What are the Advantages and Disadvantages of ECommerce Localization?

Data Feed Watch said it perfectly: “you need to diversify the revenue streams and never keep all eggs in one basket.” This means that you shouldn’t restrict yourself to your local audience; there is a potential customer base waiting for you in each new country. Tapping into different markets means discovering customers in different countries, and this can increase the value of your business. Who knows how many other customers will benefit from your product or brand?

Nevertheless, it’s not a one-size-fits-all sort of deal. Global expansion isn’t for everyone; localization can help grow your business, but localization cannot perform miracles. Proper localization has resulted in an increase in sales for many eCommerce businesses who’ve successfully brough their products and services to international customers, but not every brand is a global brand. Market conditions affect customers’ buying behavior in different ways – as do cultural norms. When it comes to ecommerce business on a global scale, there are so many balls to juggle, that it’s essential to go into globalization with both eyes open.

Let’s take a look at the advantages and disadvantages of localizing your online business, and why a team of local experts or local marketers can help you divine if localization is the right road for you to take.

Did you know that international expansion isn’t for every business? Even big brands don’t always succeed. Take a look at Tesco’s example and see if international expansion is not for you.

Understanding Localization and Globalization:

Globalization, synonymous in this context with global expansion, represents the free flow of ideas, goods, and services across borders, aiming to create a universal market. However, this broad approach often overlooks the nuanced needs of local markets. Localization, in contrast, involves tailoring products and marketing strategies to specific cultures and markets, ensuring deeper engagement and relevance.

In our article on Content Localization, we define translation, localization, transcreation, and globalization, and when you need it and where. Here’s a summary:

• Translate your product manuals, terms of service, and anything else that would need word-for-word translations so you avoid any legal issues, or weighty problems if any of the words disappear
• Localize your product listing. Employ new keyword research per market, and make sure you pay attention to slang, colloquialisms, pop culture references, and so on in new markets
• Transcreate your slogan, or any assets that need a creative touch to resonate with the new target market, especially if translation and localization don’t quite push the envelope enough
• Globalize your product to appeal to markets all over the world

To make it simple – language translation is needed only when things could go awry if you don’t follow words to the letter. Translation converts content from one language to the other with accuracy, which works with technical documents, legal and medical stuff, and product manuals. Transcreation is used for marketing messages, and often takes a distinct and different look from the original in order to appeal to customers in spite of cultural nuances. Take for instance Black Friday and Cyber Monday – black is the color of mourning and tragedy for Arabian customers, so it’s better known as White Friday in Arab countries. Globalization means adapting your product to suit different tastes across the world – think of Red Bull, which produced a non-carbonated line in China to appeal more to the flavor profile of its Chinese customers. Localization meanwhile is to take the original material, and customizing it to appeal to how customers shop.

You’d decide to expand globally first. Then you’d localize your offer to appeal to customers in that region. Afterwards, you’d employ transcreation to “translate” your marketing materials to appeal to your global customer. Last but not least, you’d translate your product manuals and any other technical information in their native language.

The bottom line? Culture and market conditions affect buying behavior, so it’s crucial to interweave the disciplines together in order to enforce brand identity across many different time zones, and to gain the attention – and loyalty – of audiences in each region.

Benefits of E-Commerce Localization:

Reducing Market Entry Barriers:

Localization helps overcome challenges like limited delivery channels, stringent competition, and lack of brand awareness, as seen in Coca Cola’s adaptation in China.

Coca-Cola went through rigorous market research before entering China, and developed a strategy for cultural adaptation. They combined transcreation and localization services to change their name to “Kekoukele,” which translates to “tasty fun” and closely resembles their global name. This new name effectively encapsulates the brand’s essence and appeals to Chinese consumers.

Furthermore, Coca-Cola’s Chinese logo features white on red, a nod to the traditional color of Chinese festivals. Red, a symbol of happiness, prosperity, celebration, and both spiritual and material well-being, fosters a sense of familiarity and joy, emotions Coca-Cola seeks to affiliate itself with. Beyond selling soda, Coca-Cola, with the aid of packaging translation services, integrated Chinese cultural elements into its packaging. They included images of popular Chinese celebrities, traditional cultural symbols, and significant events, thereby creating a stronger brand connection with consumers. Chinese customers were able to develop a relationship with the brand because of that level of familiarity. Coca-Cola’s thorough research and careful planning in their localization strategy have enabled them to effectively communicate with and connect to the Chinese market through professionally translated product presentations.

