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Growing beyond borders: 9 tips for international expansion

Business Next

When my co-founder, Fiona and I started SHOPLINE in 2013, we were fascinated by the potential of e-commerce and online marketplaces. With digital penetration rates rapidly increasing across the Asia Pacific region, we knew it wouldn’t be long before the trends of the West made their way to the East – and perhaps, with even greater force.

But I’d be lying if I said we imagined SHOPLINE would turn into what it is today. Our original concept was to create an online marketplace for Hong Kong businesses – yet in a few short years, our business shifted to become a smart commerce solutions provider, as opposed to a web-builder platform.

We branched into omnichannel and point-of-sale services to offer a more holistic shopping experience. Meanwhile, as of 2019, we have offices in Hong Kong, Taipei, Shenzhen, Ho Chi Minh City and Kuala Lumpur– and are even providing our merchants with the opportunity to expand into global markets.

We’d considered international expansion from as early as 2014, when we were selected as a member of the 500 Startup accelerator in Silicon Valley. After all, in our increasingly interconnected world, it only makes sense to think cross-borders.

But the prospect of expanding beyond your native market is daunting – particularly as a startup or small business. How do you know when the timing is right, or where to go? And how do you sustain momentum once you’re there?

Asia Pacific markets also present a unique challenge. Unlike Europe, which is united by regulatory frameworks, currency and is overall digitally mature, while APAC is fragmented. Our consumer habits, cultures and currencies are all different. Even the biggest multinational companies can struggle when entering the region because you cannot have a one-size-fits-all solution.

But then, it’s therein that lies opportunity. Startups and SMEs on the ground are more nimble, agile and culturally aware, leaving them better poised than the giants to charge ahead. Look no further than Grab’s successes against Uber. Internationalisation could well be your chance to beat competitors to the punch.

Based on our own experiences —both good and challenging – and the lessons we learned along the way, here are some tips I’d like to share for going global.

Learn everything about your new market

For each of our international office launches, there was a significant amount of preparation we undertook, including identifying local market needs, conducting foreign market research, and structuring a business plan while staying flexible to adjust product features and adapt to local customer needs.

1. Listen to your customers
When Fiona and I first launched the business, we would search for potential leads on Instagram to introduce our services, and ask questions on how we could better support their growth ambitions. We wanted to involve them in the shaping of our business and ensure they felt like they were part of the SHOPLINE story.

To this day, we still engage with our customers on a 1:1 basis to get their thoughts on what our next steps should be – this should go for any business pursuing aggressive growth. Listen to your customers and get feedback, treat them as collaborators and partners, and take the time to understand their challenges. It may sound obvious, but it’s easier said than done. It requires a close relationship and time commitment.

Indeed, one of the reasons we eventually chose to expand our global footprint was based on feedback from our merchants, who wanted to seek cross-border opportunities. My advice is to stay humble and have your customers’ interests at heart, eventually, you’ll be able to find that perfect slot.

2. Conduct research and watch carefully for opportunities
In SHOPLINE’s case, the opportunity was clear. We know there’s a wave of rapid digital penetration in the Asia Pacific market, which in turn makes having an online presence a necessity–not a nice-to-have.

For example, in Malaysia where we most recently expanded, the government has ambitions to double e-commerce revenues, which would see the industry contribute up to RM$21.1 billion (US$5.1 billion) in GDP by 2020. To achieve this, the government has offered a tax exemption for products valued under RM500 (US$120) and loosen the restrictions on B2C import items. And as a transportation hub for Southeast Asia, Malaysia is expected to lead the development of cross-border e-commerce in other ASEAN markets.

However, according to the Department of Statistics (DOSM), little over a third (37.8 per cent) of Malaysian organisations have a web presence. This is a big gap that needs filling.

3. Consider your cultural fit
For your first international venture, it’s also worth keeping in mind your own heritage. Selecting the right market is perhaps the most challenging task in the process. Blindly investing in new markets is a huge risk. So I’d always recommend selecting countries that share a similar background to your home market, in terms of language or culture.

In our case, we first expanded from Hong Kong to Taiwan. Our shared traits and market characteristics helped with lowering the barrier to entry and gaining an effective understanding of how to nuance our products and services for local merchants.

