How To Succeed In Europe’s Fragmented Ecommerce Market — Nicolas Appert | Why Europe Is 30 Unique Markets, What Marketplaces Exist Beyond Amazon, What True Localization Requires, How To Select The Best Entry Market, What AI Agents Mean For Search (#436)

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00:00:00:01 - 00:00:22:24
Claus Lauter
So you have to define first. Where is your best entry point? Where is the place where you can actually easily leverage your business? And then from that point, understand the differences and how to execute or grow your business in the other countries, understanding exactly how you need to adapt your strategy to to match with the other markets. Hello and welcome to another episode of the eCommerce Coffee Break podcast.

00:00:23:01 - 00:00:44:28
Claus Lauter
Europe is one of the biggest opportunities for online sellers, but it's far from simple. Different languages, local rules and payment habits make it tricky to start selling in Europe. Today we got Nicolas Appert with us. He's a seasoned French entrepreneur with over 25 years in software and digital markets, and since January 2024, he has been the CEO of Lengow, a leading e-commerce automation platform.

00:00:45:00 - 00:01:13:14
Unknown
He has helped hundreds of brands grow smarter across Europe. And today he's joining us to share what works and what doesn't when selling across the continent. Nicola, welcome to the show. Thank you very much, Klaus. Nice to be here. Nicola Let's start. Simple. Why is selling in Europe so much harder than it looks? Oh, I think one of the most a known difficulties for people that are not coming from this part of the world is to understand that this is not just one market.

00:01:13:14 - 00:01:36:25
Nicolas Appert
It's just a constellation of 30 small markets that are working. Each of them with their own regulation and their own culture, their own DNA. And, you know, it's not like you can copy paste your expansion from one country to another without understanding all those differences. Yes, it is a huge market. It's probably it's probably one of the largest market in the world.

00:01:36:27 - 00:01:58:25
Unknown
We've all you know, you always talk about the 450 million consumers of Europe. But in fact, I'd say, you know, as I said, it's a constellation of 30 different cultures, countries and so on, which means that you are actually talking to a very, very different consumers from one country to another. Mm hmm. Now, we are both from Europe.

00:01:58:25 - 00:02:26:18
Nicolas Appert
For our listeners in the United States, might be a little bit difficult to understand because for them, Europe seems so small, but it's very, very diverse. And when they're going into the market, what's the cost of trying to localize and go without a real strategy? I often say that localization is very, very different from just translation. It's taking into account a number of aspects from a cultural understanding of each population age profile of users.

00:02:26:21 - 00:02:52:05
Nicolas Appert
So when you are, for example, describing a product the way that you do it and important aspects are words that you need to use in your product description. Diverse from France to Germany. Very good example is it's very important for German consumers to understand where they're in the products they are buying is made of plastic or not. It's much less important for French people and they don't really care about this aspect.

00:02:52:06 - 00:03:17:25
Unknown
So there are some very cultural aspects that you have to take into account so that when you are localizing the description of your product into in your country, you have also to take into account the DNA of that country. And that's just one very small example, because the pictures, because, you know, even very regular regulatory aspects such as a VAT is different from one country to another.

00:03:17:28 - 00:03:43:08
Unknown
So in some countries you present the price with VAT, others without VAT. And then the deeper the VAT levels can actually be different from one country to another. And it's almost true for everything. It's true for VAT, it's true for return product policy. It's true for a very large number of things that makes the life of merchants who wants to expand from one European country to another very, very complicated.

00:03:43:10 - 00:04:02:18
Unknown
Mm hmm. Now, we don't want to scare away people from Europe because it's a huge market. There's a lot of opportunities in there. So we want to drive a little bit into the strategy on how to do it right and how to do it step by step. Maybe. Let's start there. What would your approach for a non-European company or brand looking at to Europe?

00:04:02:21 - 00:04:30:22
Unknown
What would be the first step to get started? Well, I think there are some you know, there are some some countries that are usually seen as the entry point for Europe. So first of all, it's important to pick up the rest, the right destination for for your product. Just to get started with Germany's is is a good access for a number of very industrial type profiles of products we see in some verticals.

