INTERNATIONAL ISSUES IN ECOMMERCE, PART I

1
INTERNATIONAL ISSUES IN E-COMMERCE, PART I

• Strategies
• Regional markets
• Risks
• Language issues
• Other cultural issues
• Legal/regulatory issues

Reference Carolyn Siegel (2006), Internet
Marketing Foundations and Applications,
Houghton-Mifflin.
2
Strategies

• Exclusionary
• Solely domestic
• Inclusionary
• Passively international
• Glocals (adaptive approach)
• Globals (standardized approach)

Middle ground
Completely standardized (Globals)
Completely adapted
3
Evaluating Markets

• Economic viability
• Income distribution and averages
• Segment potential
• Internet readiness
• Least Internet Ready Areas of the World (LIRAs)
  (35 of World population)
• Internet Ready Areas of the World (IRAs) (50)
• Internet Leaders (15)

4
Internet Readiness Indices

• Economist
• Approximately 100 measures in 6 categories
• Technology infrastructure
• General business environment
• Consumer and business adoption of e-business
• Social/cultural conditions affecting Internet use
• Availability of e-business support services

• Information and Telecommunications (ITC)
• International Telecommunications Union
• 26 indicators-e.g.,
• Technology infrasturctures
• Market conditions

5
Internet Readiness Criteria

• Infrastructure availability
• Performance
• Types of access available
• Cost of access
• Metered
• Unmetered
• Dial-up issues
• Proportion of population with access

6
LIRAS

• Southern Mexico
• Andean countries
• Most of Brazil
• Sub-Saharan Africa
• Remotest former Soviet Republics
• Laos, Cambodia
• Chinese interior

Reference Carolyn Siegel (2006), Internet
Marketing Foundations and Applications,
Houghton-Mifflin.
7
IRAs

• Coastal India
• Parts of Brazil
• Northern Mexico, Mexico City
• Hungary
• Estonia
• Malaysia
• Former Soviet Republics closer to Europe
• Parts of China (e.g., Shanghai, Hong Kong)

Reference Carolyn Siegel (2006), Internet
Marketing Foundations and Applications,
Houghton-Mifflin.
8
Internet Leaders

• U.S., Canada
• Western Europe
• Japan
• Australia
• New Zealand
• Taiwan
• South Korea
• Israel

9
Internet Penetration by Country, 2004
U.S.
Australia
Sweden
Brazil
Netherlands
Note accounting issues!
Japan
Source Nielsen.
10
Online Language Communities

• Sizable group of people communicating in the same
  language
• Not proportional to percentage of off-line
  speakers
• Demographics of Internet users within a country
• Willingness to use English or other language sites

11
Risks in International Expansion

• Over-expansion
• Brand dilution
• Over-estimation of revenue
• Under-estimation of costs
• Underestimation of competition
• Regulations

12
Area Issues

• Europe
• High penetration rates access outside home
• Strong economies
• Low credit card use
• Competing technologies
• Interactive TV

• U.S./Canada
• Canadian specialty shopping
• High penetration rates
• Weakening U.S. dollar strengthening Canadian
  dollar
• Mexico
• Growth potential
• Low credit card penetration

13
More Regions

• Asia/Oceania
• China/Japan
• Use of wireless technology for other purposes
• Low rates of credit card use
• China
• Modest economic power
• Japan
• Internet ordering through local merchants

• South Korea
• High Internet penetration rate (45)
• Faster high speed access than in the U.S.
• Australia/New Zealand
• English language use
• Relatively similar culture to U.S.
• High shipping costs

14
Language Issues

• Prior to 2000, 96 of web sites were estimated to
  be in English, the first language of 6 of the
  World population
• 40.2 of online users are estimated to speak
  English to some extent
• 2000 Non-English speakers became majority of
  Internet users

• 75 of Europeans are multi-lingual 90 of these
  include English
• Dangers of U.S. English
• British English is international standard
• American often perceived as misspelled
• Use of slang
• Lesser distance to British English than to other
  European languages

15
Language Display

• Single-byte (Latin-based) vs. double-byte
  languages (Cyrillic, Arabic, Chinese, Japanese,
  Korean)
• Characters may not be displayed correctly (????
  in Internet Explorer)
• Conversion software
• Brower adaptation may not be backwards
  compatible with other software

16
Translation

• Whole vs. part
• FAQ, feedback forms, product specifications,
  warnings, shopping cart info, legal
• Quality of translation
• Superficial
• De-centering (back translation)
• English language instruction as a product

17
Cultural Issues

• Color
• Black as background
• Stylish in U.S.
• Unlucky in Asia, Europe, Latin America
• Red as a lucky color in China but can be
  over-used
• White and green are unlucky in Cina

• Symbolism
• Dogs as pets
• Numbers
• Unlucky numbers
• 4, 9, 13 (Japan)
• 4, 14 (China)
• Lucky numbers
• 1, 8 (China)
• Formality of communication

18
More Cultural Issues

• Measurement issues
• Metric vs. U.S., British systems
• Clothing sizes
• Representation of numbers
• 1,000.00 vs. 1.000,00
• Dates

• Offensive content
• Specific body parts
• Revealing content
• Gestures

19
Government Issues

• Regulation
• Extraterritorial laws and regulations
• Privacy
• Safe Harbor procedures
• Encryption restrictions

• Extent of regulation
• Protection of small businesses
• Limitations on online advertising (China)
• Taxation
• Censorship
• Fraud