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Taking Your Web Site Global
To lure foreign consumers, you must speak their language — and more

It's an article of digital faith that small and midsize businesses can find international success on the Web. And online perfume and cosmetics exec Eli Katz is a believer -- but he's also a realist.

Katz is confident he can double his foreign sales by luring Japanese customers. Ten percent of his sales -- roughly $4 million to $5 million projected for the fiscal year ending this March -- are outside the U.S. now. Still, he knows his current Web sites -- Fragrancecounter.com and Cosmeticscounter.com -- won't attract the masses overseas. What Katz needs is a complete cultural and linguistic makeover of his sites to appeal to Japanese customers. Why the Japanese? "They're big buyers" of luxury goods, says Katz. "And they're wired."

Katz' Brentwood (N.Y.) company -- a unit of Allou Health & Beauty Care Inc., which has $300 million in annual sales -- has been selling fragrances on the Web for more than three years. But to really go all out on the Net, Katz has his work cut out.

VENTURING ABROAD. Making a Web site appeal to customers in even one other country is costly and technically challenging. As a result, few small businesses have faced the issue. And companies that have created culturally correct Web sites serve mostly large businesses.

Yet, say digital-commerce experts, entrepreneurs will have little choice in the long run if they want to attract international clientele. Don DePalma, principal analyst for Forrester Research, a Cambridge (Mass.) research firm, explains: "The Web opens up global markets to even tiny companies." With this caveat: International visitors are three times more likely to buy in their own language, his research found.

With that in mind, Business Week's Frontier Online asked Jorden Woods, chief executive of Global Sight Corp., a San Jose (Calif.) business that helps large companies take their Web sites global, what issues an entrepreneur such as Katz will confront in trying to appeal to Japanese buyers.

Woods -- who doesn't know Katz or his business -- says entrepreneurs who want an international site face two decisions: First, can they afford it? Woods estimates that for a small E-commerce site with 40 or 50 static pages -- ones that don't have places for users to request information -- the translation, legal, and cultural consultations will cost around $10,000 to $15,000 initially, plus about the same amount each year to maintain the site. Sites with dynamic pages are more expensive, he says.

Second, a small-biz site needs to find a company capable of taking on the task. Maintaining an international Web site isn't a job for amateurs. The company must have capable translators, Web designers who know what graphics appeal to people in a given country, and consultants who understand the logistics of doing business there -- customs rules and sales taxes, for instance. One way to find such a service is to search the Internet under "Web translation." Other options are to ask your Web developer or an advertising agency that does international work on the Net. Katz says he plans to hand over the execution of the Japanese version of his Web site to his ad agency, Organic Online Inc. Organic says it would do some of the work in-house and have outside partners do the rest.

If you decide to forge ahead, making your Web site work for international commerce is a multifaceted process, Woods explains. Here's some advice:

· Shell out for good translation. It may be tempting for a small business to rely exclusively on software translation to save money, but Woods cautions that the results are likely to be unsatisfactory, especially for a small business that wants "a premium image." Though it's almost impossible to avoid automated translation for pages that change frequently, he suggests including "a disclaimer saying the grammar and translation may not be perfect. And if you have any questions, you can let us know."

· Put users in the new country at ease. Woods says, "In Japan, they tend to like little cartoon characters and pastel colors." Without someone to guide Web designers in such matters, small companies must learn by trial and error.

· Create a product mix that suits the market. "You need to understand the preferences and tastes of the market you're going into," says Woods. Katz is already tuned into that issue. "For example, some [cosmetics] products are geared more toward Asian skin colors, and certain brands are more popular there than the U.S."

· Have a payment method that fits local practice. "People in Japan don't purchase the way we do in the U.S.," says Woods. "The penetration of credit cards isn't as high in Japan, so you may need to consider alternative forms of payment, like E-commerce wallets where people have an [online] account and debit a certain amount of money."

· Consider a local distribution system. A big advantage of buying on the Web is that prices are generally lower. But shipping from the U.S. could erase any price advantage. Luxury products like perfume and cosmetics can sell at premium prices in fancy stores because of the cachet. On the Web, that's lost, so price and efficient service are key. Katz plans to ship products from the U.S. until he can find a suitable partner in Asia.

· Know local laws regulating your products, taxes, and tariffs. Expenses may have to be added into the price of your online products. Other regulations may apply as well. Woods says, "I do know there are restrictions with vitamins being sold in Japan." You'll need a legal review to make sure you're operating properly, he says.

· Find a way for customers to communicate with you. E-mail with Japan is tricky because most U.S. computers can't properly display Japanese characters, Woods explains. So you either need someone abroad who can handle native-language inquiries or local in the U.S. who can handle the language and has a computer that can read Japanese characters.

· Market your site abroad. That means making sure Web search engines can find you and paying for advertising, typically on locally popular Web sites. "You can't just put up a Web site in a foreign language and say, 'We're here,' " says Katz. "You need an aggressive marketing campaign." For him, that means placing banner ads.

Katz says he thinks it will be worth the time, money, and effort to make his site friendly for Japanese consumers. "At the end of the year, we want to be the No. 1 retailer of fragrances and cosmetics on the Web in the world," he says. He acknowledges that he doesn't have a lot of competitors crowding his online niche. If his Japanese Web-site strategy works, he'll have a loyal coterie of buyers lined up by the time rivals get there.

By David Haskin in Madison, Wis.

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