Bringing Down the International Barriers

SAN MATEO (05/01/2000) - With the Internet opening international business markets previously considered unreachable, having an international e-commerce strategy will soon become a necessity rather than a luxury.

However, doing business overseas brings an entirely new set of obstacles for e-businesses: Issues such as language barriers, tariffs, diverse currencies, and customs regulations all have to be overcome before a successful international e-business strategy can be introduced.

As a result of these problems, many companies have yet to move their e-businesses beyond their native shores. According to Cambridge, Massachusetts-based Forrester Research Inc., only about 15 percent of U.S. companies conducting business online can fill international orders, and most of those are shipping to just a few countries in Europe and Asia.

For companies that can solve these globalization problems, however, the potential rewards are great. For example, IDC , in Framingham, Massachusetts, predicts that by 2003 more than 60 percent of Web users will reside outside the United States. Similarly, Stamford, Connecticut-based Gartner forecasts that the share of global business-to-consumer e-commerce transacted outside of North America will rise to 61 percent by 2003, while the share of business-to-business e-commerce is expected to increase to 63 percent by 2004.

In addition to finding themselves with an increasingly small share of the e-commerce pie, companies that ignore the trend may find themselves paying for it in other ways as well, according to many analysts.

"A lot of companies are out there building sites with little thought given to globalization. They're building these houses that will have to be torn down," said Eric Schmitt, an analyst at Forrester.

Realizing that these problems represent a huge opportunity for them, many vendors are stepping up to provide technologies that enable companies to take their products and services global. According to Schmitt, this is a trend that will continue into the foreseeable future.

"I think it's really a harbinger of things to come. We're going to see more technologies that can enable and facilitate those types of international and global reach," Schmitt said.

For example, Global CommerceZone, formerly known as vShip, recently unveiled Custom Wire, a payment-processing system that helps remove some obstacles to international trade and expedite the movement of goods, data, and funds, according to officials.

Additionally, Global CommerceZone signed a services agreement last week with the U.S. Postal Service, through which the Postal Service will complete shipments to Canada, France, Germany, Japan, and the United Kingdom. Called Global Package Link, it is a trackable package-delivery service that provides total landed costs and helps companies fulfill merchandise orders to customers around the world, according to company officials.

"Most retailers want access to large and rapidly expanding international markets," said James Treleaven, president and CEO of Global CommerceZone. "With our service, they can open up those markets without having to substantially change their existing infrastructure for online sales in the United States."

Another company providing shipping alternatives is GoShip, which provides what it calls "personal shipping." GoShip offers a wide variety of carriers, services, and price plans for shipping goods worldwide at the time of purchase.

GoShip officials said the company's services benefit not only the business selling the goods, by eliminating a step from the transaction process, but also the consumer, who can choose with whom and for how much he or she wants to have purchased goods delivered.

"GoShip's service will be able to provide international merchants extended flexibility with shipping, allowing both merchants and end-user customers control over the transportation of goods," said Paul Esdale, vice president of marketing at Burlington, Massachusetts-based Open Market, which intends to offer GoShip's services to its customers.

According to one analyst, services such as these fulfill a fundamental need in international e-commerce, not least because meeting post-transactional fulfillment needs of the customer is often a crucial factor in customer loyalty and satisfaction.

"If you are selling things, you have to be able to fulfill them and offer good customer support," said Preston Dodd, a senior analyst at Jupiter Communications, in New York.

Capstan Systems is another company targeting the international e-commerce market, although it is concentrating on U.S. companies that need to import goods and services from overseas.

The company has launched a suite of applications that integrate and automate the international supply chain, including supply and demand management, global logistics, import and export compliance, and relevant documentation.

"There are so many hoops you have to jump through for [imports]," said Ron Alverez, CEO and president of Capstan. "Outgoing [exports from the United States] is hard, but incoming is even harder."

Also helping businesses untangle the mysteries of international customs logistics and laws is myCustoms, which has hired customs officials from other countries to help automatically file the appropriate customs forms for companies using their service.

Officials from myCustoms said that although some countries still only accept paper documents, many have already implemented electronic filing capabilities.

The most obvious problem with international trade is the language barrier, which is an issue that even those companies already doing business overseas have yet to address, according to one analyst.

"We took a look at the Fortune 100, and we found that only 36 of them had sites in a language other than English," said Forrester's Schmitt. "I'm willing to bet 99 of them do business in other countries."

Addressing the language barrier is Uniscape, an ASP (application service provider) specializing in translation services. Last week Uniscape unveiled its Globalization Infrastructure for eBusiness, a software platform aimed at creating multilingual, multicultural e-businesses in 42 languages.

The platform includes the Global Content Manager, which monitors changes on corporate Web sites and triggers multilingual content-localization processes, said Howard Schwartz, vice president of marketing at Uniscape. This differs from simple machine translation by allowing reuse of the translation process through a repository of manually translated phrases.

However, as Jupiter's Dodd pointed out, the barriers to global e-commerce transcend simple language limitations.

"Language is only one tool in a successful global reach," Dodd said. "You have to be able to understand the nuances of the culture, and that needs to be reflected in the messaging."

The Uniscape announcement was strengthened by a partnership with Internet ad giant DoubleClick, allowing the latter to localize ad campaigns in German and French.

The partnership indicates that the move to global ecommerce is no longer a phenomenon, but rather it has taken root and is pushing the boundaries of business even further.

"When you start getting the DoubleClicks of the world involved, it's the type of thing you need to see for legitimacy in the marketplace," Dodd said. "It's still a nascent market, but the technologies are catching up."

Global CommerceZone Inc., in Chicago, is at www.gczone.com. GoShip Inc., in Laguna Niguel, California, is at www.goship.com. Commerce One Inc., in Pleasanton, California, is at www.commerceone.com. Capstan Systems Inc., in San Francisco, is at www.capstan.com. Based in Menlo Park, California, myCustoms is at www.mycustoms.com. Uniscape.com Inc., in Redwood Shores, California, is at www.uniscape.com. DoubleClick Inc., in New York, is at www.doubleclick.net.

InfoWorld News Editor Matthew Woollacott contributed to this article.

Globalization glitches

Enterprises looking to do business overseas face a variety of problems.

* Assessing international tariffs and customs regulations* Pricing goods and services in foreign currencies* Providing foreign-language support on Web sites* Providing order fulfillment, shipping options, and customer service.

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