How can you help your local online business go global?

Globe, boxes and keyboard compositionImage copyright Getty Images Image caption Online shopping has become a $2.3tn global business

In 1995, someone sold a broken laser pen for $14 on a site called AuctionWeb.This was the rather inauspicious start for online shopping, an activity that now generates a colossal $2.3tn (£1.75tn) in global sales.

But these days, shoppers want to pay in any number of ways and this can cause headaches for retailers wanting to expand abroad;so what should they do?

Nigel Whiteoak is the co-founder of LoveCrafts, a virtual hub for knitting and crochet enthusiasts to share their creations and buy supplies.

Having a website rather than a bricks-and-mortar shop meant the team could sell their wares to the world.But taking payments for these international sales wasn't proving straightforward.

"One of the biggest realisations we had when looking to expand was that credit card penetration is generally much lower in most markets outside the UK and US," he explains.

"In Germany, open invoices are very common where you process the payment using a third party, deliver the goods directly to the customer, and then they pay that third party once we have delivered their crafts.

Image copyright LoveCrafts Image caption LoveCrafts founder Nigel Whiteoak says selling abroad has significantly boosted sales

"Whereas in Brazil and Turkey they tend to use local credit cards and pay in instalments."

These regional quirks were difficult to cater for.

But then he came across a Dutch payment company, Adyen, whose payment processing platform harnesses machine learning to customise the payment method depending on which country the buyer is in.

Adyen's clients include heavyweights such as Netflix, Uber and Spotify, so Mr Whiteoak was surprised to find out how affordable its service was, with a minimum monthly invoice of $100 (£75) and transparent per-transaction processing and commission charges.

"Before we started selling outside of the UK we had a turnover of around £6.5m," he says."Last year we posted 10.9 million, and with the bulk of our sales coming from overseas, this growth is directly linked to our ability to offer local payment methods."

Sales have grown 125% over the last three years, he says, proving that knitting and crochet is big business.

Image copyright LoveCrafts Image caption LoveCrafts has found that people in different countries like to pay in different ways

Payment difficulties contribute to about 15% of online shoppers abandoning their virtual shopping baskets before completing the purchase, research suggests.That and difficult-to-navigate, fiddly websites.

Research from Barclaycard finds that while customers demand faster, more innovative and mobile-friendly ways to pay, the reality is one of declined cards, verification delays and annoying hidden transaction fees.

"Remove the need for consumers to set up an account first," advises Greg Liset, Barclaycard's head of small business, "and partner with suppliers that have reliable payment systems that work first time.

"Also, with online cross-border sales expected to soar over the next few years, being able to offer multiple currencies is essential."

Knowing what payment options locals prefer is crucial to e-commerce success.

Research from 2Checkout finds that in the US, Visa, MasterCard, PayPal and American Express still dominate the payments landscape.

But in other countries different favourite payment methods have emerged.For example, in China Alipay now accounts for 54% of online sales.In the Netherlands the iDEAL payment system is used for 44% of sales.In Japan, JCB and Konbini are popular.

Image copyright Getty Images Image caption Shoppers in different countries have their own favourite ways of paying

But in India many shoppers still prefer paying in cash.So Indian start-up BookMyTrain is aiming to simplify the online purchase of rail tickets by offering a cash-on-delivery payment option with its app, as many people in India don't have payment cards.

It is also using chatbots to take customers through the booking process one step at a time.

Simon Johnson, general manager at software provider Freshworks, the firm providing the chatbots for BookMyTrain, says:"Most customers today use messaging apps such as WhatsApp or Facebook Messenger because they like how you can keep a conversation going with whatever device they are using.

"You don't have to be a massive company to personalise the experience more effectively and [smaller] retailers need to have that personal touch to compete with big e-commerce players."

Other payment platforms besides Adyen helping online retailers sell globally with tailored experiences include 2Checkout (formerly Avangate), PayU, PayPal, Stripe and Braintree.

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Image copyright Getty Images

Costs are usually transparent and related to sales volume.With PayPal, for example, retailers can expect to pay 2.9 % of the transaction value plus about 23p per order.Similarly, Stripe doesn't charge extra for accommodating different cards or currencies with a flat rate of 2.4% or 20p per transaction.

But selling abroad isn't just about offering flexibility over ways to pay and support for multiple currencies, it's also about understanding local customs and cultures, argues Nir Debbi, co-founder of e-commerce platform Global-e.

"A common pitfall for businesses marketing themselves abroad is a lack of awareness of the different cultural phenomena," says Mr Debbi.

Planning for international shopping events such as Singles Day in China or Japan's "lucky shopping bags" at New Year "can improve international conversion rates dramatically", he says, "but you need the insight, local knowledge and access to these sales peaks to be able to plan and apply an appropriate strategy."

Later in this e-commerce series we'll explore the best ways for online businesses to market themselves....


