Global Strategy: Localize as You Globalize
webtechniques

September, 2000
By Cheryl Currid

Within 30 minutes after United Airlines added e-commerce capabilities to its United Kingdom Web site, a British family of five purchased tickets to Hawaii. Office Depot, after its merger with Viking Office Products, expanded its business and now uses its cybershopping experience in 19 countries. And upstart chipshot.com doesn't just market to U.S. golfers. The company saw early on that 12 percent of orders were coming from outside the U.S., many from Japan. Recognizing an opportunity, the company built a site specifically for the Japanese market.

You can learn from these successful global ventures: Send your Web developers to charm school and teach them about international diplomacy; localize as you globalize; and develop a marketing mind-set for the intricacies of a world market—people who don't speak your language, understand your humor, or have any clue as to why they should buy from you.

If you're looking to take your company global, these lessons are important. They serve as reminders that, in order to compete, you'll need to know about culture, currency, and customer support. You'll also learn that 24/7 isn't an operating dream—it's a necessity to keep your business going.

Localize as You Globalize
The biggest message that I hear from successful global Web sponsors is that it's crucial to provide localized content. You'll be competing with brands and products that the local people know. If you represent a U.S. company, be aware that certain people around the world will be looking for any small evidence that you're an "ignorant American."

A globally sensitive clientele will pick apart everything from the colors on your Web page to the way you display your telephone number. If you make a few wrong moves, you risk losing potential customers, but if you pander to an exceptionally wide audience, you could homogenize your content so much that nobody will understand your mission.

Get a grip on geography—customers from Paris, Texas won't have the same tastes as those from Paris, France. A little research into world geography will help you build a good global Web site. For example, what's the difference between Holland and the Netherlands? (Holland is part of the Netherlands, as California is a part of the United States.)

The e-world offers a whole new set of competitive rules. If this sounds like a challenge, it is. You may have regional recognition of your brand name, but don't be lulled into complacency. Unless your company has Coca-Cola's global recognition, you might have to build your reputation one region at a time.

You could try to alter your single-language Web site to accommodate individual countries. But few organizations have met with success this way. Aside from advertising and marketing a product, you may need to make some changes to the product line before it's ready for sale in another country.

Culture Shock
The success of many globalized sites depends on how well they relate to the laws and social customs of different countries and cities. Remember that humor, idioms, and marketing concepts don't necessarily send the same message cross-culturally.

For example, a friend of mine was helping introduce a product into the Southeast Asian market. It was the year of the dog according to the Chinese calendar and the advertising agency suggested that they capitalize on the positive attributes of the dog—loyalty, friendliness, honesty, and dedication to purpose—and apply those to the company. The idea sounded great until they checked with an agency in Hong Kong that told them that the dog evoked too many negative connotations in the Chinese mind and it would be a disaster to use it in advertising.

Certain sayings just don't translate. Even people who speak English as a second language will often translate comments literally. Consider comments like: "You can't get to first base," or "Don't end up with egg on your face," or "getting into gear" and how they might be misconstrued in a different language.

Humor is a similar problem. More often than not, it won't translate. You can confuse customers and turn them away from your site if they don't understand your comments.

Be especially careful when you're naming products. According to legend, General Motors tried unsuccessfully to sell its value-price Chevy Nova in Mexico. The problem was all in the name. In Spanish, "no va" means "doesn't go." Chevy was essentially marketing the Nova as a car that couldn't or wouldn't run. Whether the story is true or not, it makes sense to look up product names and connotations prior to marketing products abroad.

Knowing local laws is helpful too. You can't sell certain products in some regions. For example, you can advertise products like Viagra in the United Kingdom but it's illegal to sell them. In China, you can deliver certain IP services but not sell voice-over IP.

Beware of import restrictions. In most countries, customs won't let anyone import the following items without a special permit: animals; birds and their by-products; plants; endangered species or items made from these species; arms and explosives; bulletproof clothing; toy guns of any type; weapons, including decorative swords and knives; cigarette lighters in the shape of pistols; toy coins; pornographic video tapes and cassettes, books, or magazines; controlled substances; poisons; materials that may be considered treasonable (plutonium, military maps, and so on).

