The Brexit of English and your globalization strategy
Is your company capturing the global revenue potential of the multilingual web?
By Salvatore Giammarresi, Head of Content and Globalization at PayPal
Startups, scale-ups and established companies with global ambitions should pay close attention to the continuously evolving revolution of the ecosystem of multilingual online audiences.
According to Common Sense Advisory, 75% of buyers in non-English-speaking countries choose a product online in their own language rather than in English. And this is also true for millennials, who are generally more comfortable with English.
Targeting the most appropriate languages and countries helps you maximize your investments by capturing a larger share of the potential revenue of your business: in 2020 the global e-commerce potential will surpass 2.5 billion US dollars. Addressing the English-speaking audience only allows you to reach 1/3 of this potential. According to T-Index, a statistical index that ranks countries according to their potential for online sales (which I have had the pleasure of being involved with since 2005), you will need a minimum of 8 languages to access 80% of worldwide online purchasing power:
Reassessment of the upcoming languages
In 2016, just 2 languages are needed to reach 50% of online purchasing power, while in 2020, 3 languages will be necessary (English 33.1%, Chinese 12.8%, and Spanish 8.4%). 5 years from now, all the traditional key languages for e-commerce, such as English, Japanese and German (with the sole exception of French) will lose market share.
Russian and Arabic will pass Italian. Moreover, emerging languages such as Turkish, Indonesian, and Farsi are worth considering: they represent market shares that up to now have barely been explored.
Taking advantage of the multilingual web’s revenue potential is a big challenge for all types of companies, particularly those who don’t have a mature globalization strategy including relative tools and processes. In the absence of a well thought out globalization strategy, today many startups, scale-ups and large companies rely on a “one-off” country-specific product strategy that mimics their US-first product strategy. This might work as long as they focus on just a couple of countries, but in order to truly take advantage of the economies of scale and reap the full benefits of their globalization investments, companies must think and work in a completely different way.
Guidelines to drive globalization
In general, the right globalization strategy could dramatically increase global revenues; however, most companies don’t proactively make broader decisions based on a mature globalization strategy. Most company’s globalization efforts are reactive and based on “after-thoughts”, while one of the main keys to success is preparing for globalization at an early stage. Here are some best practices:
- Are you a startup? If you are starting your business online, and even if you are not targeting global markets at first, you should still have a globalization strategy. Many startups fail to do so and don’t take their future global aspirations into account when they plan their technical platform and architect and design their products. At a minimum, your platform and products should allow for the input, storage and proper handling of multi-cultural and multi-lingual formats such as addresses, phone numbers, etc. If you think about this basic level of globalization too late, you may be forced to re-architect and re-platform your site, which could take up to a full year, after which important market share and growth opportunities might be gone.
- Are you a scale-up? Once you want to offer your product to the world while maintaining high speed, high quality and low cost, make sure to choose the countries and languages that best fit your growth plans, while bearing in mind that the online audience scenario is rapidly changing. If today English, German, French are the ideal languages for your website, tomorrow digital companies will look at Chinese, Portuguese and Russian as well. As a matter of fact, on average more than 70% of total revenues of successful companies come from global markets.
- Are you an established company? In today’s global marketplace, active online companies cannot survive without a mature globalization strategy, and should therefore invest in people, tools and processes to nurture further growth in international markets. In particular, this involves websites, mobile apps, product catalogs, reviews, customer service, promotions and “calls to action”, always provided in the local language and highly adapted to the local culture and local customers’ expectations.
These facets are the basis for building loyal relationships with local customers or prospects. But that’s not all: they are key for successfully facing the challenges of new markets.
Brexit of English?
In the current online market scenario, publishing your product or content only in English is not enough, and may significantly restrict your potential to reach a broader audience of prospects worldwide. Brexit for English, then? Not really: it’s still the lingua franca of the web and the top language for maximizing online sales, but the trend is clear, and English will steadily decline over the next few years.
Long-tail languages will gradually demonstrate their potential, and marketers will have to consider an ever-increasing number of languages in their globalization plan to reach more online clients worldwide.
Which countries matter the most for online opportunities
T-Index, created by TRANSLATED (the Pi Campus founding company), ranks 195 countries according to their potential for online sales, and has thus made it easier for entrepreneurs to understand which countries to focus on and which languages to localize their content into, in order to globally scale their business while maximizing revenue potential.
Companies with global ambitions and entrepreneurs aiming to capture new customers from the depths of the multilingual World Wide Web jungle should pay close attention to the upcoming revolution in the ecosystem of online audiences. A few examples:
- The BRIC countries (Brazil, Russia, India, China) continue to demonstrate growing potential and are gradually imposing their own languages on the web;
- By 2020, the USA, Japan, Canada, Germany, the UK, Italy, France and Spain will lose online purchasing power.
- Mexico and Turkey have all the necessary requirements to become key countries for e-commerce in the near future.
The advantages of localization
Ultimately, one of the most visible consequences of a globalization strategy is offering your products in your customers’ preferred languages: this is why localization and translation are key elements of a mature globalization strategy. If you’re opening up new markets, or want your online business to grow, localization can be a powerful tool that offers:
- A tangible competitive advantage: if competitors are not localizing yet, being the first to offer a localized product will gain you a terrific edge. As the above statistics demonstrate, your organization should not underestimate the power of selling to customers in their own language, especially while the competition insists on speaking only English. Keep in mind that the language of business isn’t English: it’s the customer’s language.
- Unparalleled market penetration: many companies are already selling abroad, but are looking for ways to expand their international sales. They can do so either by selling to new international regions or by increasing market penetration. Even global companies have experienced how localization can boost results in local markets: Starbucks and Blackberry, for example, revealed that featured localized content in addition to global initiatives fostered interaction as much as 10–15 times more than English-only content. On the other hand, it takes just a few culturally inappropriate missteps to derail your product sales.
- Strengthen your image at home and abroad: a mature strategic and global communication plan ensures your brand’s image is appropriately positioned in each country. Localizing your brand and products helps to strike the right balance between your global and local brand. This is essential in today’s world that is continuously becoming smaller, more global, and at the same time more local. Every type of organization no longer has a choice: in order to seek customers, investors, funding or an exit, they need to have a corporate/brand image that is fully compatible with global and local markets.
In today’s globalized market, localization can be a powerful tool to boost your business. Of course, as with all things in business, making the right decisions is essential. In this sense, T-Index is a tool that can help you and your company. It guides executives and decision-makers in their strategic choices of which countries and languages to focus on for the international expansion of their online business.
The T-Index Key Figures
The infographic below summarizes the key points of the T-Index study. You can find the full study here.
About Salvatore Giammarresi
Salvatore is a globalization executive with two decades of experience and a broad set of responsibilities covering international products, technology, program management, content, operations, quality assurance and human resources. He masters organizational change management around a vision of globalization, with a clear focus on metrics, results, ROI and operational excellence. Through his ability to share his vision and drive action across cross-functional teams he has a track record of hyper-enabling international revenue growth.