CASE STUDY 4. 1 – The implications of globalisation for consumer attitudes With the strong development of the globalisation trend nowadays, many companies have invested a lot of money into expanding their e-commerce network to other countries. Along with the expansion is the issue of localisation to penetrate those countries’ markets. When a company opens an e-commerce website in another country, the ultimate goal is to increase sales and profits, meaning seeking to achieve high purchase amount from customers.
According to Nitish et al (2006), a low purchase intent is the result of the lack of cultural adaptation, also, the case study indicates that customers from different countries are very differentiated in terms of needs and wants, and even the basic similarities that they have can be quite different as well (an example from the case study is “family”, it’s a common similarity of all the customers in the world, but deep down, the definition of “family” can be quite distinct from one region to another).
Hence, a deep analysis of the cultures of the countries where the e-commerce is operated is essential to the success of that company in those countries. In other words, the localisation of the e-commerce can help the organisation penetrate the markets and understand customers’ cultures in order to be able to offer the products and services matching their needs and wants. Besides the benefit of increasing purchase, localisation also helps build relationship with customers. Loyalty is one of the essential things to make a company sustainable and achieve long-term development.
With all the information translated to the local language and providing local staff to contact and serve the customers, the business will become easier to do and more appreciated by the customers. The higher the level of localisation, the higher the level of customer satisfaction and hence the more successful the company will be. HSBC is a significant example of successfully localised organisation with their famous slogan “The World’s Local Bank”, they provide about 80 customized/translated websites for the 80 countries that they operate in (HSBC 2013). Localization brings success to companies, however, carries many challenges.
Firstly, as the companies need to tailor ecommerce services for individual countries or regions, different kinds of cost such as research and development cost, set-up cost, human resources costs are created, hence, the total cost is increased. For example, a country-specific website (www. dell. com, for example) not only requires language translation, but also related time, date, postcode or currency format, etc. The company, therefore, has to spend money on setting up a translation team, researching team or administration team who will take care of a specific country.
Another example is that when setting up a culturally customized website, as the content of website needs to fit with specific cultures, money spent on research and development significant increases, especially when an enterprise has to hire a specialist company, for example Web certain, to manage all the content localization issues (Chaffey, D 2009). Local preferences are significant, leading to a big amount of cost involved. The more customized website, the more cost the company has to carry. Deciding which degree of localization to follow, therefore, places a burden on managers.
In our opinion, the advantages and benefits that the localisation brings to the company can exceed the downsides that it has. A company has to take the risks in order to be successful. Reference Chaffey, D 2009, E-Business and E-Commerce management, 4thedn, Pearson Education. HSBC 2013, ‘Country Contacts’, < http://www. hsbc. com/about-hsbc/structure-and-network/country-contacts#link> Nitish, S et al 2006, ‘A cross-cultural analysis of German, Chinese and Idian consumers’ perception of web site adaption’, Journal of Consumer Behaviour.