Customizing Customer Experience:

By adapting product packaging and marketing strategies to local tastes and affordability, businesses can enhance customer experience.

Another big brand that excelled at this was McDonald’s. Across the world, McDonald’s focuses on customizing their menu to align with local tastes. For instance, recognizing the high vegetarian population in India, they introduced vegetarian options like the McAloo Tikki burger. Similarly, in Japan, they offer the Teriyaki McBurger, catering to the local palate. Beyond menu adaptations, McDonald’s demonstrates a keen awareness of cultural sensitivities. In Middle Eastern countries, for example, they ensure that all their meat products meet Halal standards.

Moreover, McDonald’s actively participates in community events and sponsors local activities – so they don’t just reach out to customers in different time zones, they integrate themselves fully into the lives of their customers. They go through incredible lengths to understand the lifestyles, wants, and needs of each customer, and this helps them enhance customer experience and foster a strong, loyal customer base.

Fostering Cultural Respect:

Contextually appropriate marketing, sensitive to local cultural patterns and norms, builds respect and a deeper connection with the audience.

Unilever’s Dove line did really well here. Its global “Campaign for Real Beauty” went through localization in order to appeal to a Middle Eastern customer base. The campaign challenged traditional beauty standards by promoting natural and diverse beauty ideals, which aligned perfectly with the region’s growing consciousness against unrealistic beauty norms. Unilever was careful to align its marketing campaigns with local values of modesty, and focused more on narratives of inner beauty and confidence. It also developed educational initiatives in the region to boost self-esteem among women and girls, to enforce its commitment to being a socially responsible and inclusive brand.

Enhancing Brand Identification:

Localization helps brands resonate with local culture, thus becoming an integral part of it.

Localization is a powerful strategy that allows brands to deeply resonate with local cultures, often making them an integral part of the community. A classic example is Starbucks. In China, Starbucks not only introduced tea-based beverages to cater to local preferences but also designed their stores with elements of Chinese architecture and decor, creating a culturally relevant and inviting atmosphere. In Italy, a country with a strong coffee culture, Starbucks opened its first store in Milan with a respectful nod to Italian espresso traditions, offering a more immersive and experiential coffee shop that blends with the local café culture.

Accelerating Local Business Development:

Understanding and addressing the specific needs of local markets fosters business growth. Uniqlo, a Japanese brand, did this perfectly when it moved to the US.

Americans, genetically larger in size than the smaller Japanese people, were a challenge for the brand, so it was essential to adapt localization best practices in order to penetrate the market and build trust among its Western demographic. By understanding the American consumer landscape, Uniqlo adapted its product sizes to cater to the American preference for roomier clothing, crucial for overcoming initial perceptions of their clothes being too small. Their marketing strategy in the U.S. shifted to emphasize the quality and value of their products, aligning with American consumers’ preferences for practical and durable clothing. In terms of retail experience, Uniqlo opened flagship stores in major cities like New York and San Francisco, tailoring the in-store experience to be more spacious and customer-focused, matching American shopping habits. They also engaged in collaborations with American designers and celebrities, raising their profile and appealing to a wider U.S. audience. Additionally, Uniqlo’s community engagement initiatives, like local charity events, helped build a positive brand image and establish a deeper connection with the communities they operate in. These localization efforts were instrumental in overcoming initial challenges and establishing Uniqlo as a popular clothing brand in the U.S., enhancing their market share and global brand presence.

Incidentally, here’s the bottom line of localization.

In case it hasn’t sunk in yet, one huge key to successful localization is cultural respect. Isn’t that nice? It just goes to show, localization moves beyond business strategy and adapting payment methods and e-commerce stores; it involves understanding local customers very, very well, and respecting their lifestyles, value systems, and beliefs – almost to the point of loving them!