00:04:30:25 - 00:04:56:22
Unknown
It's a funny example when you're talking about about food business besides UK, the best place to start a business is Spain. That's actually one market that is very, very good for penetrating, let's say, a new brands that is doing fast food. Who wants to who wants to try this business in Europe? It's it's a very good entry point.

00:04:56:24 - 00:05:19:14
Unknown
So you have to define first where is your best entry point, Where is the place where you can actually easily leverage your business? And then from that point, understand the differences and how to execute or grow your business in the other countries, understanding exactly what difference it will take for you to or how you need to adapt your strategy to to match with the other markets where it makes perfect sense.

00:05:19:21 - 00:05:41:06
Unknown
Now, how is it for smaller brands? Is there a chance to compete with established brands in Europe? What would be your strategy there? The big difference between the e-commerce marketplaces in Europe and in the US is that in Europe you have you have a number of champions like the Amazon dot com or other well-known places like Zalando and others.

00:05:41:08 - 00:06:22:13
Unknown
But next to them is a number of very niche, very specific smaller marketplaces which are actually extremely attractive and very good in their own small market or small niche. So you need to really understand this infrastructure. And as a small player, you could actually either, you know, go through working with Amazon dot com, which definitely is the leader, but also look at a strategy where you could actually team up with smaller players that would be quite attractive to have some, you know new products to offer to their to their customers and which are playing a significant part also in the marketplace.

00:06:22:15 - 00:06:47:08
Unknown
Mm hmm. Now, obviously, for someone coming from outside Europe looking into this is very complex, might be very, very overwhelming. And having a partner like Lego on the site does not definitely help. How do you help your clients was getting into Europe? Well, as you know, one of the point where I believe lingo can actually offer a lot since we are trying to reduce that complexity for our customers.

00:06:47:11 - 00:07:11:15
Unknown
We do. We do know the market. We know all those marketplaces players and the different ways also to advertise about your products. And so we can, together with our customer based on product, they have the size of the company and so on. We can define with them, which is going to be the the right path for starting the business in Europe and expanding in the different countries in Europe.

00:07:11:17 - 00:07:43:15
Unknown
So not only we are kind of leveling down the complexity from a technical standpoint because it does require, you know, a lot of connections with all those marketplaces which sometimes are working in different manners. We can help the customer also to adapt its localization, thanks to also artificial intelligence components that we have embodied into our platform. And also we can be adviser of the brand on how or let's say, which would be the right partners to get started with.

00:07:43:21 - 00:08:22:26
Unknown
Another aspect which you're probably aware is let's take the example of the fashion industry in the different countries in Europe. The way that you are dealing with sizes is not exactly the same. So in Italy, in France, in the UK, you're actually talking about the same product with different or various sizes. So again, when you manage your catalog, you need to have partners like Lego to help you make the right conversion between the different attributes that you have in order to define properly the size of your product on its marketplaces and how they expect the size to be arranged.

00:08:22:28 - 00:08:43:09
Unknown
I think it's a very, very good point that you mentioned there. I have been to Asia and an excellent in Asia is a complete different world than an Excel in Europe or United States. Now, you mentioned Zalando, for instance, for Germany. There are so many platforms that our U.S. listeners might have never heard of before. You have a whole suite of features on of products with LENGEL.

00:08:43:12 - 00:09:09:26
Unknown
Talk me through how these different features, these different tools that you have helped sell us getting started. Yeah. So in fact, our solution goes like a, as you said, a suite, like a one stop shop for for merchants. So we we have a product that is focusing on advertising management. So it's actually pushing ads towards places like social networks like Google Shopping and others.

00:09:09:27 - 00:09:42:20
Unknown
So it's actually pushing your product ads to this to these places. This is called that Amplify. And we have another product called Net Market, which is connecting to a range of marketplaces. As a as I mentioned already, we have connections to roughly 70 marketplaces across Europe. So based on your vertical and your business, you will be able to push your product into those marketplaces thanks to the connections to multi omnichannel connections that we are providing.