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Mobile companies overcharging customers after contracts end

People on mobileImage copyright Getty Images Image caption The government thinks mobile operators need to inform customers once the handset is paid off

Vodafone, EE and Three are continuing to charge customers for the mobile phones they buy as part of a contract, even after the cost of the handset has been paid off, research suggests.

Citizens Advice found that customers who do not take out a new contract are paying an average extra £22 a month.

The government said the mobile firms needed to inform customers when they had paid for their handsets.

The operators said that their billing systems were fair.

Digital skills minister Matt Hancock said:"It's only right that mobile customers should be notified when they have paid off the price of their handset, and that their future bills should reflect this.

"I welcome Citizens Advice's call for better billing information for consumers, and hope that providers will now take the initiative by clearly separating the cost of handsets and tariffs in mobile contracts."

Vodafone told the BBC it strives to give customers "the price plan that best suits them".

"Wherever possible, we contact customers nearing the end of their contract to offer them a range of options.These include being able to upgrade their handset, receiving an extra allowance to enhance their existing plan or, if they choose, a sim-only plan," the firm said in a statement.

Three said:"Whenever a new customer signs with us, we make the end-date of the contract term very clear.We also let them know that they can contact us at any time to discuss the range of options available should they wish to change their plan with us."

And EE commented:"Separating phone and tariff doesn't always represent the best deal for consumers, it can sometimes result in them paying more."

Exploiting customers

The majority of those who take out a mobile phone contract with the cost of the new handset included in the price will have paid off the price of phone over a period of two years, the study found.

The research suggested that users paying out for handsets such as the iPhone 7, the Galaxy S and Xperia XZ Premium, paid £38 extra a month, after the two-year period.

According to the study, people aged over 65 were the most likely to be stung - with 23% staying on their contract past the end of the fixed deal period.

Overall, 36% of people with a handset-inclusive contract failed to change it after the end of the fixed deal period.

Gillian Guy, chief executive of Citizens Advice, said:"The cost of handsets are hidden within some mobile phone contracts giving phone providers a way to exploit their customers.

"It is clearly unfair that some phone providers are charging loyal customers for handsets that they have already paid for.It's especially concerning that older customers are more likely to be stung by this sharp practice."

She called on the phone providers to make sure that any customers staying on a contract past the end of the fixed deal have their monthly bill reduced to reflect the fact they have paid for the handset.

"Providers could make it much easier for consumers to compare prices by separating out the cost of handsets from the cost of services like data and minutes for all contracts;that way it would be much clearer what they're paying for," she added....

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FTSE 100 down at close as Unilever sales slow

Traders in LondonImage copyright Getty Images

At the close of the UK market, Unilever was still the biggest loser after reporting slowing sales growth.

By the end of the day, shares in Unilever were down 5.49%, with the FTSE 100[1] 19.83 points lower at 7,523.04.

The consumer goods giant, whose brands include Dove, Marmite and Ben &Jerry's, said underlying sales in the third quarter of the year rose 2.6% to £13.2bn.

That was slower than the 3% growth seen in the first half of the year.

Unilever cited poorer weather in Europe and hurricanes in the US for the sales slowdown.

However, it said emerging markets such as India and China had seen "signs of improvement".

In the FTSE 250, shares in IWG plunged 32.22% after the serviced office provider issued a profit warning.

The company said third-quarter sales had been weaker than expected, and group operating profit for 2017 was set to be "materially below" market forecasts.

Interserve was another firm to be hit by a profit warning.Shares in the construction and support services company sank 30% after it said trading in the third quarter had deteriorated and it warned it could breach its banking agreements.

On the currency markets, the pound lost ground after UK retail sales figures[2] came in weaker than expected.

Retail sales volumes dropped 0.8% in September, reversing a jump in August, according to the Office for National Statistics.

By the end of Thursday, the pound was at $1.31730 against the dollar, falling 0.25%.Against the euro, sterling was down 0.64% at €1.19680....


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Black Monday 1987: 'Our jaws hit the desk'

Traders in 1987Image copyright AFP

Thirty years ago investors were stunned as global stock markets collapsed like a chain of dominos.

The day became known as Black Monday as months and years of share price rises were reversed in a single day of trading.

One dealer recalls being so stunned "jaws were hitting the desk".

In August 1987, every major US index hit record highs.But in Autumn of that year investors began selling - and - by October, at a rapid rate.

Pessimism appeared to be setting in the days running up to Monday 19 October.

Both the Dow Jones and the S&P 500 had lost more than 9% over the week by the time markets closed on Friday 16 October.

That loss had Asian investors playing catch-up when they opened for business on Monday.

And as more markets opened, that selling activity in Asia sparked more selling in Europe, leaving the US playing catch-up with the losses it had originally inspired.

By the end of the day, the Dow Jones had fallen by more than 20% and the UK's FTSE 100 by 11%.

It ended up as the steepest crash since 1929.

"Our mouths were wide open, our jaws were hitting the desk," says Peter Borish, who at the time was second in command at Tudor Investment Corp, a US hedge fund.

