Sellers Miss Cross-Border Growth and Business Potential
Freiburg, October 19 2017 – German online retailers are less active in cross-border trade than their international counterparts. According to a recent survey as well as current market data and studies, under 60 percent do business outside of the German-speaking countries. Two thirds (68 percent) make less than ten percent of their online sales in international business, and only 18 percent have customers from abroad. These statistics are included in a new white paper on the “Internationalization of the German Digital Economy” by OXID eSales and TextMaster. It can be downloaded via http://bit.ly/oxid-textmaster. The authors show cross-border business potential and give recommendations for building an international shop presence.
international business: the state of german shops
Germany finishes sixth in the ranking of the most popular international trading places. Only 14 percent of international customers buy from German online shops – significantly less than, for example, from US sellers (45 percent). What is more, international customers are considerably more willing to do cross-border business than Germans. Just one in four (27 percent) German online shoppers buys abroad while some of their European neighbors reach 87 percent (Portugal), 49 percent (Czech Republic), and 67 percent (Ireland). The main reason for a cross-border purchase as given by 66 percent of respondents is the availability of an item.
Graphic: Four out of ten German online shops restrict their activities to their home country
As many as 33 percent of online retailers have internationalized their shops. Ten percent even have branches abroad.
The most popular items for purchasing online across borders are clothing, shoes, and fashion accessories (33 percent); consumer electronics (21 percent); as well as books, music, and media (14 percent).
Graphic: Only one third earns more than ten percent in international business
Percentage of international business
One of the largest obstacles to building an online shop for international customers is language. It is no surprise that German online sellers focus their cross-border activities on countries without a (or only a partial) language barrier. 89 percent of all internationally active German online shops do business in Austria, 77 percent in Switzerland. However, other neighboring countries are attractive as well: The Netherlands (73 percent) and France (72 percent) are the third and fourth most important markets. Outside of the EU, the USA (33 percent) and Russia (21 percent) are the top venues, while China`s share is relatively low at 14 percent.
“The results are clear,” says Victoria Weidemann, Marketing Manager DACH for Textmaster. “German online retailers, agencies, and trade show organizers want to reach customers abroad, they are active in these countries, and they expand. However, many of them do not realize that customers want to be addressed and be able to make purchases in their own languages, not just in English. With 23 different languages in Europe alone, there is a massive untouched potential.”
Strategies for International Success
OXID has three tips for online retailers to build their international businesses:
The Textmaster white paper with the results from all studies is available at: http://go.textmaster.com/lp-de-internationalisierung-deutsche-digitalwirtschaft
Data from the current OXID eSales survey can be found on pages 9 through 15.
More recommendations for internationalization are collected in the white paper “Global Success – 12 Success Factors for Efficient Internationalization.” It is only available in German.
Germany-largest city running sessions, free yoga classes, camps and various festivals – this does not sound too much like a must-do for an eCommerce brand, or does it? Well, then you still need to see how SportScheck has combined this with selling sportswear online and offline. In this interview, Jan Kegelberg reveals how a properly thought-out strategy and targeted customer engagement initiatives attract crowds and ensure the company’s prosperity and growth.
Paulina, Ecommerce Capitals: At SportScheck you used to say, “We do sports”. Okay, so what sports do you personally do?
Jan Kegelberg, SportScheck: “We do sports” is our old slogan. We do not use it anymore. However, personally, I still run and play golf.
Since September 2015 you are the Chief Digital Officer ar SportScheck, which is an online shop combining sportswear and sports equipment with the practice of sports – as you also encourage users to try new leisure activities. Sounds genius! What are the origins of this idea? Has SportScheck been like this from the very start of the company?
SportScheck has historically been very engaged in the sports community. Very early, SportScheck already organized skiing trips and provided skiing courses for beginners to get into the sport. Today we operate the largest inner city running series with more than 100.000 runners in 20 cities in Germany, we offer free yoga sessions, running camps, winter testivals, outdoor testivals, and many events more.
Through SportScheck Events, the company is also running some creative projects such as SportScheck WinterTestivals and OutdoorTestivals. Can you tell us a bit more about them? How regular are these? What is the feedback of your customers
Almost all our events happen annually. The OutdoorTestival and the GletscherTestival are special events where our customers are invited to try and test the latest innovations in real live and learn about new features and materials to improve their own sports experience. Both events are sold out every year and people come from all over Germany, Austria, and Switzerland to be a part of the experience.