00:09:42:22 - 00:10:09:20
Unknown
And then we have also tools to help you understand the markets and its behaviors, which are kind of scrapping the information across a specific market for specific products and brings you back the prices, the availability of the products of your competitors. So you can actually position also your products in terms of sales strategy to the right price are based on the analysis that you would be able to do on a specific market.

00:10:09:22 - 00:10:35:26
Unknown
And for the brands that are going into a B2B to see or a more indirect process with retailers and so on, we finally have this net control solution that enables them to control their network, make sure that everyone's playing the right game, that the data governance is fine, meaning that the product descriptions, images that the brands wants to show about their products are actually accurate across their retail networks.

00:10:35:26 - 00:10:56:09
Unknown
And that's basically where those four components you can really have a better understanding of the ecosystem that you're going to enter and how to how to penetrate that market. Mm hmm. Now, you have worked with hundreds of brands. What's what's a typical approach when a Brant comes to you? How do you get started with the brands to get them launched in Europe?

00:10:56:12 - 00:11:17:18
Unknown
Well, it is pretty different from where they coming from. So we talked a lot about the US guys who wants to enter the European market, but there's even more complex situation. We're working a lot with Chinese resellers who would like to penetrate the European market. And for Chinese, it's even more complex to understand how this all things works, right?

00:11:17:18 - 00:11:55:06
Unknown
And they are far away. They might not have, you know, people on the ground to understand the need. The entire European ecosystem, etc.. So our approach with them is a little bit different from what we have with us sellers or people selling from other areas. For example, with the Chinese reseller, it's it's it's really down to a complete kind of consulting system where they are not only relying on us to adapt their catalogs to the market, they see that we are in Europe.

00:11:55:06 - 00:12:15:10
Unknown
But really to understand, okay, how shipment will be done, how return products will be done. So. So it's a complete advise from the very beginning of what catalogs you need to put on those marketplace all the way to how are you going to handle orders, returns and so on. So the fulfillment part, thanks to some of the partners and to the ecosystem that we've built.

00:12:15:12 - 00:12:36:02
Unknown
Is is, is, is, is a complete journey that we are selling them. Mm hmm. When it's the right time for a brand to reach out to you in their process or put it the other way around. What kind of homework do they need to do before they can get started? Well, first of all, of course, they need to have a proper, proper product catalog in place.

00:12:36:04 - 00:13:14:29
Unknown
We are we are working with midsize to large enterprises that starts our ICP at single. And, you know, obviously the the cost of setting up a business in Europe requires you to have at least a sustainable business from your initial operations because it's actually a complex system that that can only be successful for, for a mid-sized to large size on a price very, very difficult for a small enterprise to get into the market in Europe and expect to grow if they don't have a well, you know, stable home business in the first place.

00:13:15:01 - 00:13:41:15
Unknown
Mm hmm. Give an example. Case study. You don't need to name the brand of somebody you worked with you and what kind of results they saw. As you said, we have and we have a lot of a lot of customers in various verticals. I think, you know, the two the two verticals that are working very well lately in the e-commerce business are home and garden.

00:13:41:17 - 00:14:11:03
Unknown
I was mentioning, you know, those Chinese resellers, they are very good in the home and garden space and a lot of them are coming to Europe, especially through Germany and Poland, which are their entry point. And I was mentioning earlier in order to sell their products and they are pretty successful with this, but also because they are relying on strong brands that they've built within the Chinese market itself.

00:14:11:05 - 00:14:59:08
Unknown
Another another interesting industry where that we've been helping is the is the take and take on beauty. We we are working with the worldwide brands should such as L'Oreal or LVMH, but we are also working with much smaller players in that field. And we've seen very good success, especially in the new growing social e-commerce with platforms like TikTok Shop, which we've launched last year in France and was already launched in the U.K., as you probably know, and is in those very specific markets, those guys have proven to have extremely good results and very fast growing market share.

00:14:59:11 - 00:15:16:27
Unknown
Mm hmm. You touched on something that I'm very interested in, and our listeners already know this I want to touch on and you just mentioned social commerce as a huge shift in e-commerce going on right now, and you are on the forefront of what's happening in the market. Tell me your perspective. What do you see happening in e-commerce right now?

