Foreign Exchange

The World Wide Web has allowed international competition to move in, but it just may be good for your business.

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On-line Entrepreneur

Competition from overseas has heated up on-line. That may be good news for your business

As president of Dolphin Marketing International, a Minneapolis marketing company specializing in international trade, Craig Snyder gets calls from sales managers with big dreams. "They say, 'I've been reading stories about this Internet," Snyder explains, "'and I want to sell to the world."

What they often don't realize is that while they're just starting to think about selling to the world, the world already is selling to their customers--aggressively and seamlessly. It's a jarring moment when the downside of the World Wide Web's reach presents itself along with its opportunities.

For Snyder's clients, the moment usually comes like this: he invites Internet-eager prospects to an orientation, takes them on-line--often for their first time--and launches a search on their industry. "First thing they see coming out of the engine are dozens of vendors in their sector--from all around the world--all lined up and angling for business. The sites are in American English. The prices are in dollars. And they just stare at the screen and go, 'Hey, wait a minute. Wait a minute. These guys are banging into my market!"

Yes, they are. Companies that used to have to worry only about local competition now must compete with businesses in New Zealand as well as New Jersey. All around the world, vendors in industries as varied as consumer goods, tourism and travel services, industrial supplies, software, and graphics and media design (including Web-site support) are crossing international lines with unprecedented ease.

Foreign companies have awakened to the fact that American buyers are the low-hanging fruit of Internet commerce. They have money: Jeanne Dietsch, vice-president of ActivMedia Inc., which specializes in research on on-line commerce, in Peterborough, N.H., estimates that four out of every five on-line dollars are spent by Americans. They also use a single currency, operate under a uniform commercial code, are relatively sophisticated about on-line relationships, and speak basic English.

"I think we're fairly typical," says Jim Macintyre of Tropical Jim's Remake-Shop, a Web designer in Caracas, Venezuela. "Our firm was in the red until we started selling to the American market. Now 90% of our customers are Americans, partly because salaries in this country are 10% of U.S. salaries for equivalent work. We've doubled in size and plan to do so again later this year. Our goal is to end 1997 with 18 full-time staff and double that number of freelancers."

Frank van der Velden, who gives talks to local businesses about "selling to Yanks," is director of WebMasters Ltd., a Web-design company in New Zealand. He says that U.S. Web surfers themselves have helped develop the eye on the United States. Americans are disproportionately represented in cyberspace to begin with, and they surf aggressively. The result is that they often represent a major portion of the traffic on foreign sites.

And when Web surfers see something they like, they simply make an offer. "Many visitors do not seem to care, or do not stop to think about, where you are based on the planet," observes Simon Croft of World Wide Business Communications, an on-line company headquartered in Croydon, England, that designs and builds Web sites, especially for the professional audio industry.

"People E-mail us questions like 'Where is my nearest dealer?' but then forget to mention where they live." Croft speculates that on-line visitors imagine that all sites are in their own neighborhood. "The logical extension of this is that you are as likely to sell something to a visitor from North America as anywhere else," he says. The flow of inquiries and orders almost compels a company to start thinking seriously about selling to Americans, whether it originally intended to or not.

The surge of overseas vendors actively pursuing the American market is aided by the infrastructure of the Web, which makes it easy to focus on selling to Americans. On-line stores can run on any server anywhere, and vendors are not hostage to the peculiarities of their local infrastructures. They can and do move to servers in the United States (or they set up mirror sites), giving U.S. clients the same quality of service they would get from a U.S. company.

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