Western businesses, especially small and mid-sized businesses, tend to think in ethnocentric terms and unnecessarily restrict themselves to local markets. Unless your business depends upon local customers, such as those who provide medical services or who work in construction, consider expanding your clientele across an ocean or two.
Go where the growth is
“Asia has been blooming into a technology-oriented hub,” reports Women on Business. Today’s technological advancements make global expansion a reality as well as a necessity. With over half the world’s population distributed among Asian countries, ignoring a substantial client pool makes no sense. According to Telstra, “Research suggests that today, forty per cent of global economic activity is now occurring in Asia, and world growth is expected to continue being led by Asia over the next decade.” According to Smart Business, “All the indicators are that China will become the largest economy in the world by 2020, and India the largest by 2030.”
Pick the right strategic location
In locating a branch office or service sector in Asia, be sure to investigate the specific country’s infrastructure. Just because half of humanity lives in Asia doesn’t mean that they have access to reliable power and technology networks. Writing for Smart Business, Roger Vozar notes, Hong Kong and Singapore rank among the top two business-friendly markets with reliable technology access, good legal systems, and strong protection of intellectual property. Therefore, consider locating or offering your services to potential clients in locales where those people can access them.
When you have determined the right location, research the markets and your competition. Do not assume the absence of competition, especially in urban centers like Singapore, Seoul, New Delhi, and Hong Kong. SmartCompany states that “Asian consumers value localised products,” which translates into a consumer preference for customization. Figure out how your product or service distinguishes itself from the competition, whether such distinguishing factors hinge upon comparisons of price, materials, service, etc. Then decide how your products and services can appeal to your preferred consumers.
Follow the law
If you’ll be hiring employees overseas, then pay special attention to the payroll and benefits policies of that country. Some countries, like Hong Kong, mandate employer-paid funds to support employee benefits, others require employment protection for maternity leave. Human resources requirements involve a level of complexity that encourage the involvement of lawyers who specialize in that country’s employment law.
Understand the culture
CEO of Bubbly, Thomas Clayton notes the myriad Asian countries encompass “52 primary languages, 27 different currencies, the highest and lowest GDP per capita, numerous cultures, religions, legal systems, trade barriers, political systems, graft, and many more nuances that are important to consider.” Alex Tsepko corroborate this in his article “The Best Way to Grow Your U.S. Startup Business in Asia.” Before embarking upon an expansion into Asia, he advises deciding where you wish to go first.
Acquire the pertinent data before launching your business to ensure you neither insult your customers now violate any laws. This requires a narrow focus to learn the culture’s etiquette. The best way to learn the culture is to visit the country and stay a good long while. To expedite cultural integration, it’s smart to hire the right local talent. Most Asian countries support trade and professional organizations that can help smooth your foray into business there and refer you to skilled, business-savvy individuals who will help you navigate local markets and government bureaucracies.
Regardless, treat the new culture with respect. Just like a diver entering the ocean, you’re entering the sharks’ world. Learn to swim with them or get eaten.
Understand the risks
Calculate the risks involved: politics, laws, regulations, currency exchange rates, and more. Again, working with an attorney or consultant familiar with the locale who can advise you on what to look for and how to avoid or surmount problems goes a long way toward improving the odds of a successful venture. Consider the potential of a location rather than diving into one already saturated with foreign business to capitalize upon the vast opportunity just waiting for the right spark to ignite explosive growth. For instance, authoritative sources such as Forbes and All Business predict that South Korea—Seoul in particular—will be the next global hub for business in Asia.
Clark & Kent offers a lengthy track record of success in assisting global companies with business expansion into Asia by helping them recruit the best & right leadership talent. With our expertise, you know you’ll hire the best people to represent your business interests. Contact us via email to set up a free one hour consultation with one of the partners.