00:15:17:00 - 00:15:44:24
Unknown
First of all, I as I was mentioning, is extremely helpful in the localization business. You can really now start with with, let's say, a catalog which is already based in one language and translate it into many others, including this understanding of the cultural necessity, and then the cultural adaptations that we are required to, to, to be efficient on on each market.

00:15:44:26 - 00:16:23:21
Unknown
There is another very useful use case that we are delivering with some of our customers related to contextual picture adaptation. It's about taking a product picture, extracting the background, and then replacing the background with some contextual information environment. So whether it's for a specific event like a Black Friday or Christmas, whether it's also to, let's say, take the take the look and feel of the social media that you are working with and obviously, you know, the picture that you're going to send for Google Shopping is probably not the same picture of your product.

00:16:23:21 - 00:16:51:12
Unknown
That's the one you're going to use for TikTok Shop, right? So all that can actually be really empowered with the AI capacity today. And we we have and boarded a lot of features around that in our platform to help our customer be agile and efficient with this. But then there is another, there is another air space that is very important for us to look into, although this is this is not yet a game changer.

00:16:51:15 - 00:17:29:13
Unknown
It's all about the customer search journey for products. Right now, most of us we were using Google to look for a product that we wanted to buy, but more and more people are currently using agents or chat bots to get some information. The thing that we need to understand there is that the process is entirely different when you are going on Google and you want to look for some, you know, red Nike shoes, you're going to ask, okay, I want some red Nike sneakers.

00:17:29:15 - 00:17:48:23
Unknown
And then Google is going to show you all the red nice sneakers he has with the prices where you're going on Chatty Betty and you're asking for the sneakers that you want to buy, you're going to ask to Jupiter. Okay. What are the trendy sneakers today? And then it's going to come up with trendy sneakers that could come from either Nike or Puma or whatever brand.

00:17:48:26 - 00:18:17:15
Unknown
So first of all, it's actually much earlier in the decision making process when you're doing a search on said you better than what you're doing, than what you were doing previously on Google and secondly, in order for the artificial intelligence agent to give you the right answer, it has to have information from the product data that are more conversational than just description based.

00:18:17:18 - 00:18:42:00
Unknown
And therefore, it requires that your catalog in the way that it is referencing and describing your products, not only takes care about the attributes like it used to be, but also includes some very conversational information or words that the limb could actually be used to reference your product properly and present it in the request of customers. I don't know if I'm clear here, but it's it's a it's a complete way.

00:18:42:00 - 00:19:02:26
Unknown
It's a completely different way of searching products. And it used to be in the past. And our customers will also have to adapt by providing very much more information about their products than what it used to be in the past, where he was very structured around attributes and stuff like that. Mm hmm. Thank you for summarizing this. I think this was brilliant.

00:19:02:26 - 00:19:38:23
Unknown
And for our listeners, listen to this twice, because that's the journey we are on is taking over and Chhatrapati search will probably be coming stronger than Google ever was. Now you all are supporting all this and a ton of platforms. What kind of APIs do you provide? Just for a good understanding, what our software is doing is it's picking up information from one side on the on the catalog of our customers or whether they are, you know, team catalogs, dumb catalogs or ERP or CMS environment.

00:19:38:25 - 00:19:58:06
Unknown
We are combining them together in order to make it flow. That is what's expected from the market on the other side in the right format by the market, basically. So so we don't provide so much APIs. We are more interacting with those as API in order to grab properly the information and push it back to the right place.

00:19:58:08 - 00:20:24:03
Unknown
But we have connections with a significant number of infrastructure types of products and I was mentioning the PM, but also ERP and stuff like that. So we've got connection with hundreds of different products. Shopify, I can tell, satisfy a lot of other dams and so on to, to properly collect that information in the most efficient way for our customers.

00:20:24:06 - 00:20:54:02
Unknown
Mm hmm. Now, with all the features, with all the services that you offer, our listeners might be interested in working with you, in getting the foot in the door in Europe, how does the onboarding process works? How long does it take? Vary depending on the quality of the catalog of the customer. But I would say it takes any anytime between two weeks to six months and again and again, it's very much so now.

