How To Analyze Emerging eCommerce Markets

Why is it important to identify new markets that have ideal conditions for market entry? Because if you are waiting to read the news that a new region is booming with sales it is usually too late, and your competitors are already there. Here are some of the key areas that I look for when examining a new market to be viable for eCommerce expansion.

• Disposable Income

Why has Japan remained a robust market despite the fact that they have been in a depression since the early 1990’s? Partially because of the cultural acceptance for children living at home which keeps disposable incomes high, and healthcare costs for the aging elderly low. It is these critical insights into real disposable income that can be a decisive indicator of market entry.

• Infrastructure

Logistics: An obvious necessity is being able to ship your products quickly and reliably. Insights into local logistics customs are crucial. For example, because of Indian’s adversity to debit and credit card transactions eCommerce merchants have turned to mobile websites and COD (Cash On Delivery) to expand into vast new territories that were previously inaccessible.

Technology: You need to be able to market your product to new consumers. How and where this will occur, from FM radio to mobile push notifications, will largely be based on how developed the local communication infrastructure is.

• Cultural Behaviors

While subtle, cultural factors can have an enormous impact on your ability to successfully expand into a new market. Traditional values (such as Confucian in E. Asia) that promote modesty, as well as religious beliefs, can determine the motivation of potential customers in a given region. It can be a fatal mistake to apply the same principals that might motivate a western consumer in a vastly different market.

• Education

Without a minimum standard of education, marketing is going to be extremely difficult. This is one of the primary reasons for the failure of market expansion into western Asia / middle eastern region. If people are not even aware of products, let alone what their evident use is, then you are left without a basic platform to gain exposure for your company. Secondly, as societies develop they become much richer and more complex thus leading to psycho-social desires that did not exist previously. Cosmetics, accessories, apparel, consumer electronics, and transportation are all industries that benefit highly from these newly established desires.

• Currency

Why is currency important? Because erratic currencies can be a death sentence for eCommerce efforts unless the currency has been so abandoned that the market you are entering relies primarily on U.S. dollars – and government monetary policy is not predicted to change.

• Lifestyle Factors

It is obvious that there is a tremendous difference attempting to open up a store in downtown Las Vegas, Nevada and downtown Little Rock, Arkansas. Similarly, there are important distinctions to be made when entering markets abroad. If you were to visit the North, South, Coastal, and Interior regions of China you could easily feel as though you have been to four distinct countries; especially after interacting with locals residing there.

• Geo-Political

The threat politically unstable regions present is obvious, you cannot sell goods in the midst of political strife. Even as beneficial as these products usually are to the local populace.