There is a growing eCommerce trend of brands engaging customers. To really engage is, however, difficult. How do you tackle this problem at SportScheck?
SportScheck already has all the elements which make up the ecosystem for sportive and active people. We offer products, services, content and community, as well as sports experiences. Our challenge for the years to come is to bring all those elements together in a natural and value adding way for our customers. This way SportScheck will evolve from one of the leading sporting goods retailers to one of the leading sport ecosystems.
SportScheck also has around 20 stores, so how do you manage your online and offline sales? Are these combined in any specific way?
SportScheck has been in the omni-channel business for many years. We not only offer omni-channel experiences in a way that customers can order online and pick up their goods in the store, or that our customers can schedule a personal shopping experience online in any of our stores. But, we are also able to sell all products (online and offline) in any store through our inStore iPad App. This tool/service enables our sales staff in the stores to access any inventory and have the product shipped to the customer’s house or to any SportScheck store for the customer to pick up.
Do you do any cross-channel campaigns? What is the brand’s priority now – is it the online or the offline presence? Or perhaps you treat these channels equally?
Currently, our sales are split 40%/60% between online and the stores. We strongly believe that stores will be relevant for our vision and operational success. We treat both channels equally and we see strategic advantage in having an omni-channel setup.
SportScheck is available in the entire DACH region. What is the position of the company in Germany compared to Austria and Switzerland?
SportScheck currently sells in all three countries. However, we operate retail stores only in Germany. In Austria and Switzerland we are represented through our online store. Germany is our home turf, here we generate most of our sales. But Austria and Switzerland are important regions for us in terms of future growth.
Based on your expertise – since many companies from outside Germany think of entering the German eCommerce market – would you recommend starting in Germany and entering Austria and Switzerland later? Or perhaps it is just fine to enter the entire DACH region at once?
This question cannot be answered generally. This strongly depends on a company’s strategy, market segment, etc.
In your LinkedIn profile you’ve mentioned that you were also the CEO of a small technology startup in the field of live streaming and communication. The company completed two rounds of funding, secured technology patents, but ultimately did not achieve commercial traction. It all took more than two years. I guess that since you’ve included this in your profile, you don’t perceive this as a failure – while many other people would! What did this episode of your career teach you?
No, it was a very valuable experience. Building something from scratch is quite different than operating within a developed framework or an organisation. Planning periods are much shorter, results must be delivered in a much shorter timeframe to keep the project going, but also many more topics must be dealt with. But most importantly, it is crucial to learn to focus. For a startup, the world is wide open, the opportunities are endless and it becomes very tempting to pursue too many options at the same time. Only clear focus helps to keep teams, tech, and funds on track.
Your next professional steps included eCommerce executive roles based in Moscow, Russia – in Otto Group Russia and eSolutions (a member of the Otto Group) respectively. Having spent nearly 4 years in Russia, what are your first associations with the Russian eCommerce – and why?
Russia is a vibrant market with endless opportunities. The market has developed dramatically over the past years and it will continue to do so. Two key challenges still exist: the sheer size of the country, and the low level of prepayment.
The size of the country puts goods in a very long transit. So, a lot of inventory is out in the market, which requires a lot of working capital. It can take up to 50 days for a product to leave the warehouse, reach the consumer, and get returned to the warehouse.
Consumer trust in ecommerce companies is very low. There has been quite some fraud in the early days of online business in Russia and consumers are very careful with paying upfront. So almost 80-90% of orders are paid for by COD (cash on delivery). This makes payment particularly cumbersome and expensive. But solutions are being worked on and improvements have been made in the last years.
Coming back to SportScheck, what are the company’s plans for 2018? What do you plan to do to ensure further growth of your brand? Are there any plans for further expansion to Europe?
Our current focus is operational excellence. In retail, customer focus and operational efficiency are the core pillars for success. In addition, we are laying the groundwork for bringing the sports ecosystem to live.
