Strategies for E-Commerce Growth and Effective Expansion into Global Online Retail Markets

Abstract

E-commerce is the primary means of commerce in the 21st century; however, most retailers experience difficulties translating their success at home into success on an international scale. This research looks into the strategic drivers that determine whether an e-commerce business grows steadily in foreign e-commerce markets or reaches the ceiling for growth when compared to similar retailers in their home countries. Unlike other research, where internationalization is treated as a yes/no question of whether or not to enter the market, this paper looks at internationalization as a continuum of dynamic capabilities, with a successful expansion depending on the interplay of market intelligence, level of digital infrastructure readiness, appropriateness of revenue model (i.e. the method in which an e-commerce company generates revenue) and the level of consumer trust architecture (i.e. how much consumers trust the e-commerce business) for that particular country. The study looks at three different geographies that provide case studies of varying strategic complexities and represent geographical e-commerce markets that have received little attention from North American e-commerce companies: Brazil's mass-market retail sector continues to evolve quickly as a result of digital technologies, the Gulf Cooperation Council (GCC) is characterized by a high average consumer spend and mobile dominance, and Japan has highly sophisticated technology but culturally insular retailing. Data were collected from 412 e-commerce growth strategists, category managers, and directors of cross-border trade through a structured questionnaire, which was supplemented with 26 interviews with practitioners. The analysis of the data made use of Partial  Least Squares Structural Equation Modelling (PLS-SEM) and qualitative thematic analysis concurrently. The results indicate that Market Intelligence Orientation (β = 0.51, p < 0.001) and Revenue Model Localization (β = 0.43, p < 0.001) are the largest drivers of international e-commerce revenue performance and represent 64.7% of the variance of the outcome. A new framework, the E-Commerce Market Penetration Ladder (EMPL), has been developed to provide a strategically tiered approach to capability investment sequencing based on the level of market readiness. The overall contributions made by the study include new theories/models of the international marketing strategy, managerial decision frameworks, and highly focused public policy recommendations aimed at facilitating digital trade among countries.