Going global overnight
(IDG) -- Much ado has been made over the Web's ability to give companies instant access to global markets. Launch a Web site and customers from Poughkeepsie to Phnom Penh can find your company and order your goods.
The trouble is that although most U.S. businesses crave the attention from abroad, many are not equipped to greet their overseas visitors. In a survey conducted by Cambridge, Mass.-based Forrester Research, a remarkable 46 percent of the interviewees said they turn away international orders because they do not have processes in place to fill them.
"It was a surprise how high that number was," says Michael Putnam, a Forrester analyst who conducted the research. "That's just money left on the table -- as much as $10 million turned away annually."
Obstacles to pocketing that money range from an inability to handle direct international orders, to language and cultural barriers that hinder basic communications, to varying stages of Internet adoption and infrastructure. Going global is not as straightforward as opening a virtual storefront on the Web.
Nevertheless, the Web's increasingly global reach can make the effort well worthwhile. Although the United States once housed the vast majority of Internet users, as of March, only half of the estimated 160 million "Netizens" lived in the United States, and non-U.S. users were the faster-growing segment, according to numbers compiled by Nua Ltd., a consulting company in Dublin, Ireland.
The growth in the international Internet population means more potential business for U.S. companies, particularly from consumers who are eager to buy products they cannot obtain in their countries.
Although 24 percent of Internet commerce was conducted outside the United States in 1998, by 2002 that number will increase to 45 percent, according to International Data Corp., in Framingham, Mass.
The boost in global sales also means heightened competition from overseas. In some cases, going global via the Web is the antidote to going out of business.
For companies that want to actively court international business, a key step after launching a Web site is preparing to handle international shipping. If the product is small enough to affordably send by airplane, companies can outsource distribution to express shippers such as DHL Worldwide Express, Federal Express, and United Parcel Service. For large items, shipping with a freight forwarder may make more sense.
In either case, companies can get tangled in red tape while trying to comply with the destination country's import and tax regulations, which can be opaque, and with U.S. export controls.
Some U.S. export restrictions are obvious. Most people know that U.S. companies cannot sell to Cuba. But other rules are not so simple. Last November, for instance, the U.S. Department of Commerce restricted exports to 300 Indian and Pakistani entities and subordinate entities believed to be involved in Indian or Pakistani nuclear programs.
"[The Department is] talking about any goods -- clothes, pins, coffee mugs. In this case, our government doesn't delineate what's restricted," says Larry Ferrere, vice president of marketing at Vastera (link below), a Dulles, Va.-based developer of international trade logistics software.
IBM got stung by U.S. export laws in July 1998 when a district court judge fined IBM East Europe/Asia $8.5 million for exporting computers to a Russian nuclear weapons laboratory, according to the Department of Commerce Bureau of Export Administration (link below).
But U.S. export laws are easy compared to dealing with the legal requirements, tariffs, and customs authorities in the 190 or so other nations of the world, according to experienced hands.
"In some Third World countries you have to get as many as 25 to 30 stamps from various customs officials before you can get a high-value package released," says Mike Drilling, vice president of gateway services at DHL (link below), in Redwood City, Calif.
Assistance is available, however. The express delivery and freight forwarding companies can help companies comply with import laws and tariffs -- without assuming legal liability. And logistics software vendors such as Rockport, Syntra, and Vastera help simplify documentation and provide current trade regulation information.
Another issue is setting up payment mechanisms. The high rate of stolen credit card number usage, particularly in Eastern Europe, adds risk to international credit card payments. Also, many Europeans prefer debit cards to credit cards, according to export consultants.
"People in America are far more willing to give out their credit card numbers than elsewhere," says James Finke, president of Interconsult, a Northampton, N.H.-based international trade consultancy.
There are no easy payment answers, but Forrester's Putnam says credit cards are the most expedient means of setting up international payments when companies go global.
Even if companies already have international distribution and payment processes in place, global e-commerce can present nasty channel conflicts, especially when a globalized site makes pricing disparities apparent.
"Once a company puts something up for sale on the Web, they have to say how much it costs. If people in Hong Kong see they can buy it in U.S. dollars for less, that's an issue for large companies," says Mary Cronin, a professor at Boston College's Carroll School of Management, in Chestnut Hill, Mass.
