Vinomofo On Overcoming International Expansion Hurdles

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By Published On: March 14, 20190 Comments

According to Vinomofo’s CEO, “it’s not one size fits all” when it comes to successfully breaking into international markets. What are the main hurdles Aussie e-tailers face, and how can they be overcome?

Recent research from payments infrastructure company, Stripe, revealed that Australian businesses are falling behind the rest of APAC when it comes to successfully implementing an international expansion strategy. In Australia, 66 percent of online businesses sell internationally, while in Hong Kong and Singapore, this number is as high as 88 percent. The EU is also outpacing Australia, with digital brands from France, Italy, Spain and the Netherlands all embracing global operations at a faster pace than Australians.

According to the company’s findings, the cost of regulatory and compliance issues are taking a toll on Australian brands attempting to make an impact overseas.

To understand the challenges Australian brands face when branching into the broader e-commerce sphere, we sit down with Justin Dry, the co-founder of Vinomofo to learn about how the company has tackled its own expansion and how brands can overcome common hurdles.

Vinomofo’s International Expansion So Far

Australian wine has become an in-demand product in international markets, with platforms like Alibaba saying consumers in much of the Asia-Pacific region are looking to purchase Australian goods, like wine, online.

As a curated online wine retailer, Vinomofo is poised to make an impact in markets outside of its home country. So far, this has entailed breaking into New Zealand and Singapore, with further expansion on the cards over the next few years.

“Going global was always the plan for us. We started Vinomofo to connect everyone with good wine, and to do this we have to be global. We launched our first international market in 2016, five years after launching, once we’d proven out the model in Australia and had the resources to do it properly,” Dry says.

Since the brand’s initial foray into new territories, Dry says the company has learnt a lot and has become more ingrained in the culture of different markets.

“We launched in New Zealand first, and we approached it in a very similar way to Australia. However, we quickly learned that it’s not one size fits all and had to adapt our model to suit each country we were entering. We took these learning’s from New Zealand to Singapore, which has gone on to become an incredibly exciting market for us. Three days after our launch in Singapore in 2016, we sold out of all the wine we sent over which was expected to last us a month. While it meant some very fast backsolving, it was a super exciting time for us,” he says.

Common Hurdles E-Tailers Face in the Global Eco-System 

Dry does note, however, that becoming an international retailer does require a lot of research, preparation and problem solving, all of which shouldn’t be taken lightly.

“Outside of the normal market research you do prior to committing – legals, licensing and custom requirements are the big ones and this is very different in each country, and sometimes even each state,” Dry explains.

“Logistics are also a big challenge when setting up because we sell a physical product that is heavy, fragile and contains alcohol so there are plenty of hurdles including setting up a warehouse and delivery solution. From an operations perspective, it’s a collaborative effort with each of the teams looking after their respective areas with the help of some local partners on the ground.”

Regardless of how prepared you are, Dry says that expansion is always a “wild card”.

“You can do the research and think that what you’re offering is the right thing, but until you’re on the ground and actually operational in that market, you can’t have a true understanding. We find that we often need to tweak our offering once we learn more based on first-hand experiences.”

Vinomofo’s Tips For Overcoming These Hurdles  

How can retailers overcome the hurdles associated with international expansion? According to Dry, the right tech solutions are crucial.

“Technology has enabled us to be a global company. We still run the majority of operations out of our HQ in Melbourne, and obviously, rely on technology to do this. From our site to the tech we plug in, like Oracle, DOMO and Stripe. We are always looking for systems that are easy to use, integrate and scale globally. For us, Stripe has ticked those boxes.”

Dry also emphasises that breaking into a new market takes time, but in the long-term, is worthwhile.

“It’s going to take longer and cost more than you think and no matter how much you prepare, you’ll always have to adapt to the market once you’re there and learn more for actual experience,” he says.

“But it has its benefits… Sometimes it’s the little things like being stopped in a hawker hall in Singapore by a mofo who raves about the experience, other times it’s hitting big scary goals like revenue or community numbers but mostly, it’s seeing something you’ve created expanding and helping globally.”

At the end of the day, Dry says that “fortune favours the brave”, which speaks volumes for his view of the benefits of going global.

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