According to Statista, global e-commerce sales have increased almost 5-fold over the last decade. With the transformation of commerce business models and the expansion of e-commerce, the market has become saturated with both small and large players, each aiming to grow their business and attract new consumers. But in a competitive, ever-changing marketplace, this becomes more and more difficult – e-businesses need to find solutions that simultaneously optimise their operations, deliver a good customer experience and help with their expansion.
No shortage of challenges
While e-commerce has opened the floodgates to the world for local businesses, e-commerce companies with ambitions to expand their sales channel network into new markets still face many challenges and barriers.
“First and foremost, businesses have to devote their time, attention and financial resources to try and understand the specificities of individual markets, the legal, tax and competitive environment. In parallel, they need to find partners for growing sales channels, warehousing, shipment formation and transportation, and other e-commerce solutions. Implementing all of these processes separately can not only take longer and significantly complicate development plans, but incorrect decisions can also be costly,” notes Sabina Bačiulienė, Head of Global Development at international parcel company Venipak.
Another common obstacle to expansion beyond the local market is the specificity of the tax environment in individual markets, including particularly sensitive VAT and customs clearance issues, which are further complicated by the lack of language skills.
Finally, according to S. Bačiulienė, e-commerce customers today are more demanding than ever – they expect more than a customised assortment, and a smooth and fast shopping and delivery experience.
“Consumers have become accustomed to same-day delivery, customised offers, the ability to conveniently choose their preferred payment method and other personalised solutions. In addition, they expect businesses to offer more than a service that meets their expectations, but also a socially responsible approach based on real action,” she says.
According to S. Bačiulienė, these challenges are faced by both large and smaller e-commerce players worldwide. Unfortunately, small businesses are often “eaten up” by fierce competition and weak financial backing.
Untapped potential
According to S. Bačiulienė, one of the increasingly popular ways to help e-commerce businesses strengthen their position and gain a foothold in different European markets is by partnering with an e-wholesaler that acts as an intermediary.
“According to Venipak’s Head of Global Development, the e-wholesaler niche is still emerging and has a lot of potential, as most e-shops nowadays tend to work directly with suppliers or manufacturers, and the latter, in order to increase their sales, are investing their own time and resources in trying to expand to additional sales channels. Meanwhile an e-wholesaler can provide the best local offer with fast delivery in any major market in just 24 hours.
“While we used to be just an international parcel company, today our business model has changed significantly – we operate as an e-wholesaler exclusively for e-commerce, which allows us to occupy a larger part of the trade chain than just logistics and offer a wider range of solutions from a single source. For example, the customer no longer has to deal directly with multiple sales channels and marketplaces in different markets, as we have integrations with them and act as suppliers and sellers to these channels ourselves. We are also currently working on the VAT issue so that we can help e-merchants to enter new markets more quickly, to understand their tax specifics more easily, and even to develop a range of products,” – says S. Bačiulienė.
All from one source
In other words, according to S. Bačiulienė, an e-commerce player today only needs to have the product, while everything else – from storage, sales to delivering the product into the hands of the recipient – can be taken care of by an intermediary. This is a particularly good solution for businesses that want to grow and are relieved of the burden of indebtedness to banks, building infrastructure or hiring staff.
Working with an e-wholesaler in this way can help generate more turnover without additional investment, as the e-wholesaler integrates various sales channels, does the warehousing, last mile delivery and full fulfilment services.
“We are rapidly expanding the number of full fulfilment centres in different countries. Currently, there are centres in Poland, Lithuania and the Netherlands, with three more countries to be added in the near future,” says Bačiulienė.
According to her, successful expansion in Europe today does not need to follow the old path of large investments and infrastructure – through an intermediary, it is possible to trade and expand in any European market just as successfully, but at an even faster pace and with less financial risk.