Challenges and Disadvantages of ECommerce Localization: 

High Costs:

The financial burden of translation and adaptation can be significant. Take for example the automobile industry. Car manufacturers like Toyota and BMW face considerable expenses when adapting their vehicles to different markets. This adaptation includes not only translation costs for manuals and interfaces but also significant engineering changes to comply with local safety and environmental regulations. It’s as simple as changing the steering wheel location to suit England vs. the USA, to the strict emission standards in the EU (necessitating modifications in engines and exhaust systems), to making sure the software and navigation systems are compatible with the local mapping and traffic information services. These adaptations, while costly, are critical for these companies to operate in various international markets.

Side note: this actually doesn’t apply to your eCommerce listing. Did you know that the cost of localizing one listing is much less than professional photography? If you want to go about localization on your own, it can definitely be pricey, especially if you do it well; you’d start with market research, then employ local native speakers to translate and transcreate your listings, maybe even to help with website localization, and even a graphic artist to redo any images. Thankfully, YLT Translations already has native speakers that are familiar with the different marketplaces that Amazon sellers usually localize to – and we understand the customers, too – so we’re able to localize materials at a fraction of the cost you’d normally spend if you went about it solo.

Navigating Local Regulations:

Adapting to diverse regional laws and regulations presents a complex challenge. One of the most significant recent examples of legal adaptation is the introduction of the General Data Protection Regulation (GDPR) in the European Union. Tech companies like Google had to undergo substantial changes to comply with these new data protection and privacy laws. This involved modifying their data handling practices, updating privacy policies, and ensuring that their services were fully compliant with the stringent EU standards. Non-compliance with GDPR carries hefty fines, demonstrating the high stakes involved in legal localization.

Cultural Misunderstandings:

There is always a risk of misinterpretation or cultural insensitivity – yes, even if you localize – especially if you don’t use a native speaker as part of the localization team. Ford expanded to Belgium with the tagline “every car has a high-quality body” – which was translated erroneously to mean “every car has a high-quality corpse.” This morbid misinterpretation didn’t sit well with the Belgians, at all.

Translation errors like this often happen when there is an over-reliance on direct translation or when the translators are not sufficiently familiar with the subtleties and colloquialisms of the target language. It might also occur if the translation process lacked adequate review and validation by native speakers or cultural experts.

Management Complexity:

Managing operations across multiple markets adds layers of complexity. A large part of localizing your e-Commerce efforts is to make sure you go past listing optimization, and consider all the other parts of your business, as well. We’re talking about payment methods, social media localization, website localization, and even customer service.

For example, did you know that Mexicans rely on cash to pay more than credit cards? As of 2022, it has an unbanked population of 63%. Amazon Mexico is growing leaps and bounds – but any seller seeking to expand to Mexico needs to consider that the purchases may be paid for once the customer has received the item at their doorstep. India is another one; only 3% of the population are credit card owners. Even though Amazon India is another growing force in Amazon’s worldwide marketplaces, cash on delivery has to be an option if you plan to stay ahead of the competition in these emerging marketplaces – which have incredible potential, but undeniable management complexity.

Local Perceptions:

Foreign businesses may face resistance or negative perceptions in local markets. Take, for example, Walmart’s experience in Germany, which highlights the pitfalls of insufficient localization. The retail giant acquired several local chains in 1998, but struggled to gain a foothold, eventually closing up shop in 2006 and selling its stores to a German competitor. It faced many challenges, including cultural misunderstandings; Walmart adapted American-style customer service, which included things like bagging customers’ groceries and employing greeters at the entrance. Germans didn’t respond well to this; the friendly, overtly helpful approach was perceived as intrusive by some German customers. Also, although Walmart offered low prices, Germany already has many discount local chains that offer competitive prices. Walmart’s low prices were perceived as an effort at cannibalizing local players, which didn’t sit well with the German market at all. It turned out that local players were more attune to the German customer’s expectations, preferences, and value systems – proof and parcel of how crucial expert and professional localization is for your business.

Why is Localization Important for an E-Commerce Business?

For Amazon sellers, localization means more than just translating product listings. It involves understanding local consumer behavior, adapting to purchasing power, and using language and cultural nuances effectively in product descriptions. This approach not only boosts sales but also builds brand loyalty and customer satisfaction.

