Asia is becoming an increasingly sought-after market to expand businesses due to several considerable reasons. Recent data from the World Bank shows an increase in GDP growth in Asia of 6.6 percent. Furthermore, China is expected to have $1 trillion in online spending alone by 2019. Asia has approximately 4.3 billion people who live there, making it an astronomically large and untapped market.
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Asia has a fast-developing environment that embraces modern technology and innovation. Tech hubs have sprouted up in Hong Kong, Singapore, Tokyo and other cities in Asia. The government is also incentivizing businesses to expand to the area through relaxed legal requirements and tax breaks.
Asian markets are still in the process of being developed, providing greater opportunities for expanding markets and using marketing strategies targeted for the local audience. Increased urbanization and exemplary infrastructure, it is now easier to tap into these markets.
When making your plan for global expansion, it is important to consider the five topics discussed below.
The Asian Market
When expanding to the Asian market, it is important to understand how various markets operate. It is also important to prioritize the top markets that your company wants to target, including particular countries and cities.
Philippines and Cambodia are some of the most significant growth drivers in Asia. India, China, and Japan represent the largest markets in Asia. Indonesia, Vietnam, and Thailand may represent significant opportunities for various industries. China and India are some of the largest consumer markets and fastest growing economies.
Other countries represent markets that are still in the process of developing that may represent unique opportunities. Sometimes smaller markets may be preferable to larger markets because there may be fewer competitors and more potential for growth, especially for businesses with smaller budgets that cannot compete against conglomerates.
To determine which markets to target, it is important to assess certain metrics, such as:
- GDP per capita
- SMS price points
- CPM in an advertising revenue model
- Internet penetration
- Number of smartphone users
- Social activity
Different companies may weigh some of these factors more heavily than others. Each potential market can be compared using these metrics and then your company can target the top markets based on these assessments.
Your business should focus on each opportunity and assess how you can grow your business based on these available opportunities.
Diverse Talent Market
Asia offers the potential to tap into a large pool of talented employees. When expanding to Asia, it is critical to the success of your business to assemble a talented and dependable group of individuals to form your core regional team.
It often makes sense to hire local employees rather than incurring the additional costs of moving existing team members and dealing with immigration issues.
Local team members will help build and shape your company’s brand in Asia, so it is important to hire employees who are connected to the local market and can provide valuable insight.
Local employees will understand the language, culture, and customs that are important to your new market.
Companies may want to establish partnerships with local Asian partners who can help recruit and identify individuals who can serve as key members of the team.
These partners may also be able to help businesses understand the regulations and laws related to the labor market. Having the right team can help you get a head start in a particular market.
Language and Culture Barriers
One significant obstacle to expanding to Asia is the language barrier. Western countries may not have executives who speak the native language. Additionally, operating in different time zones can be a significant challenge to businesses.
Having professional interpreters and team members who speak the language can bridge this divide.
Another challenge is the cultural gap between your country and the Asian market. Additionally, each Asian country has its own unique culture and ways of performing business.
It is important to adopt local cultural norms when conducting business.
Additionally, there may be cultural sensitivities of which you should be aware to prevent damaging your relationship with stakeholders or from alienating Asian customers or clients. Local stakeholders may be able to help you conduct market research and advise you on marketing efforts that may be more likely to appeal to this audience.
Infrastructure and Funding
It is also important to understand the infrastructure and the possibility for funding in the markets you intend to target.
There is great variance in these factors. Singapore and China offer a significant amount of funding. They also provide solid infrastructures for expanding businesses.
India has also recently realized steady growth in its funding for international businesses. Seoul, South Korea has a rapid start-up ecosystem, based largely on technology and internet-based businesses.
Substantial funding is also available through Vietnam where many investments are being made. Other cities and countries also offer strategic advantages due to the advanced infrastructure and ready access to funding.
Local and International Competition
Before expanding, it is important that you understand the local market. Many companies have realized the tremendous opportunities that Asia represents and have begun expanding to various regions throughout the continent.
Additionally, you may be competing against brands that have been established for a long time and represent a local presence in the country. By concentrating on your target market instead of trying to be present in all markets, you will be much more likely to be successful.
If you hone your focus on a smaller market, you can understand the nuances of the market and what is required to be a successful business in that region. Many of these markets rely on a solid foundation and relationships with key stakeholders.
Emphasize what differentiates your business from others or try to fill in a gap in the market. Your marketing strategy should clearly convey this information. Localize your product by using targeted marketing that emphasizes the specific needs and demands based on the local economy and consumer market.
Expanding your business to Asia is a complex process. However, it can be tremendously rewarding and instrumental to the success of your business.
Learn more about your target market and think deeply on each of the topics discussed above to grow your company in a strategic way.