Retailers are increasingly looking to expand internationally to sustain growth, especially within a strong U.S. economy. According to the National Retail Federation, December figures looks likely to meet or exceed the organization’s forecast for a strong holiday shopping season.

This optimism is prompting businesses to explore new opportunities beyond their borders, and emerging markets are shaping new trends. These regions, particularly the Persian Gulf and Latin America, offer expanding consumer bases, rising disposable incomes, and a shift toward online shopping habits, making them fertile ground for growth. However, the allure of these markets isn’t without hurdles. 

Setting up operations in a new country involves overcoming regulatory complexities, ensuring compliance with local laws, and tailoring strategies to unique cultural and economic landscapes. It’s not just a set-it-and-forget-it situation with compliance — legislation is set to change in several regions, and not all at once. For instance, Mexico announced a new policy to end “border skipping” in mid-December, which took effect immediately. More changes are likely later this year, affecting how goods are shipped globally.

Markets on the Rise

In the Persian Gulf region, countries like Saudi Arabia and the United Arab Emirates (UAE) are increasingly becoming focal points for global trade. In 2023, the U.S. exported more than $24.8 billion in goods and services to the UAE, a 19% increase over the previous year. This surge reflects the region’s growing consumer base, fueled by high disposable incomes and favorable economic policies. Additionally, the adoption of delivery duty paid (DDP) solutions has streamlined the shopping experience for consumers, eliminating hidden fees and encouraging more cross-border transactions. Gulf governments are also prioritizing economic diversification, creating more incentives for foreign investment and retail activity.

In LATAM, e-commerce is projected to grow by 20% annually, highlighting immense potential for businesses willing to invest in the region. Argentina, for instance, has introduced significant reforms to its duties and taxes, making it more affordable for local consumers to purchase goods internationally. These changes align with the growing demand for affordable fashion, electronics, and other consumer goods. 

Meanwhile, despite issuing new tariffs, Mexico’s economy remains an essential gateway for U.S.-based retailers. The region’s youthful, tech-savvy population is driving the adoption of e-commerce platforms, further enhancing the appeal of these markets. According to the Statista Digital Market Outlook, the number of e-commerce shoppers in Latin America is forecast to grow by 52% in the next four years, to 419 million. 

Regulatory Hurdles to Clear

Navigating the complex regulatory landscape in emerging markets is a critical challenge for businesses. Mexico’s new tariff rules, aimed at limiting imports from China, have introduced additional layers of compliance for retailers. Goods originating in China, even components of a larger product, face heightened scrutiny, which can disrupt supply chains. Similarly, the growing requirement for consumer tax IDs in LATAM countries has led to delays at customs, and has forced retailers to reassess their data collection practices. 

Another pressing issue is the evolution of harmonized system (HS) codes. While most countries have traditionally used six- or eight-digit codes, Saudi Arabia has 12-digit codes, increasing the need for documentation accuracy. These changes necessitate significant updates to retailers’ systems and workflows, often requiring dedicated teams or specialized consultants. Businesses must also account for varying restrictions on certain goods, particularly where cultural and legal considerations play a significant role in determining what can be imported.

Expanding with a Plan

Staying ahead of regulatory changes is paramount, particularly if the market is unfamiliar. Investing in partnerships with logistics providers and legal experts who specialize in local markets can ease the burden. For example, implementing technology solutions to capture consumer tax IDs during the checkout process in countries such as Mexico and Chile can minimize customs delays and enhance customer satisfaction.

Localization is another key strategy. Tailoring websites to reflect the language, currency, and available inventory for the region can drive customer engagement and reduce cart abandonment. Simply relying on a translation tool may not be enough; translated English words or phrases may carry a different meaning in a different language. Retailers should also assess their product offerings to ensure they align with local preferences and comply with regulations. Proactively identifying restricted items and adapting product listings for each region — including the proper language so products aren’t miscategorized — can prevent costly delays and penalties.

Ensuring that data collection processes align with local privacy laws has also become an essential component of compliance. By proactively addressing these obstacles, businesses can mitigate risks and avoid supply chain disruptions, strengthening their foothold in these competitive markets. If done right, the investment in expansion creates a positive experience that makes first-time buyers repeat customers.

Thriving in these markets demands a willingness to reimagine operations, from sourcing strategies to customer engagement. It’s about building a presence somewhere with a new set of rules and staying agile in the face of regulatory shifts. As we begin a new year, the narrative of global commerce is that growth will continue. Emerging markets, especially in Asia, Africa, and Latin America, are expected to benefit from the growing adoption of e-commerce, fintech, and mobile-based solutions that improve access to goods, services, and financial systems. For those ready to act decisively, emerging markets promise to fuel that growth, and play a pivotal role in the evolving global economy.

Helaine Rich is vice president of strategic sales and administration at ePost Global.