Market Expansion: Is Your Company Ready For Asia?
Asian growth will significantly outperform the rest of the world and its own wealth is growing: the region is no longer simply the producer of goods for western consumers, its own booming middle class is fuelling strong domestic consumption.
Let’s have a look at some statistics:
- Asia is expected to reach more than 50% of global growth by 2045*
- It is a leading economy after Covid-19*
- 4/10 consumers in the region are likely to buy from a strong entrant in the market*
- It is a safe investment for the retail market thanks to its rising purchasing power
These are just some of the reasons why you should think about investing in Asia, however, it’s no easy feat to enter a new market, especially one that is not only physically but also culturally distant. In order to be successful, businesses must be well-prepared and ready to invest time, money, and energy.
Here are some tips on how to plan your international expansion.
Choose your format
Going East can be a very costly exercise and SMEs generally have limited budgets when it comes to investing, so the first step is to decide which business entry model is right for you.
Opening a subsidiary is certainly the most straightforward option and will give you full control over your operations and brand, but is it also the most expensive and time-consuming.
Remote management is more affordable than setting up a new entity in Asia, however, it slows down the day-to-day activities and does not offer market-know how.
Opting for an agency has been the go-to choice for many companies in the past. It is affordable and fast, but the downside is that normally agencies will not work on establishing your brand for the long run and ensure correct brand positioning. As they work on commission, they are likely to sell your products to anyone who is willing to buy them. This can bring you some pleasant short-term results, however, in the long run, this will hurt your brand and cause market confusion.
The last option is to find a retail partner that will support you through your internationalisation journey by running your operations in Asia while providing valuable market knowledge and an experienced local team.
Since 2013 Texere has assisted brands in driving a sustainable retail expansion in strategic markets, specialising in lifestyle consumer goods, fashion, and food.
Instead of tackling an unknown market full of peculiarities and hidden rules, a collaboration with a partner who knows the inner dynamics and has an established network of distributors across the region can help the brand with faster yet sustainable market penetration.
Texere helps brands in taking care of the below activities:
- Creation and implementation of an omnichannel strategy for Asia based on the brand's product, branding and pricing
- Sourcing and management of suitable distributors
- Management of regional business development activities
- Coordination of localised digital and offline marketing activities
- Local Ecommerce set-up and management
- Advisory to HQ on market challenges and other issues
Acknowledge That Results Are Not Immediate
Entering a new market takes time and adjustment, you have to develop a localised strategy for each market and start brand awareness activities.
You should be aiming at establishing your brand, instead of looking for a quick sale to any distributor. Finding a suitable distributor in each market, who will ensure the right positioning and price strategy, is not an easy task. Additionally, distributors need to be constantly supported with marketing and promotional materials/ideas, updates on new releases and supported in terms of monetary contributions. Brands also need to ensure that their marketing investment is utilised/optimised well, and that the marketing activities are in line with the overall brand direction.
Growing your brand will take time, and will pay off - you just need to be patient and invested.
Be flexible and competitive
Today’s customers are well-informed, impatient and understand quality very well. When you start your expansion, ensure that:
- You have a global pricing strategy
- Your domestic e-commerce is working in accordance with your agreements with international distributors
- You have a solid supply chain
- You are prepared to adjust your products based on different market needs (sizes, colours, limited editions, etc.)
Be consistent and present on local platforms
Once you have the right distributor, they will usually take care of the local activities and will know the best ways to attract and engage with customers. However, you need to ensure your branding and promotions are consistent, and that you have control over your brand by registering your domains, patents (when necessary) and own your official accounts (WeChat, little red book, Instagram, etc.)
Invest in Marketing
Although distributors will suggest marketing activities, they are less likely to invest in marketing activities on your behalf. You should budget 10-15% of your expected sales forecast for localised marketing. This will ensure you gather the proper brand awareness.
Additionally, you should develop your marketing campaigns with a global mindset and ensure they are diverse and inclusive, so that international customers can relate to your products.
These are just a few tips that you should consider before venturing into a new market. Texere can help your brand to create and scale its international presence.
Reach out today for a free consultation at info@texereadvisors.com
Sources
https://commit-global.com/entering-a-new-market-3-tips-for-smart-budget-allocation/
(https://www.blackrock.com/au/intermediaries/ishares/thematic-investing/rise-of-asia)
*https://link.springer.com/article/10.1007/s10290-010-0062-x
*1(Oxford economics forecasts, Refinitiv Datastream, Pictet Asset Management. As of November 2020)
*https://www.forbes.com/sites/afdhelaziz/2020/06/17/global-study-reveals-consumers-are-four-to-six-times-more-likely-to-purchase-protect-and-champion-purpose-driven-companies/
*https://www.mordorintelligence.com/industry-reports/asia-pacific-retail-industry