I’m Lovin’ It: Going Global by Going Local

The end of standardization has been realized for many years now, and it is even more apparent today as companies compete to break into international markets.  We are seeing this with ecommerce companies, sharing services, fashion houses, pharmaceutical companies and a host of other businesses.  Achieving international market growth is not easy and involves constant development of product, brand and distribution strategy as well as awareness of the government’s role in the country and the country’s policies and plans.

By evaluating McDonald’s we can learn effective strategies on how to “think global, act local”.  Over the years, McDonald’s has continued to innovate its menu and adapt its go-to market system, allowing it to maintain its leading global presence, retain its customers and uphold its reputation as the “Golden Arches”.  Many companies are able to break into a new country or environment quickly but fail to tailor their products and services to the needs and demands of its local customers.  Localization must be applied at every level of the business to achieve successful international market growth.

A comparison of the different McDonald’s website by country shows us the importance of brand consistency, language, design and variation of product offerings to accommodate local market conditions.

United States

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China

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France

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Japan

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Most noticeable is the use of color to develop brand recognition and connect with local customers.  The golden arches are displayed in the upper left corner of each of its websites and yellow is a commonly used color across all the sites.  However, notice the McDonald’s French and German websites have replaced the iconic red background with green.  This color change in 2009 was intended to aggressively communicate a more eco-friendly image to help the company connect with a pro “green” customer base in Europe.  In this instance, color was a driver to reflect shared values between the business and its customers, suggesting that the original red and yellow logo colors were not well received in Europe and some separation from the U.S. home company image was necessary.

At a NYC Hacker Growth Event I attended last November, a former LinkedIn employee shared his experiences with launching LinkedIn abroad and how they came across the language factor.  They found that using the local language (initially launched in English) on the website for that country led to increased engagement.  Yes, this sounds obvious but many companies have failed to do this and just think how challenging it will be for young companies with blogs to accurately translate their posts across their different websites (God forbid a grammatically incorrect and Babblefish translation!).

Language is the medium of culture, allowing a group of individuals to share their knowledge, beliefs, values, attitudes, politics and religion.  And because culture is largely tied to identity and influences our interactions (human-human and human-product interaction), decision-making and interests, language is key when building brand equity abroad.  As my best friend Erica Baba beautifully summarized:

“If we look at culture on an individual basis, we can see the impact of one’s cultural ideologies and values on the way one lives and carries himself or herself.  Everywhere we go, we bring with us our culture.  You see, there are things we all choose to do or ways we choose to be because of the cultures we identify with and what they mean to us.”

Allowing an individual to visit a website in his or her own language gives the individual a sense of ownership of the site (most basic form of personalization), allows the individual to easily navigate the pages and explore features, and adds content to the products offered.  As a result, the individual is more likely to return and a community is more easily formed, which is crucial for marketplaces as they expand abroad.

Beyond cross-cultural design and language, and equally as important, are localized products, services and payment options.  Product adaptation and innovation enhance a company’s product offerings because it is tailored to local preferences and culture.  For example, McDonald’s in India does not have beef or pork on its menu (a friend of mine found this out when trying to order a beef burger there…).  And did you know that once a year in China, McDonald’s offers the Prosperity Burger in celebration of Chinese New Year?  McDonald’s has also recently launched a new “rice based” menu in China this past year and The McCamembert, a burger with the French Camembert cheese, in France.  The geographic variations to its menus demonstrate McDonald’s sensitivity and adaptability to local cultures and preferences.

The McCamembert burger from McDonald's. mcdonalds-new-rice-based-menu-for-china mcdonalds-mcarabia-egypt-1 McD taro pie

Check out a few more menu options outside the U.S. here.

Product inventions aren’t always successes (Some of the stuff Taco Bell has introduced is total crap!) but more often than not they resonate with the local consumer.  Product variations should also account for demographics, infrastructure and local trends (e.g. the international car market is particularly sensitive to age group, lifestyle and roads when designing and selling cars to a region).

In addition to menu innovation, McDonald’s has also continued to reinvent its space.  The McCafe was introduced in Europe to adopt the European café lifestyle, capitalize on the growing coffee trend at the time and offer customers a new breakfast option.  And just this past November, Starbucks introduced a new store concept in its Beijing store that was inspired by China’s one-child policy atmosphere and aimed to create a hub for the number of young people near the location.

From the product and service to the product packaging to the company website, the brand is continuously being built and communicated.  The consumers’ knowledge, impression and experience with the product or service will determine the viability and sustainability of the business.