Consider the below:

• Reaching a Global Audience: E-commerce platforms enable sellers to reach a vast and diverse global audience. However, a mere translation of product descriptions isn’t enough to establish a connection with overseas customers. Effective localization is key to building brand trust, crucial for expanding businesses internationally​​. You need localization to boost conversion rates in multiple languages.
• Cultural Sensitivity and Appeal: The success of a product in one market doesn’t guarantee its success in another. This is where understanding cultural nuances comes into play. For example, L’Oréal’s expansion to Southeast Asian countries involved establishing a halal-certified facility in Indonesia, recognizing the cultural and religious needs of the region. This kind of cultural sensitivity can significantly impact a product’s appeal in different markets​​. Now, that kind of localized marketing doesn’t just apply to the big players; even e-Commerce sellers expanding products of services worldwide can follow the example these big companies have set.
• Creating a Familiar Shopping Experience: Localization goes beyond translation; it’s about creating a shopping experience that feels familiar and trustworthy to the customer. This includes localizing images, descriptions, and user reviews to ensure that the product feels like it belongs to the local market, even if it’s shipped from afar. This sense of familiarity can enhance trust and customer satisfaction​​. Remember the mistake of Walmart? Learn from those and make sure you fashion your eCommerce business so it feels familiar to your new customers.
• Competitive Edge: In the crowded e-commerce marketplace, localization can provide a significant competitive edge. Products that are relatable and resonate with the local culture and preferences are more likely to attract customers. Businesses that understand this are better positioned to build trust and drive sales​​.
• Investment with Returns: While localization might seem like an added expense, it’s an investment that can yield substantial returns. Properly localized products are more visible in Amazon’s search algorithms, often receive better reviews, and achieve higher rankings. Over time, this can lead to increased sales, repeat purchases, and organic word-of-mouth recommendations in new markets​​.

How Accurate Keyword Research Can Facilitate Business Growth

You know the rule – if customers don’t know you exist, they can’t buy from you. Translating keywords from one language to the other just won’t cut it. You have to localize those keywords through new keyword research in every market you sell in. Customers worldwide call products different things, so naturally, the keywords would be different.

If you ever catch Jana at a conference, ask her about the customer that accidentally translated keywords directly from the USA to the UK. You’d think that both English-speaking markets would employ the same keywords, right? Unfortunately, the customer selling diapers for babies in the USA wound up selling adult diapers in the UK – because baby diapers were called nappies! Can you imagine the repercussions for your business if you made the same mistake!

For more information on the importance of keyword localization and SEO, check out our blog!

Don’t Forget to Translate Your ECommerce Website and Global Marketing

Here’s a footnote: so much of Amazon traffic now comes from external marketing sources. You don’t have to put up a new website in every country you expand to; there are way to translate (or, rather, localize) your off-Amazon marketing so it resonates with your customers in every country. Think about localizing social media and your website to boost traffic to your site by providing country-neutral marketing efforts – and don’t forget about customer service either, which differs from country to country.

Conclusion: Translation Just Won’t Cut It; Localize SEO, Marketing Efforts, and Listings by Understanding the Localization Process and What It Can Do For You

In conclusion, eCommerce localization is much more than mere translation. It’s about strategically adapting your Amazon listings, SEO, and marketing efforts to resonate with diverse global audiences. As an Amazon seller, embracing localization means understanding and respecting the unique cultural nuances, purchasing behaviors, and language specificities of each target market. The examples of global giants like Coca-Cola, McDonald’s, and Unilever illustrate the profound impact of a well-executed localization strategy. They didn’t just translate; they tailored their approach to fit seamlessly into the fabric of each local market, enhancing brand identity and customer loyalty.

However, localization isn’t without its challenges. It requires a thoughtful balance of cultural sensitivity, legal compliance, and market understanding. The pitfalls of companies like Walmart in Germany and Ford in Belgium serve as reminders that even minor oversights in localization can lead to significant setbacks. Yet, the rewards of successful localization – increased market share, stronger brand presence, and deeper customer connections – far outweigh the complexities.

Remember, localization is an investment in your business’s global future. With the right approach, you can transform your Amazon store into a culturally resonant and globally appealing brand. So, take the leap, understand the intricacies of localization, and let your products speak the language of your customers, wherever they may be. At YLT Translations, we’re committed to guiding you through this journey, ensuring your Amazon business thrives in the global marketplace.

Did you enjoy that article? You might also enjoy this article on the common mistakes Amazon sellers make when expanding their Amazon business internationally.