00:20:54:02 - 00:21:25:08
Unknown
Six months is clearly especially not, not the usual that's but the reality is some marketplaces are extremely demanding in the way that they need the information to be propagated. We were that we were you know, we were talking about zalando that many people might not know on the show, although it's a very important marketplace here in Europe. They have a requirement that all the pictures that you are providing shall be taken on a white background.

00:21:25:10 - 00:21:55:05
Unknown
But it's not exactly white. It's white gray. So and they are just refusing any picture that doesn't match their requirements. So in many cases, it even takes our customers to either go through a reshooting of the products or use the AI to actually adapt the pictures to the right format. But in that case, and that's why I'm saying, you know, it could even take six months because you guys have to go back to the shooting stage and reshoot all their products.

00:21:55:05 - 00:22:16:25
Unknown
It can take actually quite a while and costs a lot of money. Mm hmm. I to the help I say there, I think was I that should be much, much faster. But I know for sure. How does your pricing structure work? How do you charge for your services? Well, it's pretty simple. It's based on the number of marketplaces that you want to address based on the size of your catalog.

00:22:16:27 - 00:22:39:12
Unknown
And it's a combination of know how many products towards how many channels you want to push. But basically, we have three basic pro and silver, and they have all attached to number of SKUs and a number of marketplaces that you can target. It's very easy for customers to pass from one to the other. And, you know, our our business is to help customer grow.

00:22:39:15 - 00:22:58:08
Unknown
And both in this and we are just you know, it's it's a pure win win situation. Like the more revenue you're going to make over, the more marketplaces you're going to make, the more money we also going to make. Mm hmm. Okay. No, that makes perfect sense. Nicole, before coffee break comes to an end today, is there anything you want to share with our listeners that we haven't covered yet?

00:22:58:10 - 00:23:22:18
Unknown
No. Maybe, just maybe, just a time to say a little bit more about Also, we we haven't touched so much the capacity or the products that we have in the in the competitors analysis of the market analysis, what we call market intelligence. I think it's also very important because once you have a catalog that's uploaded, you can also use that catalog to monitor your competitors by just, you know, looking at the same products that the one you're selling.

00:23:22:21 - 00:23:43:17
Unknown
It can actually be, you know, either, you know, head to head products in the when you're when we are dealing with resellers or it can be equivalent products when we're talking about brands and they want to they want to list a number of products from competitors that they want to monitor. And that's really very, very helpful both to understand the trends of a specific market.

00:23:43:24 - 00:24:15:29
Unknown
And as I mentioned in Europe, from one market to another, you can have some significant differences, but also in order to help you with the best strategy when entering your market on, you know, what type of prices you need to push. If you have to make promotions, Yes. Know how your competitors are operating. So so all of this is really combining to that single suite and I think is a is a is a quite nice quite a nice tool for for our customers, especially those who who wants to learn about Europe before they really put a lot of money into it.

00:24:16:01 - 00:24:38:07
Unknown
I reckon being a European you also have European clients because I remember my time in Europe, it was not so easy to understand what the other's next next door were doing. Is that right? There still are. Still that is still the case. Still the case, especially in those quite difficult political periods where I don't know how you see that from from outside.

00:24:38:07 - 00:24:57:22
Unknown
But right now in Europe. It's very complicated. Mm hmm. I think that's one more reason to work with an expert like you. Laying low definitely helps there a lot. And for our listeners, if you're looking into Europe or if you are even in Europe and you want to expand to other European countries, I would recommend to reach out to have an expert on your site.

00:24:57:25 - 00:25:16:20
Unknown
Makes it so much easier and the chances for success so much higher. Where can people go and find out more about you? Oh, well, first of all you can go through our websites that's WW lingo dot com and they can also contact our our team and we'd be really happy to help them you know go through this journey.

00:25:16:22 - 00:25:29:16
Unknown
Cool I will put the links in the show notes as always then you're just one click away. Nicola thanks so much for your time today and giving us an overview of how important Europe is. I hope a lot of people will reach out to you. I think it's definitely something they should do and I hope to talk to you soon again.

00:25:29:22 - 00:25:31:17
Unknown
Thank you very much, class. Talk to you soon.