As a Filipino business owner, your dream of expanding internationally might be a little difficult.

Even if you had the will and resources, where would you start?

This article will discuss two key concepts about expanding: internationalization and globalization. We will teach you how to establish your business beyond national borders and point you to the first step toward achieving your dream.

By learning the difference between internationalization vs. globalization, you will be equipped with clarity and direction of the best strategies for starting your international success. Read more below to fully grasp internationalization and globalization and understand why they are important for your expanding business.

Internationalization vs. globalization In e-commerce

Understanding the Concepts of Internationalization and Globalization

Internationalization and globalization are two different concepts, yet they are often confused. Both concepts deal with the international aspects of businesses and economics but focus on more distinct aspects.

The difference between globalization and internationalization lies in its focus and scope.

Here are three key differences of the two:

  • Scope: Globalization encompasses the entire interconnected world, so it is broad, while internationalization refers to the expansion of one specific company or product into other countries.
  • Focus: Globalization focuses on the overall interconnectedness and global integration of economies. Internationalization is a business strategy focusing on making products or services that can expand into international markets.
  • Action vs. results: Internationalization is a set of actions a business or company takes, and the result of these actions is globalization.

SMEs have a significant role in the Philippine economy, and producing export revenues can be a strategic move for business growth. We’ll look further into details about internationalization and globalization to better understand the two concepts.

We're open sign on store

Internationalization In e-Commerce

Internationalization in e-commerce is a prevalent trend today. As the world seemingly becomes smaller, there’s a growing desire to eliminate national borders and reach more business opportunities abroad. Expanding to other countries is a way of internationalizing your operations.

Digital platforms and the Internet make all of these possible. Learn all the key points of this concept below.

Definition and Scope

Internationalization is the process of expanding something beyond its domestic market. Thus, internationalization is a strategy for expanding into international markets. It includes modifying products to conform to the cultural needs of different national markets.

Also, it is the process of preparing an online business to serve customers outside national boundaries. Preparing your website to handle different languages and handling increased traffic are all part of internationalization in e-commerce.

Tailoring the User Experience for International Markets

Tailoring the user experience from different cultures and backgrounds for international markets is necessary for internationalization. It is an investment that will help you build relationships and trust with international customers.

There are three key steps for you to do in this aspect:

  • Language localization: Your message should resonate with your target audience on a cultural level. Do not rely on literal translations. Having expert native speakers proofread and ensure its accuracy is the best way to go. Another option would be to consider using website translation software to localize your websites.
  • Currency and payment options: Integrate popular local payment methods. Display prices and accept payment in multiple currencies. This will allow your international customers a smooth checkout experience.
  • Cultural adaptation: Understanding their language and any cultural nuances is key. Adapt everything- from visuals to content to date formats- to resonate with your audience.

One clear sign that your efforts are paying off is when international customers leave positive reviews. You will see increased traffic on your website and, of course, increased sales. 

Investing in a poorly planned tailoring of user experience will only waste your resources. This will only cause a negative customer experience and damage your brand reputation.

Cross-border logistics map

Cross-Border Logistics and Shipping Considerations

International logistics is managing shipping your goods or products across international borders. This ensures that your customers’ orders are delivered to them.

Logistics is referred to as the backbone of international trade. Your online business won’t be possible without logistics. It allows raw materials to go to the factories and products to go to your customers’ homes.

There are three key concepts in cross-border logistics and shipping considerations:

  • Customs and duties: Understand Harmonized Systems (HS) codes, duty rates, Free Trade Agreements (FTAs), and Incoterms. These four are essential in understanding the customs and duties for exporting goods or products.
  • Shipping methods and carriers: Research international shipping methods and carriers available in the Philippines. Express shipping, expedited shipping, and standard shipping are available with different carriers. Factor in your customer’s needs and preferences when choosing the best shipping option.
  • International returns and customer support: Returning goods sure is a waste, but it happens. You need to consider the return shipping costs and decide who will pay the price. Be transparent about potential fees, and make sure your customer service representatives are active.

