8.1 Identify eCommerce Market OpportunitieseCommerce Market Opportunities
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In order to sell a product or service, you must first establish that there is someone willing to buy it. To identify market opportunities, it is important to evaluate key factors such as the political, economic and competitive environments; market access; product potential; local distribution and production; and the social/cultural and demographic/physical environments. You can conduct your own market research or use available market research reports that examine existing firms that are available in local markets. Now more than ever, it is possible to evaluate trends through online data and simply search for products in overseas marketplaces. To do this, use online searches on popular foreign ecommerce sites to identify competitors and substitutes. In addition, you can create surveys and interviews to better understand first-hand, what potential customers in foreign markets are looking for and their current sources for procuring the product.
What can I do to determine the product availability in the local market in my target country?
Take the time to conduct some basic research about the existing availability of products in your category by searching ecommerce retailers in the country, consulting experts, and asking potential customers about the country- specific access issues they have with finding the product. Inquire which channels they go through for purchases and in what ways they have learned about the product. This may be a clear indicator of whether or not to proceed, depending upon your product. Is it selling through the local Amazon outlet (i.e.: Amazon Japan), are there a lot of websites selling the product or service directly when keywords in the local language are used? If your product is superior in quality or features and carries the “Made in the U.S.A” label on it, there is still strong potential for market success given the high desire overseas for quality U.S. made goods.
How do I evaluate the local market?
First identify what the competitive landscape looks like in your target market. Is the market share across your product category fragmented? If there is fragmentation, with lots of smaller competitors jockeying for sales, evaluate whether your product or service will stand out enough for you to successfully compete. Determine your value proposition on how you will differentiate yourself in a crowded market. Contrarily, is there one dominant competitor? If so, then evaluate this competitor. Find out if the competitor has a monopoly on the market or whether they are only serving part of the population of a whole customer segment. Further examine why there is little competition. Does the market or provincial lawmakers have “protectionist” tendencies in favor of the local competition? This could be a red flag that entering this market comes with potential barriers.
Are there policy or regulatory trends that you can take advantage of in a particular market?
Explore recent industry and target market news for any new legislation that opens up a particular market or trade bloc that your product or business structure can capitalize on.
Is cross-border ecommerce affected by the local laws and regulations?
Tax laws, customs laws, corporate organization, import restrictions, and overseas domestic laws need to be understood prior to entering a new market. Does the target market government restrict access to certain raw materials or skilled labor? A few overseas governments are also reluctant towards opening up to certain foreign investment or business expansion. A local liaison/representative is also helpful in navigating legal interpretations and understanding local business law protocol. When in doubt, always seek guidance from the regulatory bodies in any overseas market regarding interpretation of laws and regulations, especially when the responsibility of understanding the local laws lays with your business or one of your ecommerce service providers.
Are there local challenges in infrastructure (cold-chain, logistics, technology) that would make your product more desirable?
Thoroughly understand your target markets and any distribution issues faced there. If your business has the resources to overcome the infrastructure challenges faced, you may be able to overcome any competition in that market as well.
What online tools are readily available to perform a basic market analysis?
USG provided resources:
We always recommend contacting a local International Trade Specialist or Global eCommerce Specialist within the U.S. Commercial Service’s worldwide network to receive free counseling. Through our International Expansion Blueprint service, our trade professionals can help map out a global ecommerce strategy and to determine which markets might be best for your product or service. Also, you can do some preliminary homework by taking advantage of the Country Commercial Guides (CCGs). Produced by U.S. embassies and consulates abroad, the CCGs provide the latest “boots-on-the-ground” market intelligence on more than 140 countries.
Industry Provided Resources:
eBay eCommerce Reports
- U.S. Small Online Business Growth Report http://www.ebaymainstreet.com/sites/default/files/ebay_us-small-online-business-growth-report.pdf
- Platform-Enabled Small Businesses & Inclusive Economic Opportunities (Europe) http://www.ebaymainstreet.com/sites/default/files/ebay_report_pesbieo_vf.1_1.pdf
- eBay's Report on European Market Potential http://www.ebaymainstreet.com/sites/default/files/ebay_europe_dsm_report_10-13-15_1.pdf
For Further Consideration:
• Choosing an eCommerce Channel Mix
• Protect Your Online Brand
• Optimize Your User Experience (UX)
• Build Your Digital Brand
• Getting Paid from Cross-Border eCommerce
• Ship Your eCommerce Products
• Manage After-Sales Service
• Price Your eCommerce Products
Related Export.Gov Articles:
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