Five Key Considerations For Businesses To Focus On When Expanding To Asia
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Asia is the most diverse continent on the planet with each country and culture vastly different from the next. It is also one of the most sought-after consumer markets for global businesses. However, with extremely heterogeneous markets and business environments, selecting the countries or specific regions can be a massive challenge for many businesses. It usually takes extensive market research and assessment of the prevailing conditions for firms looking to enter the market. While large corporations and companies have vast resources at their disposal, smaller businesses looking to create a footprint may find it tougher to know where to start.
Here, then, are five key considerations for businesses looking to create a footprint in Asia:
When foraying into the Asian market, it is crucial to understand how the market in various countries operates. In addition, a business must also focus on the nature of each opportunity pertaining to its industry, and assess how it can effectively further its growth objectives through the available opportunities. Within Asia, the regions of South, Southeast, and East Asia comprise some of the fastest growing, as well as developed, economies in the content.
Most countries in Southeast Asia are growing economies with the exception of Singapore. Countries like Indonesia, Philippines, Cambodia, Vietnam, and Thailand present a huge opportunity for businesses across various sectors, thanks to growing urbanisation and increasing economic growth. Philippines and Cambodia, in particular, are among the most significant growth drivers in Southeast Asia. China and India are among the fastest growing economies and consumer markets in South Asia, while Japan and South Korea in East Asia are developed.
One of the key benefits of expanding to the Asian market is the vast and diverse talent market which businesses can leverage to achieve their expansion goals. Companies starting their business often prefer to tap the local market to avoid the costs associated with bringing employees from their home country and training them in the business culture, languages, and customs. Picking the right set of experts within the country can help a business get the head start they want in the particular market. Experienced professionals and domain experts from within the local market have a better understanding of the industry and business ecosystem as well as the regulatory and legal environment in their respective countries. This is always a plus when expanding internationally and more so in Asia.
Most markets across various regions of Asia are characterised by copious competition. However, a business offering a clear differentiation or filling a specific gap in the market can be successful with the right market strategy. Furthermore, it is also crucial to localise your product when foraying into any country in Asia, since each market has its specific needs and demands based on the nature of the economy and consumer market.
Infrastructure and Funding
Countries like Singapore and China have well-organised business ecosystems, with a significant amount of funding, and advanced infrastructure for global businesses. India also has a booming start-up and tech ecosystem that is seeing steady growth in both fundings as well as in its digital economy. Seoul in South Korea is a major global business hub with a rapidly growing start-up ecosystem and is touted as the next major hub in Asia for the technology industry and internet businesses. The Vietnamese tech industry has recently risen to global prominence and is growing exponentially with a significant amount of investments pouring into the rapidly developing country. Manila and Kuala Lumpur in Philippines and Malaysia are also among the fast-emerging start-up hubs, with a growing number of early-stage ventures making great waves.
Culture and Language Barriers
Different countries across Asia have different cultures and practices when it comes to doing business. To create a footprint with your business in Asia as well as cultivate lasting relationships with various stakeholders, it is imperative that organisations adopt the way of doing things in the local market. The practices accepted in the west or other parts of the world may not be as well-received by countries in Asia, while at the same time, organisations need to be mindful of the cultural sensitivities in the way they communicate with partners, clients, customers, the government, etc.