“What Fast Fashion companies such as Zara and H&M have successfully done offline, we are now taking online to the next level,” says Roman Kirsch, the founder and CEO of Lesara.com, one of the fastest growing online shopping platforms in Europe. In this interview, you will learn how he built this empire, what makes it so disruptive – and why he thinks it's so important to never compromise on hiring the right people.
Paulina, EC: “Trendy fashion and exclusive products don’t need to be expensive, ” – that’s the motto and the founding idea of Lesara. How do you make this reality? Where’s the catch that you’ve managed to bypass?
Roman Kirsch: We are a company that has a clear vision on how to disrupt one of the biggest and most profitable industries in the world, the one of fast fashion and mass-market apparel. During my travels as CEO of Fab Europe I saw the huge potential of the Asian market, so with the vision of revolutionizing the world of retail and online trading and making it more efficient, we started Lesara. Traditional supply chains with numerous middlemen prove to be time consuming, non-transparent and expensive. These are factors that Lesara bypasses through direct sourcing and cooperation with local producers, and unmitigated control of the supply chain. We managed to directly link suppliers and end consumers, which offers a clear benefit in every aspect to its end users: fast delivery times, high quality standards, best price guarantee and a consistent instant response to trends and the customer’s desires. Through vertical integration, we have successfully established Lesara in the e-commerce area as a pioneer in Agile Retail.
Lesara began as a startup. Did you take part in any venture capital or acceleration program? Or perhaps you have done everything on your own?
I started my entrepreneurial career with a souvenir shop when I was 15 and have been passionate about launching and developing businesses ever since. In 2011, I founded Casacanda, an ecommerce company for European design. It was acquired by Fab.com in the following year and I spent a year as the CEO of Fab Europe. I founded Lesara in 2013 - together with Matthias Wilrich (COO) and Robin Müller (CTO).
We have had four funding rounds at this point, where we raised $40M in funds during the last round led by various investors from the UK and the US. This last financing round has brought the total funds raised to $60M, and has allowed us to expand to new markets this year, such as Spain, Sweden and Denmark.
On your website, you mention that Lesara’s team grew from 5 to 300 employees. That’s an impressive growth – and an equally impressive number of employees! What were the milestones of your growth?
Our team is essential for our success. That’s why we never compromise on hiring. It is also very important to us, to maintain our unique spirit and company culture which is why we introduced our Culture Code earlier this year: To maintain the culture and the startup spirit that we had in the beginning, even as our team gets bigger and bigger. Our Culture Code consists of our company values and how we put them into practice within our teams on a daily basis. (Lesara Culture Code: https://www.slideshare.net/LesaraGmbH/lesara-culture-code)
A milestone was when we were awarded ‘Europe’s fastest growing Tech Startup’ last year. As our teams and employees are a key factor to keep growing as fast as we do, this award was really due to all the hard work everyone put into it and was both a reward and a motivation for the whole team.
If you were to summarise the growth of the team behind an online shopping platform like Lesara, in which areas of operation does the company grow the fastest? In other words, what are your most sought for specialists? Are these sales people – or perhaps customer service specialists?
Right now, we invest a lot in our Tech team, but as we are growing very fast and are constantly opening up new markets, we are still hiring for all our teams. It’s always a challenge hiring the right talent that are motivated, smart and ambitious enough to take on the major players in the industry. No matter which team we are hiring for, we are looking for the right attitude and for the right team and cultural fit. We believe, when seeking new talent, it’s worth taking some time rather than compromising. Our recruiting process is known to be tough and diligent: Only 1% of all applicants get hired - a rate that is more selective than Harvard.
What are your main competitors – and what is your current market position? What makes you different from your competitors from the point of view of your customers?
What Fast Fashion companies such as Zara and H&M have successfully done offline, we are now taking online to the next level: Agile retail is the fast moving, future kind of shopping and the next inevitable and promising step to a new level of international online retail, which combines the benefits of online and offline e-commerce and offers customers a unique way of a quicker, faster and better shopping experience. Agile Retail is about understanding through data what trends are popular with consumers at this very moment and being able to react on it instantly with a seamless integrated supply chain.
For our customers this means: We have in stock, what they are looking to buy! We guarantee the best price for a great variety of new, trending and high quality products launched on our website each day. Our delivery is fast and safe, and we offer the most secure payment methods. Our customer service is first-class, and we make sure you have an extraordinary and inspiring shopping experience!
