“It’s a new game out there”: e-commerce in internationalising retail SMEs

Abstract

Purpose: The purpose of this paper is to explore how market factors (pertaining to institutions, competition and resources) shape the international strategies of an online retailer. Design/methodology/approach: A single qualitative case study research design is employed to conduct in-depth analyses of a Swedish internationalising small- and medium-sized enterprise (SME) in the retail business. Findings: The findings show that online retailers can use partnerships to tackle industry dynamics and break into foreign markets. This type of “piggy-back internationalisation” can be an effective strategy of handling foreign market dynamics in the entry phase: that is to say, the short term. Reliance upon relationships, however, may paradoxically inhibit retailers’ abilities to stay competitive in the post-entry phase (i.e. the long term) since they become cut-off from the first-hand market learning. Research limitations/implications: The authors provide propositions based upon the findings to support further research in the international marketing and international retailing literature. Practical implications: The findings enhance the understanding of how electronic commerce affects SME internationalisation. They also generate new insights into the use of possible international expansion strategies for managers in retail SMEs. Originality/value: This study introduces a new theoretical perspective to build upon international retail research and contributes to the international retail literature with relevant insights into both advantages and disadvantages of using partnerships to overcome challenges related to international online retailing.