In our second Q&A on expanding overseas, MD Ann-Maree Morrison reveals how she took her ecommerce business, Labels4Kids, into new markets worldwide.
Ann-Maree Morrison is the managing director and founder of Labels4Kids, a Scotland-based ecommerce business making children’s clothing labels that sell regularly around the world, from China to Saudi Arabia.
We asked her about her company's international expansion strategies, as well as the challenges of being an online-only business and selling overseas without a physical presence in the territory.
When did your company begin selling overseas?
We started getting international orders in our very first year of operating, with many more coming in our second year. Initially they were from Europe, but very quickly they came from Australia and the US, and even Russia. It was then we realised how much overseas demand there was.
Did you always intend to expand internationally?
Yes, but at first our focus didn’t go beyond Europe. I’d never owned a business before and wasn’t an ecommerce expert, so I didn’t know if it would work. But I knew there was demand for our offering and a gap in the market.
After about four years, when the business started to take off, we began thinking about launching websites in different languages for other markets and targeted France, Germany and Sweden as places to expand into.
Having a physical presence in our overseas markets has always been a challenge. We ended up with a bit of a mess, because we then had four sites running off four separate databases, but things became easier once we were running off one system. Now Germany, Sweden and France are our largest and fastest-growing overseas markets.
Has your international growth been limited by being an online-only business?
Having a physical presence in our overseas markets has always been a challenge. Ideally, as an ecommerce business, we’d set up warehouses overseas to offer same or next day delivery in those markets. But the personalised nature of our products means that all our distribution currently has to come from the UK.
It would also be incredibly costly to set up in another country. Many people assume that ecommerce businesses don’t require repeat investments, but that’s absolutely not the case. Ecommerce requires on-going investment to ensure your site stays top of search engine results, or remains easier to navigate than your competitor’s site.
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How might you establish a physical presence abroad?
We’ve considered franchising on the basis that it’s a good way to launch in a market without the cost of opening an office. But unfortunately we’ve never found the right partner. Agreeing to franchise your business actually comes down to personalities. You need to have complete trust in the person you’re handing your brand over to.
What other challenges do you face to expand internationally?
The current economic uncertainty, particularly around Brexit and, because we’re Scotland-based, the implications of Scotland’s potential independence. It’s a challenging environment. In future we’d like to open an office overseas, but at the moment it’d be too big a risk. We’re better off growing the business in the UK and continuing to sell to overseas customers, for now.
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