Retailers Could Profit From Being More Worldly Online

06/02/2004

Over one-third of companies surveyed by CyberSource do not accept international orders, and they may be missing out on a lucrative market.

CyberSource surveyed 147 key decision makers at top e-commerce Web sites in North America. Of those respondents, 30% were CyberSource customers. Exactly 46% of respondents worked for companies with between $10 million and $25 million in annual online revenues, 31% worked for companies with between $25 million and $100 million in annual online revenues and 23% were with companies with less than $100 million in online revenues.

Nearly twice as many e-commerce Web sites in North America accept or plan to accept international orders as those that do not accept them -- 64% to 35%, respectively. Only 1% previously accepted orders from around the world but now do not.

Among the reasons having the most "significant influence" on companies that decline to accept international orders are fraud risks (43%), logistics of order fulfillment (42%) and export regulations (38%). Only 12% feel that the sales opportunity or demand for their products internationally was too low. This demonstrates that technological and legal issues are the primary blockades stopping companies from tapping into a potentially profitable market.

Considering that CyberSource also found that 35% of companies accepting international orders online generated 10% to 30% of their income from global customers, and 28% generated more than 30% of income from international visitors, those e-retailers that do not accept global business may be missing out on a good deal of income. Add to that the fact that just 1% of companies that had accepted international orders ceased doing so, and it seems that the move rarely backfires.

Source of Article: eMarketer

Date of Article: June 2, 2004