Crossing into international markets
Eric Jan C. van Putten
Venture into new, international markets with the right strategy
The considerations of taking your business across borders is one that will keep many CEO, CSO and CFO busy. On the upside, there are endless chances of expanding the business while divesting the risk of being active in one local market. On the downside, going abroad takes investment. Ranging from figuring out which region to expand into first (often a neighboring country) to making sure that your product and product information is up to date for local market regulation and marketing execution. And don’t forget about your technology setup, is it ready to handle an additional region or is it time to revisit this one as well?
In addition, there is the choice of choosing the best fitting channel(s). Do you go through a local network of partners and/or resellers, or do you choose a direct approach potentially supported via marketplaces. All with their own benefits and downsides.
What doing it right can lead to
Expanding into interterritorial waters can be a daunting decision that often isn’t taken lightly. But making the jump can have a significant impact on the business:
- Expanding market reach & increase sales
The most obvious reason to consider a cross border strategy is that you have a whole market, or plural, that is untapped. Being able to tap into a new potential customer base that can add to profits is something over 80% of ecommerce brands agree with. Every new market you get into will build on-top of the previous ones and this can create a snowball effect that will have your product reach your customers faster.
- Expanding Brand visibility
Building a successful brand often is done on a continental or global scale. Who doesn’t know Coca Cola or Apple. Becoming a global brand, with brand recognition, is one of the biggest opportunities one can have into opening doors into new markets. It can feel a bit like the chicken and egg problem, but when the Brand is there, expanding into new markets will go easier.
- Competitive Advantage
Doing nothing is not an option. If you don’t do it, your competitor will and this will have a negative impact on your business if you are not careful. Being the first will give you the first-mover advantage that will help a thriving business when done right.
Regardless of the type of business, taking steps like these come with preparations. Investigating the market and the best approach in doing so. What channels will we use and what foundation is required to make this choice as successful as possible.
Depending on the business some channel strategies will work better than others. If you are selling a highly complex solution direct 2 consumers going through a marketplace might not be a good fit.
If you are selling a Software as a Service solution that needs customization / implementation a direct online purchase path might be a challenge.
Finding the right channel to fit your offer will absolutely be key. We list the most common ones that we believe fit the audience of this magazine:
- Via partners
This could be via implementing partners of the company, or even retailers in local markets when the product is more easily sold. The benefit of this is that you are able to expand ‘your’ working force relatively rapidly and you have a network of sellers promoting your solution.
Of course, there are costs associated with this strategy, but often this is close to a no-cure no pay structure
Some solutions or products are perfect for direct sales. SaaS solutions in B2B that require no to limited customization are a great example to go direct to your market with. Often borders barely exists for these kind of solutions – only to keep potential local legislation in mind (like how to store the data. Something big solutions like Mailchimp got burned on).
For physical products this channel can also be highly lucrative, but your organization needs to be ready for this. Ranging from shipping abroad to being able to take on all go-to-market activities yourself. From promotion, to selling to fulfillment and handing warranty and customer questions.
- Via marketplaces
There are hundreds, thousands of marketplaces out there that can help you breach new markets. Introduce you in local regions, new types of audiences, help you sell.
Of course they come at a cost, but if you are selling a physical product being able to gain direct access to an audience in a new market has a value. Let alone that some marketplaces, for a price, can also help with fulfillment. Amazon is of course the example to use here, but there are many marketplaces out there for practically all kinds of products. Ranging from software solutions to selling office equipment.
One thing that is key in these is that your product data is of top quality, and you are able to connect this to these channels with ease. Having rich product data will have a direct impact on your ability to succeed.
Role of Technology
With the investments that come with expanding abroad it is often a good moment to reflect if the company’s technology stack is ready for this kind of growth and internationalization.
Are you still communicating in local language throughout the systems? Not a problem if you are expanding from the UK, but if from say Germany or France it might be a challenge. And what about all your product information. All this needs to be translated, updated, managed and distributed in multiple languages. This is where a Product Information Management system (PIM) comes into its own!
Being able to handle rich and accurate product data for local legislation reasons is one thing, but being able to use this for marketing is what can make an expansion truly successful. Connecting this with email systems, or catalog production systems (printed or PDF), or personal printed postcards is what can help boost brand experience and successful market penetration.
Going that extra mile for the best customer, product, commerce experience you can offer.