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Companies cash in on localising Web content

Companies cash in on localising Web content

Although the Internet's global reach has every dot-com company champing at the bit for international dollars, the fact remains that most Internet trailblazers have yet to capitalise on the new frontier of a global customer base.

However, for those companies that get the global picture and have evolved their Web strategies to address international issues, the payoff is plentiful.

'A major IT company came to us [and] said: 'We know where all our customers are, we just want to use your network,'' explained Catherine Carlton, a Hong Kong-based regional manager at Digital Island, a network services provider that offers localisation of electronic-business applications through its private network in Hawaii. 'When our report came in showing where their customers were, the company was shocked to see that 15 per cent of their customers were dialling in from South Korea. They didn't know that market even existed.'

So the company created a Korean Web site, and its revenues rose by 8 per cent, according to Carlton.

Awakenings like this are becoming more common. Although, at 26 per cent, the United States remains the most connected country in terms of the number of people online, the rest of the world is rapidly closing the gap - especially in more developed countries. According to International Data Corp. (IDC), in Europe, for example, an estimated 44 per cent of the population will use the Internet in 2003, rising from only 11 per cent in 1998. And worldwide, just 4 per cent of the population used the Internet in 1998, but IDC predicts that 11 per cent will have signed on by 2003.

All of this means that there is more pressure for dot-com companies to take advantage of the increasing internationalisation of the Web by meeting the challenges presented by a global audience. These include responding to different local buying patterns, cultural habits, and - of course - languages.

Reining in global growth. New technologies and services are fuelling the global growth. Infrastructure solutions, such as wireless technology; cheap Net appliances, such as handheld personal digital assistants, which undercut high computing costs; and local service providers that help companies truly overcome language barriers, enabling companies with online presence to do more than throw up a quick-and-dirty localised site. These technologies are all contributing to the rapid pace of change. However, despite technological advantages, some companies have not yet bothered to cater for international consumers simply because they are just realising that many of their site visitors come from all over the virtual globe. Meanwhile, those who realised that the advantages of having localised Web-content are many are getting into new markets early.

'[Many] countries are building their own centres of excellence, and the technical field is going to see more increased competition,' says Dan Guinaugh, a marketing strategy director at the US-based Bowne Global Solutions, which provides content-localisation services primarily for the software industry.

In Singapore, for example, a new government-owned company,, was set up with the start-up capital equivalent to $US26.7 million to create a network of buyers and suppliers within the Association of Southeast Asian Nations countries, which includes Singapore, Indonesia, Malaysia, Thailand and the Philippines, as well as Australia, India and Hong Kong.

There is a certain point at which local markets reach saturation, so businesses look elsewhere, notes Dafna Ciechanover, director of marketing and business development at Excite UK, in London. She points out how Excite identified projected business growth in Europe as US Internet growth started to slow down; using the United Kingdom as a jumping-off point for Europe. 'The UK market is a significant portion of the overall global usage,' Ciechanover said.

Of course, rates of growth in Internet usage and electronic commerce vary from region to region and country to country. Telecommunications sector deregulation in Europe has helped reduce consumer costs in some countries and ignite interest in the Net, and the region has been a natural next stop for many businesses expanding their initial presence on the Net. But the rest of the world isn't far behind.

'In Asia-Pacific alone, business-to-business e-commerce spending in 1998 was estimated at $8 billion and is expected to reach $280 billion in 2003,' says Lee Hsien Yang, president and CEO of the Singapore Telecom Group.

Although Latin American e-commerce markets lag by comparison, Internet globalisation is now starting to ignite that region as well. In what it calls a conservative estimate, IDC predicts that about $8 billion will be transacted via the Internet in Latin America by 2003 - a significant jump from only $170 million spent in 1998.

So, even though this region remains significantly behind Asia and Europe, local companies are rising to the occasion. StarMedia Network, a portal in Spanish and Portuguese focused on the region, went public in May and has seen its stock value rise from its initial public offering price of $15 to above $40.

Big-name international, and especially US, Internet companies are also jumping in. America Online formed a joint venture in late 1998 to launch portals and its online service in countries throughout the region over the coming years. Yahoo has a site geared toward Spanish-speaking Latin Americans, and it recently launched a site in Portuguese designed for Brazilian Web surfers.

Considering culture, content. But companies have to watch out - what works in some countries and cultures doesn't work in others. One recent success on Microsoft Network's (MSN's) Web site in the United Kingdom could not be widely distributed to other national sites because of its local flavour, according to Sharon Baylay, European marketing manager at MSN.

Called 'Naked on the Web', the show 'put four people in a room, literally naked, and locked the door for one week,' Baylay said. The subjects had only an Internet connection to procure food, clothing, and everything else. England loved the project, but stories about local online food delivery just wouldn't translate abroad, she explained.