Making your products global-ready is a process, not a project. As countries change, laws change, and culture morphs to new standards, your Web site should change too.

Currency
From yen to rubles, prepare to deal with currencies beyond the dollar. While much of the trouble disappears with a MasterCard, Visa, or American Express affiliation, companies can't expect to use these for all transactions. For example, only 5 percent of Germans use credit cards. In fact, many world cultures don't rely on credit cards because of fraud.

In much of Europe, payment follows an invoice, which goes out with the product. However, a report by Forrester Research found that only 14 percent of U.S. merchants were set up to bill via invoice. Conversely, 88 percent of European merchants used the billing procedure.

In some countries, debit cards are gaining acceptance. But until keyboards come with card swipes—or some other authentication method takes its place—debit cards aren't an option.

Then, there are taxes. Just like the state tax differences in the U.S., each country has different taxation methods. For the moment, it's difficult to collect any intra-state tax in the U.S., and product shipments aren't monitored. But when you ship products to foreign countries, they can be stopped at the border. So for e-commerce to be successful, you must account for the cost of shipping and customs taxes.

You can count on constant change in regional and national law from border to border. For example, last spring the government in France started to grapple with its long-promised 35-hour workweek proposal. It seemed like a great idea until workers realized that wage-cuts could come as employers tried to figure out how to get 39 hours worth of work out of a shorter time span.

There's a host of new services that claim to help with pricing and collecting foreign currency. For example, U.K.-based WorldPay creates multicurrency pricing that allows customers to view prices and pay for products in over 150 currencies.

WorldPay also offers e-commerce store-building software called Click and Build. According to WorldPay, the Web-site construction tool lets any company build an e-commerce site without programming. The system helps you set up a shop that lets people search a catalog, choose goods that are added to a running total of their local currencies, confirm orders, and pay for goods. After customers have made their purchases, the program adjusts inventory.

Paymentech.com prides itself on being a leader in non-face-to-face transactions. The firm processes 3 billion transactions annually, which include all forms of credit card business. It offers services to commerce-enable Web sites, helps you design what you need, host it, manage orders, or create storefront content.

If you choose to brave it alone, make sure you understand how currencies fluctuate. Recently, the value of the Portuguese Escudo changed in value by 13 percent, while the Australian and New Zealand dollars moved 11 percent. If you're in a low-margin business, being on the wrong side of a currency fluctuation could mean the difference between profit and loss.

Open 24 Hours
The good news about going global is that your company can pick up a world full of new customers, but you also pick up all kinds of new competitors. If you expect to compete, you need to provide good customer service.

Your Web site and servers need to be ready for the customer, no matter what time it is at home. Response time is important, too. People don't want to wait for the next screen.

For now, that could rule out localization of servers to your own data center. Many sites have had to take their servers offshore or rent space with remote ISPs. Organizations like ukhosts.net offer attractive virtual server packages. This company claims to have a 99.9 percent uptime ratio, backed by 24-hour fault resolution. Their networks are monitored every day and hour of the year. The company offers multiple email accounts, domain name registration, and a heavy investment in bandwidth. It supports automated trouble tickets, which let the clients prioritize their problems. Prices start at $150 per year for a small site.

Every situation is different, but it may be worthwhile to look at remotely located sites. Large companies frequently rely on a local staff to build customer relations in new countries.

Partnering is another common term these days, as companies try to leverage resources with others. Partnering could help you improve customer service for a global audience. Consultants suggest that you find a good local organization and work out a way for both companies to win. That recommendation might be not be easy to follow if you're starting out in an unknown part of the world.

Learning Curve
Building and maintaining an effective e-commerce presence is a learning process. Examine those who do it successfully and monitor your own progress at the same time.

Keeping track of e-commerce opportunities, customer visits, and frequently used parts of the site are the first important steps. Check out shopping habits. Compare the results of your site with local and regional demographics. Are you attracting your share of eyeballs? How about your share of wallets?

Going global, and doing so successfully, takes a lot more than tweaking some HTML code. Get ready to change the way you do business, the location of your servers, and the products and services that you sell.