When tens of millions of dollars poured into foreign markets fail to deliver expected growth, where does the problem lie? In the era of globalization, overseas expansion has become commonplace for corporations, yet success rarely comes from financial might alone. Recent setbacks experienced by Amazon and other industry giants in foreign markets have sounded a renewed alarm about the critical importance of localization strategies.
Rapid Expansion Meets Cultural Barriers
Europe's ultra-fast grocery delivery sector recently witnessed explosive growth, with startups like Gorillas and Getir achieving remarkable success before setting their sights on the American market. However, these European disruptors failed to replicate their achievements across the Atlantic. Reports indicate Getir was burning through over $60 million monthly, while Gorillas' global expenditure reached $50-75 million per month—yet neither managed to establish firm footing in the U.S.
The collapse of hyperfast delivery services proved as rapid as their promised delivery times. Companies including Fridge No More, Buyk, and Jokr either shuttered operations or withdrew from the U.S. market entirely, while Getir, Gopuff, and Gorillas implemented significant layoffs and scaled back operations. These companies attempted to transplant their successful European models directly into American soil without accounting for fundamental differences in consumer behavior.
Divergent Consumer Habits: A Recipe for Failure
European consumers traditionally shop for fresh groceries every few days, creating ideal conditions for rapid delivery services. American shoppers, by contrast, have been conditioned through decades of market development to prefer bulk purchasing. The phenomenal success of warehouse retailers like Costco and Sam's Club exemplifies this cultural difference. American consumers typically stock up for weekly or even longer periods, a tendency amplified by persistent inflation.
This mismatch between service offerings and market needs led to repeated failures—lessons even Amazon learned the hard way.
Amazon's China Missteps: The Cost of Inadequate Localization
After successful entries into Canada, Germany, and Japan, Amazon acquired Chinese e-commerce platform Joyo.com for $75 million in 2004. By 2008, Amazon commanded 15.4% of China's B2C e-commerce market. Yet over time, its market share steadily eroded until the company ultimately discontinued its domestic e-commerce operations in China.
Jeff Bezos later identified three critical failures in Amazon's China strategy: insufficient aggressiveness, inadequate investment, and most crucially—incomplete localization. Analysis of Amazon's Chinese website revealed purchasing interfaces and payment processes that failed to adapt to local consumer preferences, allowing competitors to gradually claim market dominance.
Localization: The Cornerstone of Global Strategy
Successful market entry requires deep understanding of local conditions and consumer behavior—a universal truth for corporations of all sizes. Countless multinational expansions demonstrate that "to globalize, you must localize," making localization strategy an indispensable component of international success.
Chinese electronics giant Hisense provides a compelling success story. According to Omdia research data, while global TV shipments declined 11% in Q2 2023, Hisense achieved 5% growth to become the world's second-largest supplier. The company attributes this performance to its rigorous localization approach, tailoring products and services to regional preferences. Hisense's North American market share grew to 12% in the first half of 2023 while maintaining leadership positions in Japan, Australia, and South Africa.
Four Competitive Advantages of Localization in Cross-Border E-Commerce
For cross-border sellers facing intensifying competition, localization delivers four key benefits:
- Expanded Audience Reach: Localized products resonate better with foreign markets, enhancing brand recognition and facilitating both market entry and consolidation. Building trust with potential customers requires adapting products, services, and marketing strategies to each market's unique characteristics.
- Customized Consumer Content: Growing demand for personalized content makes localization essential. Generic content consistently underperforms compared to material specifically tailored for local audiences.
- Brand Reputation Protection: Cultural missteps can easily offend when companies misunderstand local social norms. Maintaining localization sensitivity must remain paramount—globalization leaves little room for error.
- Enhanced Customer Satisfaction: Localizing support documentation, FAQs, guides, and customer service ensures businesses meet each market's specific needs. Satisfied customers generate invaluable word-of-mouth promotion, as consumer trust in peer recommendations far exceeds conventional advertising.
In today's hypercompetitive global marketplace, financial resources alone cannot guarantee overseas success. Corporations must combine investment with deep market understanding, cultural respect, and adaptability to local consumer needs. A robust localization strategy remains the indispensable pathway to globalization.