4. Localise your product offering
Of course, there are still many differences between Hong Kong and Taiwan – not least of all, in terms of language. So you can’t expect to offer the exact same service and product wherever you go, especially if you want to demonstrate how much you value your customer relationships.

As such, be ready to adapt your offering to cater to local nuances, whether that’s the language you use, the way you market your products, the prices you set, or even certain functions.

Take McDonalds for example – as well as the standard cheeseburgers and fries, its menu offers localised options that are uniquely made for the market or region. Think of the Nasi Lemak Burger, Bandung and Durian ice creams, or simply being able to order rice with your meal. These aren’t things available in Europe or the States.

In our case, wherever we launch SHOPLINE, we immediately prioritise the securing partnerships with local payment gateways and logistics providers. In Taiwan, this meant integrating with LINEPay, while in Hong Kong, our users can complete their purchases with PayMe – both popular payment options among local shoppers, but not necessarily further afield.

5. Hire locally
The reality is that for all your research and customer feedback, there are bound to be things an audit won’t unveil. So you need to be there, absorbing the business culture to develop a strategic plan.

When we enter new target markets, we always seek to hire locally. This enables us to gain new insights into the local competitive landscape and customer behaviour; and build networks and partnerships to navigate potential problems with greater ease. In turn, this usually translates to higher operational efficiency and better customer satisfaction rates.

Soft launches are also a great way to test the water and review your strategy over time. This was the method we adopted for our expansion into Malaysia, giving ourselves a six-month runway to work with a selected group of launch merchants, and understand their needs and requirements compared to other markets.

Taking the plunge: What to do once you’ve arrived, and maintaining momentum

Once we’d made our decision and committed to a launch, it was important that we gathered a team we could trust to be our eyes and ears on the ground, ensuring we were keeping on top of emerging trends and merchant needs to prepare for the future.

6. Decentralise to offer greater autonomy
If you have a team on the ground, decentralisation will allow local offices to take charge of the marketing and sales strategies in their markets, which helps in facilitating the process of expansion.

That’s not to say headquarters shouldn’t be involved—you want to retain brand identity across all offices. But the more you expand, the less time you’ll have to look at the finer details, so as a business owner, make sure your team is on the side, and excited at the prospect and hungry for growth, enabling you to prioritise the bigger picture.

If you’re stringent during the hiring process, you can ensure you find individuals who relish a challenge, share both your business’ values and company culture, and are capable to lead the charge in their respective country. This has the added benefit of giving employees a greater sense of authority and accountability when it comes to their work. Success will be a group effort.

7. Enable cross-border collaboration
That said, you’ll often have projects which involve multiple markets and require your employees to work together cross-borders. Having an effective structure in place can facilitate that collaboration.

We are fans of Scrum – the process management framework – when we have international projects underway. Essentially, Scrum ensures that each project has an appointed product owner, scrum master, and team.

The product owner ensures that actions are clearly communicated, decides what needs to be done and sets priorities; the scrum master monitors progress, facilitates meetings and removes any distractions; and the team executes the work to achieve the set goal.

8. Avoid complacency
After successfully rolling out the product, ensure you spend time reinforcing the quality of your product or service on a regular basis. Look no further than the iPhone’s decline in the Chinese market as rival, local phone brands garner favour with the population. If there’s a business opportunity to be had, it won’t be long until others attempt to ride the wave — you need to stand above the rest.

Depending on your sector, this may well involve introducing new products or services to provide a wider range of services to existing customers, as well as potentially enabling you to engage new audiences.

For example, at SHOPLINE, we noticed that there are a variety of channels that merchants use to reach out to audiences, including brick-and-mortar stores, online stores, and social media sales pages. As such, we rolled out O2O (online to offline) solutions that help to aggregate data and sales information from all these platforms, so that our merchants can analyse their sales across different channels, and provide their customers with an omni-channel experience.

9. Commit
Finally, demonstrate that you intend to stick around. Coming in as a foreign organisation, local customers may doubt your commitment to the country so building trust is essential. It could be as simple as marketing campaigns, but you may wish to consider other initiatives, such as committing to education in the market, or working with industry bodies on the ground.

Announcing office launches are only the beginning of your venture into new territory, and just as you size up the market, the market is also sizing you up. After building that trust, stakeholders and potential customers will view you in a more favourable light, which will widen your footprint, and establish a strong foothold.

This article was first published on e27 by Tony Wong, on Oct. 26, 2019.