Businesses that sell intellectual goods and services, such as software or research, do not encounter shipping and logistics problems. The Web is the global distribution mechanism. But import/export laws and tariffs still apply, as the vociferous debate over the export of encryption technology illustrates.
Another aspect of going global is reworking Web sites to appeal to audiences in other countries. This entails adding information that offshore customers may need -- such as the country code before the telephone number -- and removing words, colors, and images that do not cross cultures well.
Companies can never tell what will provoke controversy. Lycos, which launched a Korean version of its portal site last month, discovered that its golden retriever mascot did not work in Korea.
"We were hoping that the dog, which is very friendly looking, would be a worldwide symbol. But our senior management for Lycos Korea pointed out that in Korea, dogs have other connotations, namely food. It wasn't very popular in Europe, either," says Jeff Vander Clute, global operations manager at Lycos, in Waltham, Mass.
The following are other examples about which experienced international Web site developers warn.
Organizations that are a little further along in their global Web strategies translate versions of their sites into local languages and/or offer localized content. But translating can be politically tricky, especially because some countries use the same language with different conventions. For instance, using the traditional Chinese character set is necessary to reach the Taiwanese, but mainland Chinese prefer the simplified set of characters. Cisco Systems found that the word for "router" was different in Spain than in Latin America.
"[The language] issue was heavily charged -- Spain wanted the Spanish word [for router]; Latin Americans didn't even know the Spanish word," says Jorden Woods, CEO of Global Sight, the software company in San Jose, Calif., that worked with Cisco on its globalization project.
Using translation and localization services can help global companies avoid many cultural gaffes. For example, localization firm Basis Technology, in Cambridge, Mass., helped Kenan Systems, a developer of telephone billing software, discover that using a musical note icon to lead users to an area about customer notes did not translate.
"Obviously that pun only works in English," says Wendy Sheehan, manager of software engineering at Kenan, also in Cambridge.
When hiring a localization firm, look for one that employs native speakers who live in the targeted region, according to Lycos' Vander Clute. That way, the translators are attuned to nuances that may escape even fluent speakers living outside the country, he explains.
For companies with international divisions, one critical decision is whether to manage content locally or centrally. Many international companies got in trouble initially when their country divisions launched their own Web sites. The local sites used their own designs and often gave conflicting information.
Vendors are emerging with software that helps manage multilingual Web site development and workflow. Global Sight (link below), for instance, produces multilingual content management software called Ambassador that includes a workflow engine, access control, design tools, and a mechanism for flowing translated information into predesigned Web pages. However, with an entry price of about $100,000, Ambassador is only for very large globalization projects.
As in all great Web ventures, going global has its cadre of technical considerations. Most major Web servers now can handle double-byte encoding used to represent Chinese, Korean, and Japanese characters. But the interfaces to back-end systems and the back-end systems themselves are often still written using single-byte programming conventions. That means they return corrupted results when they encounter double-byte characters, according to Tina Lieu, a project manager at Basis Technology, a localization technology vendor.
One solution is to program all Web interfaces using Unicode, which offers a standard encoding scheme for single- and double-byte characters, according to Lieu.
Also, programmers should not hard-code fields such as telephone numbers and surnames, because the data varies in length from country to country, says Deborah Tyroler, a director at International Communications, a localization firm in Framingham, Mass.
Companies going global also must consider how their Web sites will work in low-bandwidth countries such as China. Cisco helps overcome bandwidth limitations by letting visitors choose servers from the nearest region.
Companies can also get geared up to handle requests for product information or orders via e-mail, rather than the Web, because this method does not require owning a PC and having a reliable telecommunications infrastructure.
A well-designed Web site can help market to a global audience. Once companies have internationalized their sites, getting them to show up in local search engines is key to driving traffic. Using meta tags around translated keywords will help search engines find a site, Tyroler says.
Going global is not for the fainthearted. In fact, Forrester says companies must sell $1 million or 10 percent of sales -- whichever is larger -- to cover the costs of internationalizing a site and offering telephone support to customers outside the United States.
But with growth in global trade showing no signs of waning, reaching out internationally via the Web makes good business sense.
Jessica Davis contributed to this article.
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