Localized payment methods can best be examined with Flipkart, India’s first billion-dollar internet startup, and Amazon.  Both Flipkart and Amazon offer Cash on Delivery (COD)—the individual pays for the good upon delivery in cash.  According to an article from May 2013, there are less than 20 million credit cards in circulation in India, representing a penetration rate of about 1.7% among the country’s 1.2 billion population.  Additionally, approximately 70% of Flipkart’s transactions are currently completed using COD.  This phenomenon is largely tied to Indian culture, which maintains a leery attitude towards non-cash transactions because of its intangible nature (the physical exchange of cash or gold is symbolic in Indian culture) and perceived lack of security and transparency.  I believe the following excerpt from a research paper titled “Facilitating Global E-Commerce: A Comparison of Consumers’ Willingness to Disclose Personal Information Online in the U.S. and in India” also helps explain some of the resistance to credit adoption:

 “In India, because of its collectivistic culture, consumers may be more willing to extend and preserve their relationship with an organization because it is seen as part of an extended community… Consequently, their desire to maintain the relationship is realized through sharing of personal information.”

Flipkart achieved fast adoption and significant growth in India because it offered services and payment methods that revolved around India’s transaction preferences.  In one year, the company increased its customer base by more than ten times from 0.2 million to 2.08 million as well as increased its website visits from 40 million to 102 million.  Amazon was quick to observe this and prepared to tap the attractive Indian ecommerce market, and since launching Amazon.in, it is also offering COD (although COD is currently only available for Amazon fulfilled products).  Despite COD being the more expensive payment method for the company, Amazon is offering this payment option because it realizes user acquisition would not be possible without adapting to local methods of transaction in India.

Finally, awareness of the local government and legal regulations is extremely necessary as a company looks to expand beyond its domestic borders.  There is significant operating risk from a government that is unsupportive of foreign businesses and that highly regulates marketing activities and distribution channels.  Such is the case in India and China, in which the government becomes a priority customer to the firm.

Of course, this is easier said than done and it will take time.  Localization will require not only an immense amount of research and capital at entry, but also throughout the existence of the business abroad as trends, values, beliefs, attitudes, politics, etc. in a country are ever-evolving.  Remember, quick growth is not always good growth.

globalization

Like Prada, Repin Prada then Shop Prada

Recently, a number of online retail businesses have emerged to compete with the pioneers of the industry (i.e. Vente-privee, Gilt Groupe, Ideeli, Etsy, Hautelook,…).  A few of the new players in the past three years include Fab.com, One Kings Lane, Bonobos, lyst, shoptique, Vaunte, styloko, Nuji and Joss & Main.  As a result of the exploding online retail space, my time online has increased, I shop more and I receive more budget alerts from Mint.com.

I typically browse these sites when I’m bored or when I am desperately looking for something at a discount.  Recently, I’ve developed an obsession with afternoon tea and have been diligently scanning website after website for a steal on tiered cake stands…But I don’t spend time on these websites the way I do with Facebook or Pinterest, and I’m not engaged in discussion or sharing with my friends what trendy items I’ve just purchased, suggesting that online shopping is not a social activity for me.  I believe there is a disconnect between the bloggers/pinners, retailers and customers.

I believe the ideal online shopping experience can be created through a combination of features from Pinterest, Vaunte and Amazon.  I’d like to be able to shop the products in the photos that I’ve collected in my photo collages at bargain prices (or even have the option to buy them at retail price) and share my purchases with my friends or followers.  Currently, people repinning or liking a photo on pinterest or instagram does not translate into a purchase (most pins are taken from another blog and have no source), and people frequently respond to posts with “where can I get that???” (See the below pictures for examples).

Where can I get this??? Where can I get this??? Where can I get this???

I’ve also included Vaunte in the combo because I like that the company has blended editorial content with an ecommerce platform.  Just as you would browse through a fashion magazine for amazing steals and celebrity outfits, you would be able to view these deals and trends via the featured celebrity’s closet on Vaunte.  And moreover, you are able to shop the celebrities’ closets.  Vaunte bridges the gap between identifying a favorite fashion piece on a celebrity or in a magazine and being able to purchase it.

Finally, I would like to be able to compare the price and quality (used or new) of my favorite handbag across multiple sites like that on Amazon.  I believe price comparison helps convince buyers that they’ve found a great deal and eliminates the need to browse other sites, increasing customer retention and activity.  And of course, users should be able to share their purchases with their friends and followers so that others can also discover these fashion steals and purchase them.  I believe the integration of all these functionalities–follow, collect, share, compare, shop and then share again–would create a more sustainable revenue stream and establish the ultimate online retail platform.

This past week, Pinterest introduced price alerts or “Product Pins”, which is its first step to bridging the gap between pinning and shopping. But Amazon Collections has taken it one step further by allowing individuals to be able to “collect” or “like” and immediately shop the product from multiple sellers.  However, Amazon Collections lacks the social network experience, in which I am able to connect with my friends over an item or purchase, view others’ purchases or follow a hashtagged category such as #AfternoonTea (Amazon Collections has limited categories for browsing).  Additionally, Amazon Collections looks more like an online outlet, which is not very engaging for the user.

Amazon Collections

I’m excited to see what these online retail businesses will look like in the next few months!

Share with me your thoughts @tiffanydstone or comment below!