When a business experiences huge levels of growth in one market, the next logical step is to eye up opportunities in other markets.
However, the strategies that allow for a company to experience huge growth in one market don’t automatically translate into success internationally. This article looks at ten things to consider when expanding overseas to increase the likelihood of global success.
Things to consider – a checklist for expanding start-ups
Do your research first
Don’t expect the strategy you currently use to translate into overseas success. Your target country may need a different approach entirely, so investigate other, similar, brands to find out how they approached their international expansion.
The most important aspect of this is how you position your brand in the new market. For instance, your product may be priced competitively in your domestic market, but considered a luxury, high-end investment elsewhere. If that’s the case, you’ll need to adapt your marketing communications accordingly and localise them for the new market expectations. As well as tariffs on imported goods, restrictive quotas, and other government regulations regarding foreign trade – you need to pay attention to laws regarding consumer protection to ensure your product is priced and promoted in line with local market conditions.
Consult a lawyer about the local regulations
The last thing you need is to run into problems because a consumer’s rights are protected but yours as an importer are not. In a perfect case study for what not to do, the online accommodation website Airbnb had to pay a fine last year after finding out that its business model didn’t comply with Spanish laws concerning holiday lettings whereby visitors are required to pay the Catalan tourist tax of 0.65 euro ($0.76) per person, per night.
Find out about local employee rights
The employees you recruit will have a huge impact on the success of your overseas operation so it makes sense to employ the best people and incentivise them to succeed. This could involve giving some of them a stake in your new venture or a directorship.
But think about the issues that might arise on termination when appointing someone. Consider what’s involved with transferring or removing any directorships, bank mandates or powers of attorney that you may have granted your new employee before bestowing these upon staff members.
Try to bring in some user testing groups from the target country
Many newly-expanded eCommerce sites find that customers browse the products but don’t proceed to buy – you want to make sure that they aren’t put off by a clunky payment process that doesn’t fit with what they are used to.
Transcreate your content
Consider transcreation for your marketing campaign. Rather than bringing in a translator to translate your website content verbatim, consider a transcreation team. Transcreation experts do more than a literal translation of your sales pitch, they use insider knowledge of the local markets to adapt your brand to suit local tastes. McDonalds sometimes choses not to translate its famous tagline ‘I’m lovin’ it’ in countries with a high levels of English literacy such as Denmark and Sweden. It takes specific local knowledge to understand how branding and language intertwine.
Check out the competition
Read the reviews about local brands similar to yours on websites like Amazon. Local reviewers will be able to tell you exactly what they think of products like yours, including what is missing from existing products available to them. This will help you to identify what is missing from competing products and you may be able to pitch your range at the local market as a solution for this gap.
Have a plan for future expansion
If you’re planning to create a localised website, it may be easier to factor in future target markets as you develop your localised offering. For example, you may start with a French website with products in Euros but you may also consider including add-ones for other currencies and payment methods as you expand into other regions over time. When selecting your technology platform, ensure that it as the ability to support your efforts beyond the specific target market.
Make sure that your finances can handle a slow start
It may take time to build awareness of your products abroad so expect a loss to start with. You need to calculate exactly how long your business can sustain a loss if business is slow, including the various investments you will have to make to boost sales. It helps to start with a really solid domestic foundation but knowing exactly what kind of a financial risk your business can shoulder will give you a timeline for expansion.
Monitor progress
As well as preparatory market research, make sure you monitor progress throughout your expansion. Set yourself achievable goals – these may be about raising awareness of your brand rather than actual sales. Use data analytics tools and user research to keep an eye on how users are finding your products and what they think of your brand. Staying in tune with your customer will help you adapt if your expansion isn’t working.
Consider the logistics
It’s one thing to get your website translated and localise your campaigns, but what about moving products? Do you have the right infrastructure in place to support deliveries? Once the orders start coming in, you may need to move product between countries and hire locally to do so. The last thing you want is to achieve sales and have your supply chain disrupted. You may need to set up several different stages for storing and despatching throughout your expansion process.
Moving a start-up overseas is neither easy nor straightforward but it can be a great way to access a whole new market of consumers. The main thing to remember is to get access to local knowledge and the right global team in place to support your expansion overseas. As a start-up your business is less shackled by existing ways of doing business that can hold back more established companies. Take advantage of that nimbleness by venturing overseas with the above approaches in mind.