International retailing has witnessed multinationals vying for customers in the emerging markets. Eager to take advantage the largely untapped consumer base, but not willing to take the risk of store failure; the internet has now become THE shopping platform from which well known brands can be catapulted into the markets of developing countries.
During the late 1990s literature began to notice the intensity of retail foreign direct investment (FDI) into the emerging markets of East Asia, Central and Eastern Europe and Latin America. Major UK brands such as Marks and Spencer, Next, Argos, Debenhams etc, all vied to be the first to take advantage of the untapped well of consumers in foreign markets through wholly owned international stores or franchises.
Since then numerous studies on the failures of UK multinationals located in foreign markets has revealed certain barriers to the processes of internationalisation. For example the difficult socioeconomic infrastructure of many African countries poses an obstacle for the multinational preference to adhering to strict standard of operation.
In 2004 Neil Coe wrote that the study of the internationalisation process of Lead Brand retailers should move beyond the then current definition to include the strategies of firms without a presence in the host country. It is only then that the full extent of the internationalisation process can be appreciated.
A fitting role for the Internet.
The internet has been a major protagonist in the increase in popularity of cross-border shopping, and provides an opportunity for multinationals to get their brands into markets considered too hostile for physical store location. Prophetically, in January 2010 the Chief Executive of Next PLC announced that they will be moving their focus away from wholly owned international stores to direct sales over the internet. He stated:
“the internet will allow us to serve a customer base which is dispersed over a large area without the need to take on fixed assets and stock holdings in numerous locations. Whilst in any one town or city there may not be enough Next customers to justify the investment in a store, there are enough customers in a whole country to justify the investment required for us to trade online” (Source: Next plc Results for the Half Year Ended July 2010)
Neil Coe, it seems, will get his wish.
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International Transactions on the Internet – The Visa difference
Visa is a payment system provider that makes money flow by enabling cardholders, retailers and banks to do business with each other. However, access to VISA varies globally, resulting in the differing scale of usage from country to country. From an entrepreneur point of view having an Internet business that provides access to international shopping that is compatible with all environments takes a certain talent that can give a competitive advantage.