Lesara has its headquarters in Berlin, but it also has another office in Guangzhou, Southern China. What part of your sales comes from the Chinese ecommerce market? How important is your presence in China in relation to your presence on all the other markets?
We don’t have Chinese market presence at this point, but we have a second office with a staff of 70 people, which is located in Guangzhou and which we opened up in 2015 to ensure a good overview of the entire supply chain. The sourcing and production of many of our products is done in China, as well as most of the product photography and the quality control. We are in control of everything beginning to end, and by cutting out the middlemen and establishing long-lasting, good relations with our suppliers, we are able to ensure a faster, better and more efficient delivery system as well as a great product quality.
How diverse are your customers from different European countries? What helps you to notice, understand and react to these differences?
We want to ensure a unique and localized shopping experience for all our customers, wherever throughout Europe. This starts with offering localized storefronts per country, and providing our customers with a tailored selection of products that fits their preference.
Another factor is that we focus on working with local partners for more localized payment options and delivery methods. We have return warehouses in many of our key markets to ensure faster and better returns for our customers.
Take Italy as an example: It’s currently our second biggest market, and it’s very different from our home market Germany. The experience with online shopping as well as the trust in E-commerce companies is much lower than in Germany or in Nordic countries for example, which is why we invested a lot in trust-building activities. We worked with local celebrities and partnered with Trusted shops, but we also invested a lot in a big and reliable customer care team to assist our Italian customers the best we can.
In 2017, Lesara won the ‘Criteo’ award for the most innovative performance marketing campaign. Can you share more details about this? What were the origins of the idea for this campaign? Who were your rivals in the run-up to this prestigious award?
There is constantly a lot of innovation and change happening and we always aim at staying ahead of the trend in performance marketing.
We launch 2000 new products online each week, and in order to find new potential top sellers we needed to automate the detection process. For this reason specifically, we created the campaign that won us the Criteo award. The campaign we created is agile, and helps us to identify trends within trends. We used the new prospecting with dynamic ads feature to automatically test new products & old bestsellers for their marketing potential. These feed-based ads are shown to our high potential target groups and the best-performing products were used to create additional, conventional prospecting campaigns.
Our competitors in the category for most innovative performance marketing campaign were Campanda and Telefonica.
What are Lesara’s plans for 2018? What do you want to do to ensure Lesara’s equally impressive growth in the future?
One of our goals is to continue our vision of creating a more fashionable world for everyone. We want to continue expanding across geographies and customer groups. As a company we also want to continue investing in technology, especially with respect to personalization of customer experiences: we want to be on top of innovation such as voice and augmented reality, and invest in our infrastructure in terms of logistics, sourcing and marketing.
And, finally, a bit of privacy. You have impressive education background and work experience. This article from The Telegraph serves as a great summary of your so far achievements. If our readers wanted to try walking in your shoes to become an ultra-successful entrepreneur one day, what tips would you give them? What should they do – and what should they avoid doing?
First, build your network before you need it - be proactive about getting in contact with other companies and entrepreneurs to share experiences and knowledge.
Second, thinking big wins - at Lesara we believe in putting action first and working fast and efficient.
Third, company culture wins long-term. The first hires are very important in getting the culture and trajectory of the company right, so don’t compromise when it comes to recruiting and invest a lot in your company culture. Write down the values of your company culture, make them visible and share them to make them a core belief among all staff.
On 9th November 2017 the E-Commerce agency Flagbit from Karlsruhe will host the 31st E-Commerce Forum Karlsruhe as a special edition. The #ecommka XXL will take place in the Kesselhaus Färberei in Karlsruhe and is going to present a lineup of high-class / top C-level speakers from the German-speaking e-commerce and marketing industry. The highlights on the #ecommka stage: Philipp Westermeyer (CEO Online Marketing Rockstars), Alain Veuve (CEO Accounto Technology AG), Alexander Graf (CEO Spryker and Kassenzone.de) und André Morys (CEO Web Arts AG and KonversionsKRAFT).
The E-Commerce Forum Karlsruhe has grown to one of Germany´s largest e-commerce events on a regular basis. On 9th November it will already be the 31st forum, which is also the final event of the E-Commerce Forum Year 2017! Therefore the event is going to have a much bigger frame and is going to be an XXL version in a classy event location to discuss current ecommerce and marketing topics with the speakers and attendees.
