Growing Internationally
Since we established our European Operation, we have had the privilege of helping clients take their Shopify Plus stores global, particularly focusing on Europe. Expansion of your US-based e-commerce presence into the European market has immense potential though it comes with unique challenges and regulations that require careful planning and strategic adjustments.
Expanding into Europe
Europe is a lucrative e-commerce market. With over 500 million consumers across the continent, e-commerce sales are projected to keep growing significantly in the coming years from a base of 1€ Trillion in 2023. The growth of online business in Europe out-ranks the offline growth by multitudes and is still less saturated than the US market.
Expanding into Europe allows businesses to diversify their market presence, build brand awareness globally, reach more customers, and take advantage of regional growth trends. Our clients report that – despite the wholesale fear of losing business – their business with dealers and distributors has gone up with brands that made the step into the D2C world.
Key Considerations for Expansion
While Europe offers enormous opportunities, it’s also a complex market. It’s not a single, unified region but a patchwork of diverse cultures, languages, regulations, and consumer preferences. Based on our experiences, here are the most important considerations to keep in mind:
Localization is Key
Localizing first and foremost means adapting to local languages but also payment methods and other preferences.
European shoppers value trust and transparency even more than Americans. European customers often expect more detailed information about your business, value reputation, and are wary of ambiguous return policies.
European consumers prefer certain payment methods that might be uncommon in the US. In countries like Germany and the Netherlands, buy now pay later, direct debit or local providers like iDEAL are far more popular than credit cards.
In terms of language, some countries are more English-proficient than others. But translating your site into local languages isn’t just about customer experience – it also directly impacts how visible your site will be in search results across different European countries. We help our clients weigh efforts, costs, and efficiency in finding the right languages to hit your financial objectives and targets.
Further localized considerations should be content, including region-specific promotions, currencies, and shipping options, which can significantly enhance your customer experience and boost conversions.
Lake Cycling migrated to Shopify Plus in the USA, then we built expansion stores in the EU, South Africa, South East Asia, and the UK using our Web Development team.
Complying with European Regulations
Europe’s regulatory framework can be challenging, but it’s essential to get it right from the start. Here are the three most important regulations to consider:
- GDPR: Europe has stricter data privacy laws and consumer protection regulations than the US. The General Data Protection Regulation (GDPR) is perhaps the most important regulation you’ll need to understand. It requires businesses to be transparent about how they handle personal data. Failure to comply can lead to substantial fines, and European customers are increasingly aware of their privacy rights. Non-compliance can lead to hefty fines. These regulations also influence marketing opportunities which we’ll help our clients adjust.
- VAT Rules: VAT requirements vary by country. VAT rates vary across European countries, and businesses selling to European consumers need to be aware of where they’re liable to charge VAT. If you exceed certain sales thresholds in a country, you might need to register for VAT there or use the newly established One-Stop-Shop Solution. We are happy to sensify you on what is important but working closely with tax advisors to ensure compliance is highly recommended.
- Consumer Rights: European customers have strong rights when it comes to returns and refunds. Offering clear, customer-friendly policies that comply with local laws is crucial for building trust. We are happy to guide you through this jungle.
Shipping and Fulfillment Challenges
European customers expect fast, reliable shipping. However, shipping across Europe is more complex than shipping within the US due to border controls, varied tax rules, and customs duties. One solution that has worked for many of our clients is setting up fulfillment centers within Europe. Whether that is through a third-party logistics provider or one of their distributors. Shipping from within Europe is crucial to meet customer expectations and make return handling easier. Additionally, Shopify Plus makes it easier to manage multiple fulfillment locations, which is a huge advantage for businesses scaling across borders.
Our Role in Your Global Expansion
At CrankTank, we’ve spent the past year building our European office, and we’ve already helped several clients successfully establish their global Shopify presence.
With our established experience in the US and in Europe, we are confident to be able to help you with every step of expanding into new regions, navigating the complexities of the specific markets, from regulatory compliance to logistics, payment methods, and customer service localization, ensuring your transition is smooth and profitable.
Susanne Pfrengle
Managing Director, CrankTank Europe
susanne@cranktank.net