Following the basic steps of market analysis, you can take the following steps when analysing your potential foreign market using the online tools and techniques:
1) Identify trends, lifecycle and market size
â˘ Trends on the arts & crafts market can be analysed using Google Trends - an online tool providing analysis of interests in topics using Google search data. Put simple, it shows you how often a particular search-term is entered. If the trend of interest in your product is constantly declining on the explored foreign market, it is a warning signal. In addition to long-term trend, you can also look at the annual cycles. For example, search for âhandmadeâ shows a gradually increasing trend, and it peaks every year in November and December. Moreover, this tool enables you to define country you are interested in, time period, category, type of search (web, picture etc.), so you can get pretty relevant results for your target country.
â˘ You should be also interested whether a product you are planning to sell on the foreign market is selling well. There are several options to find it out. First, go to online marketplace and search for the product through product categories directory or fulltext search. Look at the results and try to find an information (if available) on volume of sales (e.g. seller ranking, number of items sold by the seller). If such information is not available, you can get some estimates from number of reviews provided by customers. If there is enough hype around the product, it might be a good chance for you.
â˘ Of course, you should be interested in the price level for your product on the foreign market. Here you need to review online marketplaces (both local and international) to discover the actual price level.
â˘ Another insights can be extracted from the content of customer reviews. Go through the reviews to find out what are customers happy with regarding the product, shipping and packaging, communication with sellers etc.
â˘ Finally, information on trends and development in arts & crafts sector or particular product category can be obtained from articles on specialized websites or on online marketplaces, as well as from other resources found through internet search.
â˘ Information on market size can be obtained mainly from statistical data available on Eurostat or national statistical offices. To find out your total market, in the first round, use this data to estimate the size of your target group according to demographic criteria that you define (age, income, rural/urban etc.) after understanding your customers (see step 2 below). In the second step, try to narrow this set down using information from other resources (e.g. Consumer Barometer to discover online behaviour and habits) or found through internet search.
â˘ To find out your serviceable market, try to find out visits statistics for online marketplaces that you plan to use as your channels on the foreign market. If possible, confront this with demographic and behavioural profile of your customer.
2) Understand your customers
â˘ Even if you will be happy to serve anyone interested in your product, not everyone is your typical customer. Each product especially attracts one or several customer segments. To better adjust your offer to these in order to boost your sales, use online tools and resources to understand demographic and behavioural attributes of your segment.
â˘ First, look at your typical customer from demographic perspective. Who usually buys products that you plan to sell? Consider gender, age, income category. Try to find these information from customer reviews on similar products (you will identify them in your competition analysis) at online marketplaces, social media (using e.g. Social Mention - a real time social media search and analysis tool) or from discussion forums or internet search results.
â˘ Second, behavioural analysis aims to discover reasons why customers choose to buy a product instead of the other alternatives, their interests and buying habits. To discover these, try to use âCustomer Journey to Online Purchaseâ and âConsumer Barometerâ provided by Google. Also, look into customer review and try to look for common patterns in customersâ behaviour. Finally, try the internet search to look for articles on buying habits on your taget market. Look at resources coming from the target foreign country, but also from your home country, as some of arts & crafts makers might have shared their experience on discussion forums.
3) Look at your competitors
â˘ Before you decide to enter the foreign market, you should take some effort to map your competition. Start with looking at the same channels that you plan to use (e.g. particular online marketplace) as these are the places where you will face your competition in front of your customers. However, also try to review other online marketplaces (e.g. local marketplaces that do not allow selling from abroad) to obtain a comprehensive picture.
â˘ You can identify your competitors using product category search or keyword search. You should use several most relevant keywords. Try to put yourself into your customerâs shoes - what keywords may he/she use when looking for your product? Also, try the search with keywords translated to local language (if you donât speak it, use Google Translate). Executing a comprehensive analysis of search results is usually not necessary - looking at first or second page should be enough. However, look at sorting of search results, as you may rather want most popular instead of most recent results.
â˘ Do not forget that in addition to direct competitors you also have indirect competitors. Do not forget to look at them during your mapping. Look at similar product categories or search results for products similar but not same as yours.
â˘ The next step after you identify your competitors is to analyse their offer. What products do they sell? What are their attributes in terms of style, design, quality, materials and techniques used etc. Also. Look at the online presentation of their products. Do they use quality pictures? Is the headline catchy? Are the products described in an attractive way? If the offers of competitors on the first pages are poorly presented, it is a good chance for you. Also, have a look at customer references. Are there many feedbacks? What proportion of them is positive/negative?
4) Consider barriers to entry
â˘ Look at official EU websites (e.g. http://europa.eu/youreurope/) and websites of national/local governments, ministries or trade agencies to discover whether there are any legal barriers.
â˘ If you consider using an online marketplace as your channel, check the requirements and rules related to eligibility for selling, payments, shipment etc. for legal entry barriers.
â˘ Analyse the level of language barrier. Do local online marketplaces have English language mutation, or are they available in local language only? To what extent do people in the foreign country speak English or any international language?
â˘ Find out what are the shipping options and costs. Use internet search to look for companies that can deliver your product to target country (mail service, specialized shipping companies, etc.) After including these, can you still offer a competitive price for your product?
â˘ Finally, try to find whether customers on the online marketplaces you aim to use accept foreign sellers. Try to find foreign sellers (ideally coming from your country) on that marketplace and look at their sales figures and received reviews.
5) Look at regulations
â˘ There are several ways you can find useful information on regulations related to entering the particular foreign market:
o Official EU websites (e.g. http://europa.eu/youreurope/) and websites of national/local governments, ministries or trade agencies provide official and updated information on regulations related with doing business in particular country. EU resources are usually available in all EU languages, while national resources usually provide information in local language and in English.
o Google search - internet search can direct you, besides above mentioned official websites, to other resources that may provide comprehensive information in user friendly form. As always with internet resources, make sure you are referring to up-to-date information.
o Online marketplace regulations - besides legal regulations, online marketplaces also have their regulations that you need to comply. You can usually find them in Terms of service or FAQs sections.
o Experience in coping with the regulations when selling abroad is sometimes shared among arts & crafts makers themselves. Make sure to review discussion groups / forums by your peers on local websites or international online marketplaces.