeans think of their products.

 Market and competitor research

The market research will allow you to answer crucial questions that will help you to build your e-commerce strategy.
You must answer these questions:

From which country do consumers come to buy products similar to yours?
Who are your competitors in these countries (national and international)?
Do your products need to be modified to be compliant?
Will your price be appropriate for the market?
What will your duties, taxes and other costs be?

Strategic positioning

Now it’s time to position yourself in the countries you are interested in and to have an idea of the size of the market and its specificities. 

Of course, these are only forecasts and things can change, but this is a basis so that you don’t get lost in the next steps.

Creating a Perceptual Mapping can help you understand the competitive landscape in the specific market and the position of your brand.

Implementing a digital strategy in Europe

The big question here is to ask yourself is if you are able (financially) to ship your products to  European customers and cover the marketing on an international scale? 

You can of course hire a specialized e-commerce and digital marketing agency in European countries or consulting firms, and find a 3PL warehouse that will take care of the logistics.

However, without resources or knowledge, you can test your products on Amazon in Europe, if your margins are sufficient. That way, you don’t have to worry about the logistics of international order fulfillment and marketing. Amazon takes care of fulfillment, shipping and finding you customers. Moreover, it provides 24/7 customer support in the local language. But as you know, this comes at a cost. 

You also have European marketplaces that can target other people who don’t use Amazon.  La Redoute, Fnac Darty and Cdiscount  for France, Kaufland or Otto for Germany.

 The Go-To Market plan

If you want to own your international customers’ data and keep control of your brand, then you will have to market and drive traffic to your own website.

To do this, your website needs to be localized in the country where you are expanding.

To illustrate, here is an example of ASOS that has grown from an online store to a global e-commerce giant.

Their development was based on these pillars:

• localized websites in strategic countries with the local language
• adapted product offers
• adapted payment methods and currencies
• adapted delivery options
• easy return guarantee

It is important to adapt to local markets, offering the buyer a localized buying experience.

The acquisition channels to focus on

Marketplaces

As mentioned, marketplaces can allow you to test the market in the country you are targeting with a lower investment, but with probably less margins and limited scaling.

But how will you develop an audience for your e-commerce brand internationally? And how do you drive traffic to your website?

If you haven’t already done it, take a look at your analytics on your social media business pages – maybe you’ll get some surprises. 

You may already have followers and even fans on social media that are from the countries you want to launch. Maybe some of them are influencers and will be happy to collaborate with you to present your product to their followers.

Influence Marketing

Partnerships with local influencers and celebrity endorsements are a very quick way to target an audience potentially interested in your products and quickly make yourself known in a country. You will have to spend time in search of the right influencers who can convey the message you want to address, in the right way to a community where they know the codes. Go through a specialized influencer marketing agency or use a brand content platform to automate the process if you don’t want to do it by yourself.

Here are 2 platforms that create brand content with influencers for you:

https://www.tribegroup.co/

https://www.aspireiq.com/

SEO

If you have a website translated into the local language and localized, SEO is also an acquisition channel to work on to make a difference. You can find a specialized freelancer on Fiverr to translate your blog into the local language with SEO keywords to integrate.

Paid traffic on Facebook and Google Ads (the magic of pixels)

The massive advantage you have will be for the acquisition strategy optimization on the online advertising platforms. Indeed, very little change in terms of strategy is required on the paid acquisition channels Facebook and Google Ads.

You just have to create a new campaign with the desired localization and then create ads in the local language or use automatic translation on Facebook Ads and you’re good to go.

You can create custom audiences for your e-commerce and use the data from the Facebook and Google pixels website, and this is very good news that will allow you to quickly see if you can be successful with your products.

USA and Europe similarities and differences

Although Google and Facebook can find many similarities in internet buyers behavior, and thus find your international customers more easily, there are some differences to take into account.

 Digital Advertising Cost

You will usually get a nice surprise when launching your digital ad campaigns in a European country or in the UK. 

Your CPMs and CPCs will generally be lower than in the US. Depending on the industry, there is less competition and more availability in digital advertising inventory. 

For example, on an ad account for a high-tech brand that targets early adopters, and interests around technology:

For a CPM around $25 in the US, on the same audience you will have on average $12 CPM in Germany, France and Nordic countries, which are the most expensive European countries. It will be around $8 for Italy and Spain.

For CPCs around $0.7 in the USA, and $0.4 for France and Germany on the same audience targeting.

Interesting, right? Unfortunately the Cost per Purchase and the ROAS are not 100% correlated to these metrics. You will need a good strategy to convert your visitors into customers once they have seen your ad and clicked on a CTA!

Good deal?

Europeans and Americans alike love a good deal. However, they are suspicious about 60% to 80% off on the price. This can make Europeans think that if you sell your products that much they are either of poor quality and you can’t sell them without massive sales promo.

If you plan to do promotions, give priority to promo codes to be distributed to influencers and media. Europeans love them. 

Discounts up to 50% off such as a Christmas offer or flash sale can work. But too much of a  discount will make them doubt your products, which you want to avoid at all costs.

Again, it depends on the industry and the people you want to target.

The buy 2 get 1 for free offer can work well, or even buy 3 get 2 for free, which can end up being around 60-70% off. It’s up to you to turn your promotion in an interesting way without denigrating your brand image for european.

The Currency and online payments

Online payment in Europe is quite similar to the US. In Germany and France people use Paypal a lot, Apple Pay, Google Pay and Stripe.

As for the currency, you are lucky, Europe has only one currency, the Euro (€). You will need to create an account in Euro or that accepts Euro to avoid exchange fees on every transaction.

If you also want to target the UK which is no longer in Europe since January 2021, you also need to have an online store that offers payment in £.

The local language

Language is obviously the element that can cost some resources.
Unfortunately not all Europeans are bilingual in English.

You can create an e-commerce website localized in the country you want to target in the English language. Many e-commerce brands do this as a test, as long as the currency is the Euro.

But you risk having mobile users who don’t have the automatic translator and won’t be interested because they won’t understand how to buy on your e-commerce website.

In addition to the local language website, you will need to provide customer service in the local language. You can easily find a freelancer on Upwork or Fiverr. Additionally, many countries have French as a native language.

For example Madagascar or Morocco, the minimum salary is lower, so you can find people at lower cost.

Many students also speak two languages in the country where you live, so you can post a part-time job position locally and find someone who can do the customer service.

Expansion and development is the logical process for scaling your e-commerce brand.
You may encounter difficulties along the way, but it is worth it.
Once your brand is global, you can compete with the world leaders and make an impact in the world.

Sources:

https://www.statista.com/topics/3792/e-commerce-in-europe/

https://unctad.org/

https://www.coredna.com/blogs/how-to-scale-ecommerce-business

https://merchants.glopal.com/en-us/blog/what-turned-asos-online-store-into-a-global-ecommerce-giant

https://www.coredna.com/blogs/international-ecommerce