Which Markets to Target First
The temptation when considering international expansion is to go big immediately — US market, EU market, global rollout. The reality of operational complexity argues strongly for a more measured approach.
For UK-based e-commerce brands, a logical expansion sequence:
| Market | Priority | Why | Key Consideration |
|---|---|---|---|
| Ireland | First | Same language, low shipping cost, EU VAT simplicity | Relatively small market volume |
| Germany | Second | Largest EU e-commerce market, high spending power | Requires German language feed; returns culture is demanding |
| France | Third | Second-largest EU market, English acceptable for many categories | French language feed strongly recommended; local fulfilment advantageous |
| Netherlands | Third/Fourth | High English proficiency, strong online shopping adoption | bol.com competition strong in many categories |
| Australia | Later stage | English-speaking, strong online retail culture | High shipping costs from UK; significant time zone operational challenge |
| United States | Later stage | Largest English-language market globally | Intense local competition; high shipping costs; customs/duties complexity |
EU VAT OSS
Since 2021, the EU One Stop Shop (OSS) scheme simplifies VAT registration for UK brands selling to EU customers. You register once with HMRC's OSS registration and file one return covering all EU sales — eliminating the need for individual country VAT registrations up to your threshold.
Feed Requirements Per Market
Each country in Google Merchant Center requires its own product data configured for local conditions. Key requirements:
Language
EU markets strongly prefer (and often algorithmically reward) feeds in the local language. This is a translation requirement, not just currency display. For major markets like Germany and France, machine translation is a starting point but professional review of key product categories significantly improves performance.
Currency and Pricing
Prices must be in local currency. Google Merchant Center's automatic currency conversion is not acceptable for shopping feeds — you must provide actual local pricing. This means:
- Setting local prices that reflect your target margin after currency exchange costs
- Incorporating an exchange rate buffer (2–5%) to protect against currency volatility
- Adjusting for local price expectations — German consumers may expect different price points than UK consumers for the same product
Tax Handling
In the EU, prices must be shown inclusive of VAT (which varies by country: Germany 19%, France 20%, Netherlands 21%). Google Merchant Center includes tax configuration tools — ensure your feed passes gross prices for EU markets.
Shipping Configuration
Merchant Center requires accurate shipping cost templates per country. Google uses this to show accurate total cost in shopping results — and inaccurate shipping data is a policy compliance risk. Calculate your actual carrier rates per country before configuring.
International Shipping Costs and Margin Impact
International shipping costs are the most significant margin risk in cross-border e-commerce. They must be factored into your ROAS targets for each market.
| Destination | Typical Small Parcel Cost (from UK) | Margin Impact (£100 order, 40% margin) |
|---|---|---|
| Ireland | £4–£8 | −4 to −8pp on contribution margin |
| Germany / France / Netherlands | £8–£14 | −8 to −14pp on contribution margin |
| Spain / Italy / Belgium | £10–£18 | −10 to −18pp on contribution margin |
| Australia | £18–£35 | −18 to −35pp on contribution margin |
| United States | £15–£30 | −15 to −30pp on contribution margin |
Recalculate Break-Even ROAS Per Market
A product with 40% contribution margin in the UK (break-even ROAS 2.5×) may only have 26% contribution margin in Germany after £14 shipping cost on a £100 order — raising break-even ROAS to 3.85×. Using UK ROAS targets for international campaigns is a guaranteed margin leak.
Local Fulfilment Solutions
For markets generating significant volume, local or regional fulfilment dramatically improves economics. Options:
- European 3PL partners — Pick-and-pack services in Germany, Netherlands, or Poland. Typically adds £1–£2 per order handling but saves £6–£10 per order in cross-border shipping.
- Amazon FBA Europe — Pan-European inventory placement with Prime delivery. High fees but very competitive delivery proposition.
- Local warehouse — Only viable at significant volume (typically £500K+ annual revenue in that market).
Currency and Exchange Rate Management
Currency exposure is an often-underestimated margin risk in international e-commerce. A GBP/EUR exchange rate move of 5% (which is not unusual over a 6-month period) directly impacts your effective margin on EU sales.
