Sramana Mitra: Google AdWords did exist already. Google AdWords was easier because it wasn’t as competitive and the prices of keywords was lower.
David Menning: That was the main marketing channel in that initial period. There were also a few marketing channels that existed. You may recall comparison shopping was also a big thing back then. You could actually type in a product and see different sellers comparing their products. eBay was also quite strong. It was really through analysis, discipline, and focus on listing and measuring that allowed us to grow over a period of years.
Quite quickly, we also identified that the same demand also existed in other English markets in the world. It was at that point that we set up websites in other English markets such as USA, UK, and New Zealand. That’s a big point of different between ourselves, as Australians, and Americans. In America, the market is so big that if someone is very successful in the USA, that can be satisfactory.
A business can be a $500 million in the USA just on the basis of one market alone. If one target smaller market such as Australia were to get to the same incremental revenue as a US business, one would have to pull together multiple markets. It was that strategy that we applied there. We built a localized English website in multiple English markets around the world. The reason why I mention localized websites is because people also think about, “Can I just have a dot com and still have the same conversion rate?”
Our experience has always been that the customers have an inherent habit to shop on websites from their own countries. Because e-commerce is becoming a little bit more pervasive, people are getting more comfortable to buy from foreign businesses. Going back 10 years, people are still apprehensive about using their credit cards online.
In that context, it’s important that we have credibility with the customer. We did that by building local websites which is on a local domain with a local address so it really offers customers a trustworthy local experience. In doing so, we were able to appreciate good growth in those local markets.
Sramana Mitra: What did you have to do to achieve that? What did you have to put in those markets? Were you handling calls in those markets?
David Menning: That’s a great question. We set the company up, at the very beginning, out of Hong Kong. When we first targeted Australia, we didn’t actually go to Australia and set up a company in Australia. We set up a company in Hong Kong. We were traveling around the world at that time. I was living in Europe. My partners were in Asia. We evaluated how to do this.
We realized that the best way to do this would be to set up a company within Asia. In Asia, the best place for that is either Singapore or Hong Kong. We chose Hong Kong for a number of reasons. Then we were able to set up the Australian website and make the sales through the Hong Kong entity.
When we set up further websites, we were able to keep that same centralized back end but localized the front end. We localized the front end, phone number, and address, but still managed that centrally. That was the game changer in terms of the efficiency of how we’re able to do global trade. A lot of people think that you have to go to the country. That’s not actually the case.