* More native speakers of languages other than English currently access the Internet than do native speakers of English and the numbers are growing exponentially.
* North America currently accounts for approximately one third of total E-Commerce spending and according to Internet World Statistics, the U.S. made up just 18 percent of all e-commerce being done in 2007.
These statements show why perhaps InternetNews said it best when they wrote “for US companies, multilingual e-commerce and business sites are no longer optional”.
Still not convinced? Read on to find out why the Internet is already serving as an international business medium for many companies and why you may not want to be left behind.
In order to consider whether or not to take advantage of the Internet as an international business tool one must first consider the possibilities it may hold. Who is on the net? Where do they live and what languages do they speak? What do your prospects look like for doing business in Europe, Asia or Latin America? In each of these regions internet usage has grown 231.2%, 346.6% and 598.5% respectively from 2000- 2007.
Although the numbers given in answer to these questions often raise questions of collection and tracking methods, research shows that all of the various statistics and information point toward the same trends. It is these trends that will be highlighted below.
There are approximately 1.32 billion people online throughout the world and only about 20% of them are located in the U.S. As for the remainder, approximately 26% are located in Europe and approximately 39% are located in Asia, which has seen explosive growth in the area of international commerce over the past decade.
Further, roughly 78% of Internet users are native speakers of a language other than English. Out of this 78%, approximately 30% are native speakers of a language of European origin (mainly French, Italian, German and Spanish) and approximately 40% are native speakers of an Asiatic language (mainly Chinese, Japanese and Korean).
It is important also to note that there is a growing and largely underserved group of non-native English speakers right in our own backyard. According to the US Census Bureau nearly 20% of Americans speak a language other than English in their homes. One can not overlook the importance of online communication in the ever-shifting landscape of where online populations live and what languages they speak. The estimates for future Internet use and the potential of worldwide e-commerce continue to grow in scope and profitability.
It is important to remember that several countries in Europe, including France and Germany have been shopping online since the mid-nineties. And now there are newcomers like Spain and Portugal eager to enjoy their new-found purchasing power thanks to a very strong Euro.
Consider France- a European pioneer of e-tail marketing. In 2007, France registered a 37% increase in online purchasing, which now makes up approximately 4% of all retail transactions conducted in the nation. An estimated 16 billion Euros were spent in online transactions in France in 2007 according to Fevad (la Fédération du commerce électronique et de la vente à distance) and that number is expected to grow to 30 billion Euros by the year 2010. In total there are 19 million online buyers in France. During the past three years, the amount the average European spent online grew by 35%. But other countries like Spain are catching up fast with an estimated 68% of internet users in Spain shopping online according to a study carried out by the Interactive European Advertising Association.
In a survey to discover which products Europeans most frequently bought online showed that tickets for traveling (83% searches resulting in 55% purchases) took the top spot, followed by holiday-related gifts (77% searches resulting in 36% purchases) and music downloads (62% searches and 25% resulting in purchases).
Not only are Europeans receptive to e-commerce, their purchasing power is on the rise. Eastern European economies are growing at an impressive rate. As many Eastern European nations look to enter the Euro-zone, their potential as invaluable consumers grows. Additionally, the week dollar has reversed the U.S’s. traditional role, from importer to exporter.
In addition, all studies point toward the growth of the online population in Europe as well as a growth in European e-commerce. It is estimated that while in 1998, only 10% of Western Europeans had Internet access, by 2007 nearly 45% of European’s have internet access. The European Commission on Science and Technology estimates that 8.3 billion will be spent online annually by 2010.
The number of Asian internet users has expanded by more than 345% over the last 7 years. There is the possibility that this, the fastest growing region of the world, may rise to the top of the list of worldwide internet users. At the beginning of 2000, the region had about 44 million people online. It now has over 100 million users (and it should be noted that region has still only achieved a 13.7% penetration rate; there are millions more people who will likely have online access in the coming years).
Further, e-commerce has exploded in this region. A recently released report from the Internet Society of China shows that internet users in China spent RMB 276.76 billion ($35.5 billion) on Internet services in 2006, an increase of nearly 50% over the previous year. Japan too remains economically strong, with one of the highest penetration rates for internet usage in the world. The economic impact of e-commerce on Japan between 2004 and 2009 will increase its GDP by 10%.
While the U.S. accounts for less than half of total e-commerce transactions worldwide, it still holds a small lead in B2B e-commerce. Online sales in the US will enjoy a solid 14% compound annual growth rate (CAGR) over the next five years but it is predicted, that the e-commerce market will grow at a more rapid pace in Europe as well as the developing world over that period which means now is an ideal time for organizations to realign business strategies to target these growth markets before they peak.
USCompanies are Being Left Behind
If your site is still English-only and is only geared towards U.S. visitors, you are not alone. You are actually in the company of about 42% of U.S. fortune 500 companies. Though this number has vastly decreased from 2004, when 75% of said companies were monolingual, there is still room for growth, particularly in consumer based companies whose locations are not limited to the U.S. A prime example of this issue is Gap, a $16 billion U.S. company, with a global workforce of more than 170,000 running more than 3,100 stores worldwide and only an English, American version of their site. Not to mention that their site, which does a brisk online business, does not allow for shipping to locations outside the U.S.
This gives companies with multilingual sites a tremendous advantage. For example, Europeans have a long-standing tradition of using multilingual sales practices that they have successfully adapted to the internet age. European and Asian businesses have more experience with international marketing than do U.S. companies and thus have an edge. For them, the internet is simply another weapon in their international business arsenal.
As a U.S. company you need to remember that because of the Internet, you could have a competitor you don’t even know about, located in Europe or Asia, reaching out to your customer base via the Internet. Furthermore, depending on the extent of information offered on your site, your pricing, distribution and other business models can be studied by anyone with a web browser if this information is offered in the target language.
And that’s not all. Not only might you be losing some business by not reaching out to foreign markets now, you may even be risking potential future losses as well. Remember that if you have a presence on the World Wide Web, you have already, by definition, “gone global”. Don’t be surprised if there are some who reach your site and are unable or uninterested in doing business with your organization because their linguistic and cultural preferences are not properly addressed.
If all of the above information isn’t enough to convince you that there is a demand for you to globalize your website, then consider the natural advantages the Internet offers as an international business tool:
- You automatically have a potential client base of 1,319,872,109 people worldwide, mainly consisting of well-educated 18-60-year-olds.
- By virtue of being on the web, your company is already accessible 24 hours a day regardless of time differences.
- Research shows that even Internet users who have never made an online purchase often use the web to research products and services.
- The success and potential growth of the Euro-zone can make it much easier to break into European markets.
- Increased political and financial stability in developing markets such as Latin American and Asia means a new market of viable business contacts is eager to obtain goods and services.
As Kaizad Gotla, senior analyst at Nielsen-Netratings states, “The easiest opportunities are in countries where internet usage patterns and user/site relationships are less established. Acquiring users in markets that are currently in their growth stages will lead to a loyal user base that will pay dividends for companies in the future.”
It doesn’t have to be expensive or complicated to create a multicultural website offering. And most importantly, if U.S. companies wish to avoid the potential of European and Asian dominance of Internet business, they best consider addressing the world on its terms – with multilingual, multicultural website offerings.