How Australian Brands can Expand Internationally via Marketplaces Today

For many Australian brands, expanding to new global markets can be a daunting and financially overwhelming prospect. Traditionally, a business might have had a product that resonates internationally, but a lack of physical resources on the ground or substantial investment to drive interest in new markets has stalled cross-border expansion.

Today, eCommerce marketplaces like Amazon, eBay and Tmall Global allow brands to quickly scale their business to sell internationally, expanding businesses' reach, customer base and revenue streams. Selling in more places and putting your product on more marketplaces can introduce new customers to your brand, as well as act as a defence strategy against unauthorised sellers, and ultimately drive sales.

What is the opportunity to sell internationally?

Online international marketplace sales are growing rapidly and present significant growth opportunities for Australian brands. In fact, recent reports suggested that sales from marketplaces like Amazon, eBay and Tmall now account for approximately 62 per cent of all global online retail sales. And in North America alone, people were already spending more money on Amazon (with sales over $610 billion in 2021) than they were with longstanding retail goliath Walmart.

Recent research from Pattern also highlights opportunities for Australian brands to sell into China, where 67% of China's cross-border online shoppers expect to spend more online in the next year on goods from western sources, including Australia. For Chinese shoppers, a primary motivation to buy Australian goods or from Western brands is product quality (60%), closely followed by a sense of uniqueness and a match of their style or values (both 59%), and then value for money (57%).

These results show that cross-border shoppers have more considerations in mind than merely product price when deciding to buy, meaning brands need to think carefully about the range of products they make available for sale to that market to fully capitalise on the opportunities presented by international marketplaces.

What to know before initiating cross-border selling

In order to sustain profitable brand growth internationally, research must be conducted to understand if the investment into international markets is worth the cost and to ascertain the best strategies for their brand and markets.

Before expanding, brands need to understand which international markets to expand into. While it's good general advice to focus on large markets, this only applies if your brand's product resonates with these markets. You should conduct a thorough analysis to determine whether there's sufficient demand and opportunity for your brand and product category in a given market on the global marketplace. Conducting a competitor analysis can also help you identify gaps in the market and see how brands similar to yours are being represented on the marketplace.

Additional factors that must be understood before embarking on cross-border selling include pricing, translation, and regulatory and labelling needs. Determining international product prices isn't as simple as converting your domestic price to a foreign currency. Instead, you should research the competitive landscape in the target market, be aware of local taxes, and factor in the additional costs you have to cover (like shipping and regulatory costs) to sell your product internationally.

Understanding your customer is always important, but it becomes especially important while navigating the global marketplace. Ask yourself who your customer is, why they shop on marketplaces, what they're searching for, and if there are similar products in the market already. Are their purchases driven by convenience factors? How can you tailor your messaging to match what they're searching for? And how can competitors already in the market impact the demand for your products?

Strategies for successful international expansion via marketplaces

To avoid the risks of heavily investing in a market where your product may not succeed, we recommend a three-phase internationalisation process. Phase 1 consists of testing your demand to ensure that enough customers exist in your target market to expand there. You can start by opening international shipping from your website or Amazon. In phase 2, you can continue cross-border selling while growing your demand with local marketing. When demand has grown enough to warrant the investment, brands can move to full localisation, or phase 3, by creating a local entity and local marketplace listings.

Brand consistency is also important, but when it comes to cross-border selling, so is adaptation. Your words may not translate well into the local language, making it necessary to alter titles or marketing content better catered to your international audience. The goal is to maintain your branding and the look and feel of your brand while adapting to local customers on the global marketplace.