Compared to the homogeneous United States market, operating and expanding a business across Europe can be a complex undertaking, given the different regulations, languages and cultural nuances specific to 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 instances where a specific regulation applies to a specific category in a given country [or] one country has a different tax rate per product category,” Olivier Buffon, head of international at U.S.-based online wholesale marketplace Faire, told PYMNTS in an interview.
The cross-border, business-to-business (B2B) marketplace launched in 15 European countries last year — 16 now, with the recent addition of Portugal — and according to Buffon, tackling the Europe challenge has meant putting local teams in place to maximize compliance with laws and regulations specific to each country or city they operate in.
Adapting to country-specific payment methods across the region — such as France’s local card network carte bancaire, PayPal and cash payments in Germany or the Dutch online payment system iDEAL — has also been critical to Faire’s regional growth.
Buffon said integrating with these payment methods was one of the company’s main priorities in the first six months of its European launch, and it is committed to adding new payment methods to the platform to meet the needs of retailers in the region.
Read more: Cross-Border Wholesale Marketplace Faire Nets $400M on $12.4B Valuation
Founded in 2017, the San Francisco-based wholesale marketplace connects more than 60,000 independent brands to 400,000+ local retailers around the world, aiming to empower and equip these small businesses to compete with large eCommerce players and retail giants.
Last year alone, brands’ sales volumes exceeded a billion dollars, showing the success of Faire’s business model. Following a significant $400 million Series G raise in November 2021 that brought its total funding to more than $1 billion, the firm’s valuation now stands at over $12 billion.
See also: Faire’s Fundraise Pushes Valuation To $7 Billion As Independent Retail Recovers
US Market Within Easy Reach
According to Buffon, many of the brands and retailers in Europe have high-quality products and align with the mission and values of Faire, so expanding to the region was “only a matter of time.”
Feedback from European brands and retailers looking to access the U.S. market also made it an attractive opportunity for the wholesale marketplace to grab market share from local competitors in the region.
“If you’re a European brand, getting access to the U.S. market through Faire is a huge advantage because it’s often a challenge to find the right distributor or the right ways to access the [U.S.] market,” Buffon explained.
The fact that joining the online marketplace immediately opens the door to 300,000-plus retailers in the U.S. alone also seems to have caught on with European brands, which generated sales volume of $150 million during the first six months that Faire launched in the region.
In addition to facilitating global distribution, the online marketplace enables merchants to purchase merchandise from an unknown brand, test products over a 60-day period and, based on the customer feedback, choose to either pay or return the merchandise to Faire.
“That’s completely unique, completely unheard of in the world of wholesale,” Buffon argued, adding that small retailers are also given 60-day payment terms, an attractive deal that was previously reserved for only large retailers.
Sustainability, Not Sold on Amazon
With thousands of goods and merchandise on the online marketplace, retailers are spoiled for choice when deciding on which brands to work with, which is why Faire has made filters available to narrow down the selection.
According to Buffon, one of the most popular selection tools merchants have been using is the one that eliminates goods that are sold on Amazon, an indication of the “very strong appetite for more curated, more high-quality selection.”
Another growing trend he highlighted is tied to sustainable retail and the increasing desire to support independent brands and local retailers, a phenomenon which has gained traction since the start of the pandemic.
Making sure that Faire tailors its business to these trends will be a key focus moving 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 will include providing warehousing options, tax management or striking deals with carriers around the world to make sure Faire’s clients have the best shipping deals and terms on the market.
Although operating a business across Europe can be an uphill battle, with factors like Brexit adding further complexity into the business operations, Buffon said the opportunity to capture market share with a holistic solution far outweighs the challenges involved.
“[The retail sector is] a very large industry. It’s often underestimated because there are a lot of small players, but it’s a very large one and we want to be the comprehensive operating system there,” he said.
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