Your international ecommerce customers will gain a complete understanding of your shipping and return policy, which will significantly help set their expectations and avoid frustrations. Establishing a transparent process will avoid several problems that can damage customer satisfaction.

Legal and Regulatory Compliance

This refers to adhering to laws and regulations set forth by countries for cross-border transactions. When expanding internationally, you must comply with these laws and regulations.

Your compliance will ensure you operate ethically, securely, and according to international standards.

See more below:

  • International trade laws and regulations: These laws will govern the movement of your goods or products. Understanding these laws will overcome trade barriers and ensure a smooth transaction.
  • Data protection and privacy laws: With the increasing concern over online privacy, your business should ensure your customers are protected at all costs. You should be able to safeguard customer data and secure their privacy to foster trust.
  • Taxation and compliance requirements: Tax laws vary between foreign countries. You should handle this complexity to avoid tax evasion accusations and financial penalties.

Complying with international laws and regulations builds credibility and trust while enhancing your brand reputation globally. Failure to comply can result in hefty fines, loss of customer trust, and, in extreme cases, business closure.

Therefore, prioritizing legal and regulatory compliance is not just good practice but is an essential aspect of registering a business and developing it to achieve success on an international level.

Localization of Marketing and Advertising Efforts

Localizing marketing efforts means tailoring your marketing strategies in a way that will resonate with your target audience abroad. This is another crucial aspect of internationalization for your e-commerce business.

This personalized approach will ensure your brand message is effectively delivered. Marketing and advertising localization will engage the audience, maximize your reach, and boost revenue potential.

To localize your marketing efforts, follow these essential steps:

  • Localized SEO and keyword research: Understand the search habits and language used by your target local market. Doing this will help you optimize your website and content to appear in local search engine results.
  • Adapting marketing campaigns for target markets: Your marketing campaigns should catch the attention of your target audience. You can do this by translating your content into its literal meaning and applying your target audience’s cultural values and sensitivities. This is where expert local translators/marketers can help best.
  • Social media and influencer strategies: You can also amplify your visibility by partnering with local influencers and utilizing social media platforms. This can create an authentic connection between your brand and your target audience.

Implementing these localization strategies improves brand perception. Resonating with international audiences can be difficult, but when you successfully do this step, you can establish strong connections and competitive advantages in the global market.

On the other hand, an unsuccessful localization of marketing efforts creates miscommunication and disconnects with your target audience. Philippine businesses need to prioritize this to thrive in the competitive e-commerce landscape.

Globalization in e-commerce

Globalization In E-commerce

Globalization refers to the interconnectedness of markets and the breaking down of geographical barriers in online trade. It embraces the opportunities presented by a borderless digital economy.

Unlike internationalization, globalization is not related to a single company in the Philippines but is rather a global phenomenon. However, your business can implement globalization practices for its ultimate benefit. Let’s delve into this concept.

Definition and Concept

Globalization is a complex phenomenon that is thoroughly studied in the academe. But in its most basic sense, it is the interaction and integration among different countries’ people, companies, and governments.

This is driven by international trade, technology, and sometimes cultural exchange. In the context of e-commerce, globalization incorporates the expansion of businesses internationally, enabling the interconnection of the digital economy worldwide.

Expanding Market Reach and Targeting Global Customers

​​Market reach refers to the scope of your business’s ability to connect with and engage potential customers. Expanding your market reach involves addressing geographical areas, demographics, and communication channels.

Global customers, especially in today’s era, will bring many opportunities for your business. You can tap into revenue generation beyond local markets and capitalize on emerging trends and demands worldwide.

Here are three steps you can take to expand your market reach:

  • Identifying new market opportunities: Pinpoint areas with economic growth potential and unmet needs in regional and national markets.
  • Market research and analysis: Thorough market research and analysis are needed to understand the dynamics of international markets. Study cultural differences and consumer behavior to tailor your marketing strategies.
  • Competition and competitive advantage: Assess your competitors and identify areas where you can gain an advantage and excel.

A fruitful expansion of market reach will multiply revenue streams and enhance your company’s visibility and recognition. However, if you expand without a proper plan, you risk your business being overtaken by competitors.

