Compared to the homogenous market of the United States, operating and expanding a business across Europe can be a complex endeavor given the different regulations, languages and cultural nuances of the countries in the region.
There are even times when the fragmentation goes beyond the country level to the city or even category level, further complicating the operational process.
“There are cases where a specific regulation applies to a specific category in a specific country [or] One country has a different tax rate per product category,” Olivier Buffon, head of international at US online wholesale marketplace Faire, said in an interview with PYMNTS.
The cross-border business-to-business (B2B) marketplace launched in 15 European countries last year — now up to 16, with the recent addition of Portugal — and according to Buffon, tackling the European challenge meant deploying local teams to maximize legal compliance and regulations specific to each country or city in which they operate.
Adaptation to country-specific payment methods across the region – such as B. France local map network card bankairePayPal and cash payments in Germany or the Dutch online payment system iDEAL – was also crucial for Faire’s regional growth.
Buffon said integration with these payment methods has been one of the company’s top priorities in the first six months of its European launch, and it is keen to add new payment methods to the platform to meet the needs of retailers in the region.
Continue reading: Cross-border wholesale marketplace Faire posts $400 million in net profits at a $12.4 billion valuation
Founded in 2017, the San Francisco-based wholesale marketplace connects more than 60,000 independent brands with over 400,000 local retailers around the world, with the goal of empowering and equipping these small businesses to compete with big e-commerce players and retail giants.
In the last year alone, the sales volume of the brands exceeded one billion dollars, which shows the success of Faire’s business model. The company is now valued at over $12 billion following a significant $400 million Series G raise in November 2021 that brought total funding to more than $1 billion.
See also: Faire fundraising pushes valuation to $7 billion as independent retail recovers
US market within reach
According to Buffon, many of the brands and retailers in Europe have high-quality products and align with Faire’s mission and values, so expansion into the region was “only a matter of time.”
Feedback from European brands and retailers seeking access to the US market also made it an attractive opportunity for the wholesale market to gain market share from local competitors in the region.
“If you are a European brand, access to the US market via Faire is a great advantage as finding the right distributor or access channels is often a challenge [U.S.] market,” Buffon explained.
The fact that joining the online marketplace instantly opens the door to over 300,000 retailers in the US alone appears to have caught on with European brands as well, which reported sales volume in the first six months that Faire launched in the region of 150 million US dollars.
In addition to facilitating global distribution, the online marketplace allows merchants to purchase goods from an unknown brand, test products for a 60-day period, and either pay or return the goods to Faire based on customer feedback.
“This is completely unique, completely unheard of in the wholesale world,” Buffon argued, adding that small retailers also get 60 days credit, an attractive offer previously reserved for large retailers only.
Sustainability, not available on Amazon
With thousands of goods and merchandise on the online marketplace, retailers are spoiled for choice when deciding which brands to work with, which is why Faire provides filters to narrow down the choices.
According to Buffon, one of the most popular selection tools merchants have used is the one that eliminates merchandise sold on Amazon, indicative of a “very strong appetite for a more curated, higher quality selection.”
Another growing trend he highlighted is linked to sustainable retail and a growing desire to support independent brands and local retailers, a phenomenon that has gained prominence since the pandemic began.
Ensuring Faire adapts its business to these trends will be a focus going forward, he said, as part of Faire’s goal is to offer a comprehensive operating system that solves all the pain points of small businesses across Europe.
This includes providing warehousing options, tax management or agreements with carriers around the world to ensure Faire’s customers receive the best shipping deals and terms on the market.
While running a business across Europe can be an uphill struggle, as factors such as Brexit add complexity to doing business, Buffon says the opportunity to gain market share with a holistic solution far outweighs the challenges involved.
“[The retail sector is] a very big industry. It’s often underestimated because there are many small players, but it’s a very big one and we want to be the comprehensive operating system there,” he said.
——————————
NEW PYMNTS DATA: 57% OF CONSUMERS PREFER ADVANCED ID VERIFICATION AFTER TRYING IT
About:Fifty-seven percent of consumers who used advanced ID verification methods like voice recognition to contact customer service say they would do it again. The Consumer Authentication Experiences report surveyed nearly 3,800 U.S. consumers to learn how offering innovative verification experiences helps businesses deliver great customer service across all channels.
