This post will focus on whether Magento handles entering foreign markets well. If so, what would the cost of launching your online store in an additional foreign market be?

What will you find in this article?

Is Magento suitable for expansion into foreign markets?
Why do companies want to enter foreign markets?
Which foreign markets do companies bet on?
How do you develop an online store in a foreign market?
How much does it cost to develop an online store in a foreign market?
At what stage of the project should we consider foreign markets?
Foreign markets on Magento – summary

Is Magento suitable for expansion into foreign markets?

Magento excels at entering foreign markets. Even in the extreme case where we want to enter a foreign market with a different currency, language, and forms of payment and delivery, we want to manage prices independently in each market. We want a different front-end (graphic design) for each foreign market (a different look and feel of the store) – Magento will handle it without a problem.

How much does it cost? Suppose you plan to enter a foreign market. In that case, it comes down to creating a language version (because, for example, you already have the foreign currency—you operate in the German market and want to enter the French market.

You have the EUR currency in both countries, so you need only an additional French language); the cost will be about 1.950 USD/EUR (configuring the appropriate Magento structure and production launch).

However, if entering the foreign market involves creating a new currency, customizing forms of payment and delivery, and making changes in the front end, the cost may increase to about 9.100 USD/EUR

Why do companies want to enter foreign markets?

Every second ecommerce director I talk to faces the challenge of expanding into foreign markets because the company sees this as an opportunity to scale the business quickly.

Especially in the current market situation, diversifying revenues into other foreign markets where the economic situation may be better seems a sensible solution.

Which foreign markets do companies bet on?

Of course, directions vary. Some talk about Scandinavia as their promised land, while others seek opportunities in the German, Austrian, or Swiss markets.

A group of entrepreneurs is also planning to enter the markets of Central and Eastern Europe, such as Romania, Hungary, Croatia, the Czech Republic, and Slovakia.

How do you develop an online store in a foreign market?

As you can see, strategies vary. The key question is: Can we enter a chosen foreign market and adapt our offer to its specifics? The answer is simple—of course, yes.

But what does this look like in practice? Let’s look at an extreme situation.

We have an ecommerce director who operates in the Swedish market, sells clothing, and is a manufacturer. He is considering entering foreign markets, choosing Germany as his promised land. But he encounters a problem—he is unsure how to do so with his current business model and has specific requirements.

He wonders if this is even possible to accomplish. His requirements are specific:

  • in Sweden, sales take place in SEK, but in Germany, he would like to sell in EUR
  • the website should be available in German
  • In the German market, there should be delivery and payment methods available that are not available in the Swedish market
  • a complication is that part of the offer available in the Swedish market should not be available in the German market
  • the front-end should be entirely new for the German market
  • a new front-end doesn’t mean minor changes, but rather the use of a completely different technology. For instance, the store on the Swedish market is coded in the PWA standard, according to PWA Studio. Meanwhile, he plans to create a store on Hyva for the German market.

PS. Read this post if you want to know what Hyva is.

This director decided to manage prices independently in both markets to complicate and make entering the foreign market more difficult. He doesn’t want to use an automatic currency converter that would convert prices from zloty to euro, but he wants to manage these prices independently.

Additionally, he wants to manage everything from one instance of Magento—one Magento back-end—because he already has Magento integrated with PIM and ERP on the Swedish market, as well as with the Order Management System. It would be nonsensical to create another Magento installation, repeat all integrations, and manage two independent instances of Magento, increasing the cost.

The question is—can this be done? Of course, it can. This simple answer demonstrates Magento’s great possibilities and how much it can be adapted to a foreign version according to specific business requirements.

Suppose you plan to enter foreign markets and have different strategies for different markets—for example, on one market. There should be a different language in that case, but everything else should stay the same. Meanwhile, for the Austrian market, if you want to implement a combo as described above, then we can do it on Magento.

How much does it cost to develop an online store in a foreign market?

So how much does it cost? I’ve outlined indicative expenses for different strategies for entering foreign markets.

1st situation

If we plan to enter foreign markets in such a way that, for example:

  • We already have the German market, with the euro and German language implemented
  • We have a Swedish version with the Swedish language and SKK.

So, we plan to enter the French market, but we want it to differ from the German market only in language. Payment and delivery methods, as well as the products sold, are meant to be identical on both sides. Language is the only differentiating element.

In such a case, I estimate that all the work will take around 30 hours, including configuring Magento, implementing translations, project management, and testing.

With an average market rate of about 65 USD/EUR per hour, the total cost of the project will be about 1.950 USD/EUR. This way, it is possible to enter a foreign market at low costs.

2nd situation

On the other hand, if we want to enter a foreign market where different delivery and payment methods are available, along with the need to implement a new currency, the costs will be higher.

Considering that we currently operate in the Swedish market with the Swedish language and SKK, implementing the euro requires additional configuration. If we add minor changes to the front-end and adjust it to the local market, I estimate that the costs of the entire project will be around 140 hours.

At a rate of 65 USD/EUR per hour, we get a figure of around 9.100 USD/EUR.

From our experience, entering a foreign market usually takes 70-80 hours for an additional market. As a result, the cost of entering a foreign market is about 4.550 USD/EUR.

It’s also good practice to create one “international” version with, for example, English language and currency (EUR or USD). This will be the store’s version from which orders can be placed in every country (without specific adaptation to a particular market in terms of currency, language, and payment forms). This way, for roughly 9.000 USD/EUR, we have sales launched for all foreign markets.

At what stage of the project should we consider foreign markets?

If you’re planning the installation and configuration, as well as the implementation of an online store on Magento 2, it’s a good idea to consider foreign markets from the start.

Why? Because later entry into these foreign markets and maintenance of the entire infrastructure can be cheaper or more expensive depending on whether we anticipate specific solutions right from the beginning.

For example, the developer may plan for front-end inheritance or structure.

Foreign markets on Magento – summary

In summary, does Magento effectively handle foreign markets? The answer is YES (and even a very big YES).

Magento enables various strategies for entering a foreign market, from simple solutions to incredible customization of our online store to the specifics of that market (including a completely different graphic design).

How much can it cost? Assuming an estimation from 1.950 USD/EUR to 9.100 USD/EUR for a foreign version will be a reasonable estimate. Considering it is usually around 4.550 USD/EUR, it would be quite a safe assumption.

It’s best to start with an “international” version and later create more custom versions tailored to local requirements for the most important foreign markets.

If you are considering entering foreign markets on Magento, write to us. We will arrange a detailed conversation to see how we can help.

Growcode Ecommerce Blog / Ecommerce / Magento / Foreign Markets on Magento