Standardization of Products and Services

Standardizing your products and services means maintaining uniformity and consistency in your offerings across different markets. Your products and services should have the same quality, specifications, and features.

Consistent quality of products and services is equal to consistent customer experience on a global scale. Your business should also streamline internal operations and reduce costs.

The standardization of your products and services requires three steps to take:

  • Product adaptation vs. product standardization: You have the option to adapt products to suit local tastes. However, product standardization is usually more efficient and saves cost. So it is in your best judgment which of the two has the most benefit.
  • Consistency in branding and messaging: Maintaining consistent branding and messaging establishes a strong brand image within your target audience. Ensure that your branding elements are consistent in all of your content.
  • Localization vs. global branding strategies: A balanced strategy in localization and global branding is key to the effective standardization of products and services.

Standardizing your products and services for international markets is efficient and cost-effective. On the other hand, while consistent global branding is effective, localizing your products will resonate with local customers without deviating from the brand name and identity.

Building Scalable Infrastructure and Operations

Scalability is the ability to expand and grow your resources and processes, even if there are economic and social changes or, on larger scales, changes in the world economy. This process should be done without compromising efficiency or performance.

Filipino businesses must meet the needs of a growing customer base and stay resilient against the changes in the global economy. Baking scalability principles into the business enhances agility, improves global competitiveness, and makes businesses more globally integrated.

How do you build a scalable infrastructure?

Here are the key steps to do this:

  • Logistics and supply chain management: Streamlined logistics and supply chain management will ensure timely delivery of products to customers worldwide.
  • Multilingual customer support: Invest in customer service teams that are fluent in multiple languages to support customers who prefer to use their native language.
  • IT infrastructure and scalability: Investing in advanced information and communication technology and cybersecurity measures will provide seamless and protected integration as your business expands into new markets.

These steps will increase your business’s operational efficiency and flexibility as it grows. Your business will need a scalable infrastructure and operations to improve operational inefficiencies and customer experiences. However, it may also hinder effective competition in the global market.

Global Partnerships and Collaborations

When entering the global scene, you need to establish partnerships and collaborations. These are strategic alliances and cooperative relationships between businesses operating in different countries.

Developing countries such as the Philippines will need cooperation with other business entities to remain mutually beneficial to each other. With these partnerships and collaborations, You can access new technologies and resources.

Here are vital steps to build and collaborate:

  • Strategic alliances and joint ventures: Allying with foreign companies allows you to gain mutual benefit from each other’s strengths to pursue common objectives.
  • International distribution channels: Having access to new distribution channels will allow you to reach more customers and overcome logistical challenges.
  • Partnerships with local service providers: Collaborations with local service providers will help you navigate regulatory requirements. These local experts can let you gain specialized knowledge and resources while ensuring compliance with local regulations and standards.

Filipino businesses can expand their market reach and share their expertise by allying with international businesses. Without these international relations, you will only have limited knowledge of the economic system. This can limit your potential to compete with global competitors, and you may experience difficulties navigating foreign markets.

Final Thoughts

Internationalization and globalization are sometimes used the same. But they are quite different. 

This article tackled the internationalization processes and gave you a good primer for expanding your business beyond Philippine borders. It also tackled globalization, why it’s crucial to establish partnerships with other businesses, and more topics.

You learned everything you needed to know about the differences between globalization and internationalization. It is time to maximize your potential and consider expanding your business globally.

Frequently Asked Questions

What can affect globalization?

Many factors can affect globalization, including technological advancements, cultural exchange, and media influence. It is a complex and multifaceted process with interconnected factors. Businesses need to understand these to respond effectively to the opportunities and challenges related to globalization.

What is a free market?

A free market refers to an economic system in which the prices for goods and services depend on supply and demand without the intervention or regulation of the government or other external authorities. Businesses can buy and sell products and services based on their preferences, interests, and capabilities.

What role does the United Nations (UN) play in globalization?

The UN serves as a platform for addressing various economic, social, political, and environmental challenges beyond nocturnal borders. They promote shIt promotions in our globalized world. They have also and have the creation of other important international entities like the World Bank.