Tudor was one of the few firms to predict the crash and ended up turning a profit by innovative use of computer modelling.

"Fear always trumps greed and fear was at its maximum point then, so when people are fearful rationality goes out the door and they just start selling."

The exact reason for the dive is still a point of discussion.

Many recall the delays in hearing news from other markets around the world.Computer technology and the internet were, after all, still in their infancy and 24-hour television news had yet to take off.

"There was blood running through the streets of Asia and it was slamming Europe and I had no idea because there was no news or television the way there is today," says Kenneth Polcari, a 26-year-old rookie in New York when the crash hit.

"The newspaper I was reading was a day old already."

This also meant that stock exchange trades had to be executed by hand on paper slips, so the high volumes of selling meant deals were delayed by hours.

But a popular explanation is that Black Monday is the first instance of computer trading gone wrong.

At the time, a fledgling computer program used by financial firms around the world provided insurance for stock portfolios.

It did this by issuing sell orders when stock index futures reached a certain level in order to protect companies from further losses.

But as global selling accelerated and losses increase, this created a feedback loop as more and more sell orders were made.

"At the end of the day it happened because nobody chose to question the computer," says Kenneth Polcari, now managing director of O'Neil Securities.

But despite the huge fall in prices, stock markets around the world made a comparatively quick recovery.

In the aftermath, central banks cut interest rates to encourage banks to continue lending, helping to protect the flow of money.

New regulations were also put in place, including "circuit breakers" which created an automatic halt in trading if markets fell by certain levels.

Over the next five years, US stocks grew nearly 15% a year, and UK and European markets rose at rates of around 8%.

"If you look at charts from the Second World War to today, there's a general trend from bottom left to top right and the 1987 crash was only a small interruption to the general direction," says Richard Hunter, head of research at Wilson King Investment Management.

"The fact of the matter is that we're in a pretty sweet spot at the moment.Corporate earnings are very strong, particularly in the States.Europe is in a recovery phase.The return on bonds is next to nothing.And, providing, companies keep their promises, these growth levels are sustainable," he adds.

But Dr Victoria Bateman, an economist and economic historian at Cambridge University, warns no good times can be sustained for ever:"What free market economists are reluctant to admit is that markets are by their very nature unstable.

"The best thing we can do is acknowledge that fact and not overpromise on what markets can deliver so we can weather any potential storm."...

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Amazon: More than 100 cities bid for new headquarters

Amazon Campus 2 in SeattleImage copyright Amazon Image caption Amazon says the new HQ will be the "full equal" of its Seattle base

US cities seeking to bid for Amazon's second headquarters will need to submit their proposals by the end of Thursday.

Amazon plans to invest $5bn (£3.8bn) and create 50,000 new jobs at the new headquarters, which will be a "full equal" to its Seattle base.

The investment will also create tens of thousands of other jobs in construction and the surrounding community.

More than 100 cities have expressed an interest in hosting Amazon's new headquarters.

The cities include:Boston;Miami;Austin, Dallas/Fort Worth and El Paso in Texas;Chicago;Cleveland and Cincinnati in Ohio;Oklahoma City;Salt Lake City;Camden and Newark in New Jersey;Pittsburgh;Kansas City;Phoenix and Tucson in Arizona;Nashville and Memphis in Tennessee;and Detroit and Grand Rapids in Michigan.

Wish list

Amazon announced its search for a location for its second headquarters[1] on 7 September.

The online retail giant said it was looking for:

  • metropolitan areas with more than one million people
  • a stable and business-friendly environment
  • close proximity to an international airport and major roads
  • access to mass transit
  • urban or suburban locations with the potential to attract and retain strong technical talent
  • communities that think big and creatively when considering locations and real estate options

Amazon's Seattle headquarters currently houses more than 40,000 employees in 33 buildings.

The online retail giant estimates that it invested $38bn into Seattle's economy between 2010 to 2016, and believes its presence has led to a rise in the number of Fortune 500 companies deciding to move their research and development centres to the city.

While the new Amazon base presents an attractive opportunity for many cities and regions, the company is likely to expect billions of dollars in incentives and tax benefits in exchange.

Publicity stunts

Most of the cities are keeping their bids a secret, but according to Missouri local newspaper the St Louis Post-Dispatch[2], New Jersey is offering almost $7bn in tax breaks in order to sweeten the deal.

In many regions, metropolitan areas are clubbing together to make a single proposal - per Amazon's request - such as in New Jersey, where Camden and Newark are working together.

Camden is considered to be one of the the country's poorest and most dangerous areas, even though it is less than 100 miles away from New York City.

Other cities are putting on publicity stunts to draw attention to their proposals - for example, Tucson in Arizona sent Amazon a huge 21ft-tall cactus plant, while the Mayor of Kansas City purchased 1,000 items from the online retailer and left product reviews extolling the virtues of the city....


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