The digital transformation of companies and commerce is in full swing. New business models and startups are emerging at an unprecedented speed and thanks to their digital DNA they are putting traditional companies under high pressure. At the same time, large platforms, the so-called GAFAs (Google, Apple, Facebook, Amazon) are increasingly gaining influence on consumers and bundling customer access through their channels, devices and operating systems. The internet is not only constantly revolutionizing our way of communication, but also the way we trade and exchange goods and services. Virtual Reality (VR), Artificial Intelligence (AI), Voice Assistants, Blockchain, Internet of Things (Iot) – these are the current topics of digitalization, but quite often just buzzwords!
With Alexander Graf, Alain Veuve, Philipp Westermeyer and André Morys four absolute experts and prominent faces from the various ranges of e-commerce and marketing will be on the #ecommka stage in November presenting what really matters in the online trade and the digital transformation and where growth potentials hide. The already proved serveral times at numerous congresses, events and on their own channels, that they not only deliver an entertaining show, but above all high-quality and relevant content!
Alexander Graf is one of the best known personalities in German e-commerce industry. He is CEO and Founder of Spryker Systems, a still young and innovative commerce operating system, and author on his blog Kassenzone.de and of the “E-Commerce Book”!
Alain Veuve is CEO of Accounto Technology AG and Member of the Agile & Digital Transformation Advisory Board at AOE. He is an expert on agile development and agile company culture and blogs regularly about the digital transformation on alainveuve.ch.
Philipp Westermeyer is founder and CEO of Online Marketing Rockstars. Each year he organizes the Online Marketing Rockstars Festival in Hamburg, where he hosts Marketing Stars from around the globe.
André Morys is Mr. Conversion Optimization! He is CEO at Web Arts AG and founder of KonversionsKRAFT also lecturer at Fachhochschule Würzburg and author of the book “Conversion Optimierung”.
9th November 2017 – the e-commerce highlight in Karlsruhe!
The program for the E-Commerce Forum Karlsruhe XXL in 9th November is set up and also the appropriate ambience for such an event is ensured! To round off the evening, Flagbit and its partner Inxmail will provide drinks and excellent finger food from the Kessehaus kitchen, which is all included in the ticket price.
You will find tickets and more information on www.e-commerce-forum.de/xxl-forum
Secure your spot in the E-Commerce Berlin Expo 2018 agenda on February 15, 2018 at Station, Berlin and share your knowledge about e-commerce! Take part in the Call For Papers-Contest 2018 now and present in front of more than 4000 industry professionals and 100 exhibitors.
The biggest pure e-commerce event in Berlin which gathered more than 3000 visitors and hosted over 85 industry leaders, such as DHL, Idealo, Otto Group, Rakuten, Alibaba, Meet Magento Association and Google, in the past edition is announcing its comeback this coming February 2018.
The E-Commerce Berlin Expo creates a space for small to big e-commerce companies and professionals to network and share insightful information about the industry. Covered Topics include e-commerce in social media, sales channels, performance marketing and programmatic marketing, SEO tips for e-commerce businesses and data-driven e-commerce.
This coming February you can get the chance to be selected as a speaker at the E-Commerce Berlin Expo 2018. Take part in the Call For Papers - Contest now and submit your idea here → https://ecommerceberlin.com/submission
Submissions are free of charge and accepted until October 30, 2017. Speakers can qualify for the agenda by the number of registered votes.
First confirmed Speakers:
● Luka Brekalo, E-Commerce Manager, L'Oréal
● Daniel Kramer, Manager - E-Commerce & Sports, Facebook
● Lior Barak, Senior Marketing Analyst, Zalando
● Rob Cassedy, General Manager, Ebay Kleinanzeigen
● Rowan Merewood, Developer Advocate Google
● Victoria Chirita, Founder, DeinDesign
The E-Commerce Berlin Expo will be taking place for the third time on February 15, 2018 at Station Berlin. Doors will open at 10 AM and is expected to welcome more than 4000 visitors. The annual fair has become one of the leading e-commerce events in the Berlin with representatives from Google, Otto Group and Alibaba Group as past participants. Learn more at: http://ecommerceberlin.com