The types of service people want also vary from region to region. For instance, unified messaging is a much bigger deal for people in Europe than people in the US, so Lycos' joint-venture partners in Europe have been aggressively pushing that service on local sites, according to Lycos' international program manager, Stephanie Haag.

Foreign entrants into local Internet-commerce markets 'won't have some of the local knowledge and won't know the idiosyncrasies of the market as well as the local players', said Tim McCarthy, chief executive officer of AdvisorTech Japan, a consultancy to online brokers which has offices in San Francisco and Tokyo.

For example, in many countries, people are far less likely to pay for goods with credit cards. In Japan, even checks are practically never used in day-to-day life. Of course, Japanese consumer giant Sony knew this when it offered its 'entertainment robot', Aibo, for sale online this summer. Sony offered a payment option whereby Aibo buyers could have their pet robots sent to a local convenience store, where they could pay for them directly in cash. Would a US company have thought of this?

Other cultural issues may be even more significant, although more subtle. For example, one apparently well-localised site was ignored by Chinese consumers because of its inappropriate use of the traditional Chinese red and gold colours, which connote prosperity, says Pete Hitchen, a senior analyst of Internet research at IDC Asia/Pacific, in Hong Kong.

In addition, industry insiders advise companies to keep in mind that legal issues often vary from country to country. 'In some countries you can't legally buy melatonin, so in those countries, pharmaceutical companies would prefer not to advertise drugs online that aren't approved,' Digital Island's Carlton said.

Companies also have to be careful about controversial or political content on their sites because the idea of free speech is not universal, said Roger Hicks, a principal consultant at PricewaterhouseCoopers, in Auckland. 'Free speech in some countries is actually illegal content in others,' he added.

Localising language and identity. Language is one obvious issue that international businesses must deal with when expanding online efforts, and nowhere is it more important than in Asia. The Asian-language issue is especially problematic, because of the need to develop Web sites capable of handling double-byte Asian scripts.

According to IDC research, approximately 75 per cent of users in China and Korea prefer Web sites in their native languages, thereby increasing pressure on Western companies to localise.

A similar percentage buy goods via the Internet from Web sites based in their own country, despite a relative lack of choice, according to IDC.

Nevertheless, some well-established international companies believe they have a great advantage on the Web over businesses local to foreign markets because they can take existing technology and use their company name or brand to hire locally and deal with local providers.

'The technology and expertise comes from us, and we leverage that to hire people who can fully localise our content,' Excite's Ciechanover said. 'People know the Excite name and trust the brand.'

Local companies are confident that Excite has already proved itself on the Internet and can raise the profile of the local companies it is dealing with, Ciechanover added.

But international branding is a sensitive issue, and brand names too closely associated with particular countries may not always be well received in some areas. For this reason, America Online goes simply as AOL in Europe.

Operating efficiently overseas. Many international Web players say that choosing the right partner is perhaps the most important issue in expanding outside of a company's home turf.

'When you select your Net partners, make sure they're regional players: if they're centered on a single country, it'll be very difficult to expand the business over time,' Mark Duff, CEO of Hong Kong Internet brokerage, advised.

Local business regulations also need to be examined. 'If you want to try something innovative, you really have to make sure you work closely with local regulators,' AdvisorTech's McCarthy said. 'The regulatory restrictions on money movement as to when people have to pay will shock foreigners.'

When expanding internationally, local technical and operational issues also have to be considered. 'In China, the 28.8Kbps modem is standard, so you really want to minimise use of graphics,' Digital Island's Carlton said. 'Think about the route taken to get information from your Web site: if a user is in Singapore and the site is in Hong Kong, it might go from Singapore to Japan to Alaska to Hong Kong. So, better to host your site in Hong Kong.'

Hicks also warned that even seemingly simple details on sites can alienate users. For instance, address forms that won't process without a postal or area code of the company's country of origin are an easy-to-avoid pitfall. Hicks said that he has a friend in Sri Lanka that can't fill out most forms on the Web because he has a one-word name. Such oversights demonstrate a company's 'lack of awareness of the greater world' and can alienate them to local users, Hicks explained.

Harnessing the wild, wild Web. Although different international and local players give assorted advice for expanding online businesses globally and localising content, there are five key points with which many experienced international players would likely agree:

Value the human touch. Trust translation only to human translators and not to automatic-translation programs or machine translation toolsBe strategic. Lay out a strategy for Web globalisation, and realise that globalisation is a process. Think about the languages and countries it makes the most sense to target first and what it will take to support those audiences.

Know your audience. Understand cultural preferences, conventional differences and legal issuesBe a perfectionist. Use language and technical editors to avoid mistranslations or graphics that don't work wellRemember, it's the Web. People expect up-to-date information. Plan a process for keeping sites in sync with one another so that no localised site's visitors feel they are second class because the information is outdated.

Avoiding such pitfalls is especially important because even though local Web businesses in other countries have gotten online later many have learned from foreigners' mistakes.

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