Pricing Strategy
- Set prices in local currency at your target margin, not by converting GBP prices
- Build in a 3–5% exchange rate buffer above your minimum margin requirement
- Review pricing quarterly and adjust if rates have shifted more than 5%
ROAS Target Currency Alignment
Your Google Ads ROAS is calculated in local currency. Ensure your break-even ROAS calculations use local currency margin (after converting supplier costs at current exchange rate), not GBP margin converted at today's rate.
Hedging for Scale
For brands generating £500K+ in a single foreign currency, a simple forward exchange contract (FX hedge) through your bank locks in your exchange rate for 3–6 months, eliminating the margin volatility from currency moves. Typically costs 0.5–1% of hedged value — worth it at meaningful scale.
Local Competition Research
Competition intensity and price positioning vary significantly between markets. Entering a new market without understanding local competitive dynamics is a common cause of poor international performance.
Research Checklist Before Launching
- Google Shopping preview — Use Google's ad preview tool set to the target country to see current Shopping results for your key product searches
- Price comparison — Compare your planned local pricing to the top 10 results. If you're 15%+ above market average, expect low impression share
- Local marketplace presence — Check Amazon.de, bol.com, Zalando (fashion), Fnac (France) for your product categories. These are your indirect competitors in Shopping results
- Local brand presence — Are there strong domestic brands in your category with significant recognition? These will outperform on brand searches and loyalty
- Delivery expectations — Check what delivery speeds and policies market leaders offer. German consumers expect next-day delivery as standard; matching this from UK is often impossible without local 3PL
Starting Small and Iterating
The optimal international launch strategy is controlled and phased. Committing full catalogue and full budget to a new market on day one is high risk — you don't yet know what will work locally.
Phase 1: Market Test (Month 1–2)
Launch your top 50–100 SKUs by margin tier in the new market with conservative budgets. Objective: establish conversion tracking, understand true local shipping costs and delivery experience, and identify if there's genuine demand for your products at your price points.
Phase 2: Optimisation (Month 3–4)
Analyse which products perform in the local market. Some categories that perform strongly in the UK may be less relevant locally, and vice versa. Optimise bids, feed titles, and pricing based on actual conversion data.
Phase 3: Expansion (Month 5+)
Once positive ROAS is established, expand product coverage incrementally. Increase budgets on proven performers. Consider local fulfilment options if monthly revenue in the market justifies it.
Minimum Viable International Launch
Test budget: £500–£1,500/month per new market is sufficient to validate demand. Run for 8 weeks before making go/no-go decisions. Measure ROAS against your market-specific break-even threshold — not your UK target.
Frequently Asked Questions
Which markets should I target first for international Google Shopping expansion?
For UK-based brands, the most natural first expansion is Ireland (same language, EU access), followed by Germany, France, and the Netherlands in Europe. Australia and the US are strong English-language markets but have significant shipping cost implications for UK brands. Start with proximity and cultural alignment.
Do I need a separate product feed for each country?
Yes — each Merchant Center account or sub-account requires a country-specific feed with localised currency, language (for EU markets), and pricing. Google requires accurate local pricing, not just currency conversion of your UK prices.
How does international shipping affect my ROAS targets?
International shipping costs are typically £8–£25 higher per order than domestic, depending on destination and carrier. This directly reduces contribution margin per sale, raising the ROAS needed to break even. Always recalculate break-even ROAS for each target market using local fulfillment cost estimates.
How should I handle currency and exchange rate risk?
Set prices in local currency (not FX-converted GBP) to compete effectively. Build in a currency buffer (2–5%) to account for exchange rate fluctuations between your supplier costs and local sale prices. Review pricing quarterly and adjust if exchange rates shift more than 5%.
How do I research local competition before entering a new market?
Use Google Shopping preview in the target country, research local competitors on their domestic Google Shopping results, compare pricing to ensure your offer is competitive, and check local marketplaces (e.g. bol.com in Netherlands, Amazon.de in Germany) for category price norms.
Next Steps
International Google Shopping expansion is one of the highest-leverage growth opportunities for established UK e-commerce brands. The key is treating each market as a separate business unit with its own cost structure, competitive dynamics, and ROAS targets.
Manage Multi-Market ROAS Targets Automatically
GROW Platform supports multi-market Google Shopping campaigns with per-country cost configurations, allowing different ROAS targets per market based on local fulfilment costs and pricing. Create an account to get started →
