Tech Race: Is Europe Getting Ahead?

Since I joined Boo.com, I’ve been spend­ing a lot of time in the UK and have met a lot of peo­ple who do E-commerce in Europe. This has brought me to the inter­est­ing con­clu­sion that Amer­i­can firms are going to have a hard time get­ting into the Euro­pean mar­ket, or any mar­ket out­side of the US for that matter.

Much like new devel­op­ments in wire­less plat­forms (mobile phones and other devices) and inter­ac­tive tele­vi­sion are now mov­ing at a faster pace abroad than they are in the US, E-commerce is bound to become a non-US lead field if Amer­i­can com­pa­nies don’t watch out. The rea­son is quite sim­ple: legacy sys­tems and lack of iden­ti­fi­ca­tion of vari­ances that exist out­side of the US.

Let’s take a sim­ple exam­ple: sell­ing in mul­ti­ple coun­tries. Because no coun­try in Europe is suf­fi­cient to cre­ate a strong mar­ket for a par­tic­u­lar retailer, Euro­peans Etail­ers are keep­ing an eye out on issues like mul­ti­ple cur­ren­cies and mul­ti­ple lan­guage man­age­ment. In the US, it’s dol­lars and Eng­lish. In Europe, it’s pounds, deutch­marks, kro­ners, etc… and Eng­lish, French, Ger­man, etc… That some­what sim­ple dif­fer­ence means approach­ing the devel­op­ment of sys­tems with a dif­fer­ent view. From the get-go, Euro­peans are kick­ing off their sys­tems with an eye towards supra-national sales. That means being able to deal with cus­tom taxes, rates of con­ver­sions, and mul­ti­ple lan­guages from the start.

Those are but a few of the issues they are accus­tomed to deal with but not the only ones. In the UK, for exam­ple, the inter­ac­tive TV plat­forms have been rolled out and web and email access from your cell phone is more of the rule than the excep­tion. As a result, Euro­pean Etail­ers are devel­op­ing their web based sys­tems with an eye to other plat­forms. Most Amer­i­can sys­tems are stuck into lega­cy­ware that ties their plat­form specif­i­cally to the web and will even­tu­ally have to be trashed in order to take advan­tage of the new platforms.

That said, Amer­i­can com­pa­nies have a def­i­nite advan­tage in know­ing the web VERY well. That advan­tage turns to dis­ad­van­tage though, when they are asked to do things dif­fer­ently. We are now an indus­try that is get­ting more ingrained into its own frame of mind (well, this is the way other web shops do it so why should we change it). How­ever, because non-US mar­kets got into the game late, they had the advan­tage of being able to deal with more mature tools and try to go beyond any­thing that’s been done before. For exam­ple, I talked about Accompany.com back a few months ago, and saw it as a major devel­op­ment in the way peo­ple buy (Aggre­ga­tion of cus­tomers for reverse auc­tion). That mes­sage appar­ently also sunk in with some peo­ple in the Euro­pean mar­ket and there is now a healthy com­pe­ti­tion among ven­dors in this mar­ket. How­ever, in the US, it seems that by and large, this area of Ecom­merce is widely ignored.

What will we do if that land­scape is dom­i­nated by non-US players?

It’s now high time for Amer­i­can Etail­ers to wake up and real­ize that the global mar­ket is as impor­tant as the Amer­i­can one. After all, we’ve all been talk­ing about one of the advan­tages of the Inter­net being that it is a global mar­ket. Let’s remem­ber that fact and start act­ing as global com­pa­nies instead of US-only ones. Oth­er­wise, Euro­pean com­pa­nies will most likely eat our lunches.