Expanding your online business to Germany and beyond

Do you want to grow your online business and expand it to new territories? According to a report from Bevh, the German E-Commerce and Distance Selling Trade Association, online shopping in Germany grew by 10.6% in Q3 2016, generating a total of 12.5 billion Euro. With a population of 81 million, Germany's size makes it an interesting yet complex market for foreign investors. If you are not currently selling in Germany, it might be a good idea to consider it.

Which platform to chose for global expansion?

Whether you want to sell in Germany or anywhere else, it is important to have an e-commerce platform that supports global expansion.

When entering new markets, it is important to customize and manage each market separately. For instance, you should focus on things such as domains, languages, design, product selection, pricing, exchange rates, tax rates, payment types and shipping methods. It is therefore a big plus if your e-commerce solution allows you to export files to price comparison services or external services such as market-specific distribution channels.

Most modern e-commerce platforms allow you to launch a "local" version of your online store with its own domain via a single dashboard. You will be able to see all your content translated into German and to chose the graphic design you prefer. At the same time, it is easy to create product variations and to manage prices based on the latest exchange rate. It is important that your e-commerce platform handles the local market tax rates as well as the different payment and delivery methods preferred by local consumers.

If the above is not supported by your exiting e-commerce platform, it is a good idea to talk to them about your options and their future roadmap.

If you are starting an online business, you should also keep those details in mind when choosing the right e-commerce platform. This will help you avoid having to change platform as you grow and expand internationally. AltaPay works with a wide range of e-commerce platform vendors. We offer full integration with these platforms so it's easy for you to start selling online, both locally and globally. If you need inspiration to choose the right e-commerce platform, please visit this page: https://altapay.com/partners/ecommerce-platforms.

Understanding your market

In addition to knowing the capabilities of your e-commerce platform, you should also understand the market you are about to enter. It's always good to start with an in-depth analysis of the competitors to get an overview of the market conditions.

Germans are less internationalized than people from a small country like Denmark. They are used to national businesses that understand them and their culture. For a foreign business to succeed in Germany, the ability to localize and customize their offer is key.

Practical information before entering the German market

Terms and Conditions and Privacy Policy
Up to 80% of Germans read the terms and conditions, so you should keep them updated on your website to show its validity. Likewise, Germans are very sensitive about personal data. For example, many Germans do not use their real name on social media and The German 'telemedie'-law gives the right to use nicknames or pseudonyms online.

Freight
Germans expect delivery times to be less than 48 hours and they expect it to be free.

They can come after you - and they do!
One of the most surprising things you might find about Germany is "Abmahnung", which is a "warning" usually containing a claim. In Germany, companies and individuals can freely raise an "Abmahnung" if laws and rules are not met. Some people even made a business out of it. Aside from the Consumer Ombudsman, your customers -and especially your competitors- will constantly check whether the rules are respected. For example, you will receive an "Abmahnung" if you do not show company information such as address or company registration number. We have also seen examples of websites that have received an "Abmahnung" for not displaying their "cookies policy".

Language
You might have studied German at school, but it does not mean you can translate into German. German consumers are extremely detail-orientated, so the wrong use of "them" and "you" can lose you a customer. We therefore highly recommend that you find a native German for any translation work.

Price pressure and portal solutions
Amazon, eBay, Zalando and 20 other retailers currently dominate the German e-commerce landscape. They do so through price transparency and there is therefore a high level of price pressure to win market share. Using Amazon Optimization should be just as prioritized as Search Engine Optimization.

Trust Marks
78% of all German online shops have a trust mark on their site. One of the major trust marks is Trusted shops, http://www.trustedshops.com with over 25,000 registered web shops.

How will customers pay in Germany?

Direct Banking / Sofortüberweisung / Invoice
Direct Banking / Sofortüberweisung accounts for over 40% of all online payment transactions in Germany. It is an Internet payment method that allows immediate receipt of money, and it is available in 10 different European countries. Market trends indicate that its use continues to increase.

Paypal
A wallet payment greatly simplifies the payment flow and is the second most used payment method in Germany. Paypal, for instance, is easy to setup and use for German consumers, which is why millions of them rely on this online payment method. It is by far the most popular wallet payment method in Germany as well as in many developed countries around the world.

Credit and debit cards
Roughly 25% of Germans still prefer to pay with a credit card. The German market offers a wide range of card payment options. Some of the most common ones are Visa, MasterCard and American Express. To pay online, customers enter their card number, expiration date and usually a CVV / CVC code on the web shop payment page.

Consumer payment preferences differ greatly from country to country and understanding them can be a complicated process. If you need help understanding payment preferences across different markets and/or need advice to formulate the best payment strategy based on the markets you sell to, our team of payment experts offers a free consultation. Contact our team now at sales@altapay.com.

Abuse prevention

Both physical and online stores experience fraud, which can be quite costly for your business. It is important that your payment gateway supports fraud prevention.
AltaPay works with a number of third party fraud prevention services to give businesses a higher safety and better protection against fraud.

3D Secure
To increase the security of online card payments, Visa, MasterCard and AMEX have devised an extra security step in the buying process. This extra step protects all parties from unauthorized use, which reduces the amount of fraud. However, 3D Secure is not common in all countries, and for instance it is significantly more widespread in Norway than in Denmark.

ACI ReD Shield®
ACI ReD Shield® is a real-time tool for fraud prevention. The solution is tailored to individual needs and usually more useful for large companies. The solution is delivered as a "Managed Service" where a team of experienced risk analysts is assigned. ReD Shield provides immediate decisions (accept / challenge / deny) on e-commerce and mobile commerce transactions.

Do you want to learn more about how payments can support your global expansion? Do you have questions about global expansion in general? We are happy to assist. Contact us at sales@altapay.com.