Are You Ready for Success in Asia?

The total population of Asia is around 60% of the globe and many, if not most Western companies understand that this combined market is simply too large to ignore. However, Asia is diverse in every way and what might work in one territory, or even segment, may not work in another. How can a Western company approach Asia in a way that is most likely to succeed long term and sustainably? Jari Hietala, Managing Partner of Asian Insiders offers his views on how to achieve success in Asia.

Asian Insiders has just released a powerful and unique tool, available free to anyone visiting our website – www.asianinsiders.com. Our Readiness Check, a scored, automated tool that provides you with a weighted report based on your responses to a series of questions. This report runs to several pages and is comprehensive across seven different categories. The readiness check provides a starting point for in-house consideration, as well as a useful platform for further in-depth consultation. We’re excited about this tool, harnessing the power of artificial intelligence but based on decades of hard-won experience in Asia and thousands of completed assignments.

Focus on Asia

Even where companies already have a presence in Asia, it’s easy to lose sight of just how greatly Asia varies between countries, between urban and rural regions and, for want of a better word, between classes. Much of this is due to the rapid economic and industrial development of Asia, occurring over a much shorter time than in the West, therefore marking significant differences between say, the glass towers of Tokyo and Shanghai and coastal villages in Vietnam or Indonesia. That development is an ongoing process… Asia continues to modernise rapidly with middle classes continuing to expand. A clear example of this may be found in the energy sector, where there is a large-scale shift from coal-fired plants to other formats – solar and wind, hydro, even hydrogen across the provinces. Another example is where EV charging infrastructures continues to rapidly expand across Asian markets. Various governments around Asia, spurred by regional competition and increasing pressure from its populations are motivated to build their economies and seek international partnerships in doing so.

Western companies seeking to establish themselves in Asia, or expand their operations further, must absolutely have access to Asian expertise. Not simply for language purposes, although this in itself is necessary, but to understand how Asian decisionmakers think, their timeframes, how loyalties work, how negotiations are conducted and affirmed. Too often western businesspeople in Asia assume their Asian counterparts, often western educated, share the same logic and too often, they don’t.

Competitive Advantage

Western companies often find themselves entering or operating in Asia on the higher side to the price equation. That’s reasonable… It might be difficult for a high-tech machinery company, for example, to compete directly on price with similar products from cheaper labour markets. But the competitive advantage must still be there – features, longevity, reliability etc. and these must be evident to the market. If you don’t have a competitive advantage, don’t compete.

Competitive advantage should be clarified in a context that reflects market and segment. This requires market intelligence and usually, deeper end-user and competitor research. Success in Asian depends on it.

Selection of Target Markets

In most Asian countries, there is significant variance between states and provinces – in many cases where there are often different regulatory and tax jurisdictions. As well as legal and licensing differences between markets, there are differing levels of logistical support, energy infrastructure and more. Audience profiles differ along with the local costs of reaching them.

Selecting the first, or next ideal market requires clear understanding on market potential and which segments are better suited. Is there an existing ecosystem for the product or category in question – channel partners, servicing agencies and suitable local banking facilities. Success in Asia requires a clear match between product and target market, and this can be determined in advance. As Lao Tzu once wrote: a well-placed spy is more valuable than ten thousand men-at-arms.

Market Entry Operations

With thorough research in hand and an understanding of the costs and rewards, undertaking market entry usually becomes a clear process. The mode of entry is determined and the appropriate partners approached and secured. As well as putting everything in place in the market – legals, banking etc, attention at the home office will be needed to supply, service and support the new market. How will this new market in Asia compete with home markets for support and focus? Success in Asia will require dedicated executive attention.

Management of Sales Channels

Whatever the mode of entry, selecting the right partners is absolutely critical to success in Asia. Too few partners allow a dependency that might be unjustified. Too many may leave good partners unmotivated. Western companies should develop an ideal profile for an in-country partner. It is important to understand how they work, their competing pressures and to retain the ability to independently monitor their sales performance against market potential. In fact, understanding the addressable market size becomes a key metric against which all targets are set, and performance measured.

Supporting partners is key, planning alongside them, understanding the issues they raise and getting to know them personally are important aspects of partner management. Along with clarifying exact roles and responsibilities and to develop a protocol should performance fall short of agreed expectations.

Skills and resources

Success in Asia requires a strong understanding of all market entry requirements, with senior level awareness of necessary skills, resources and investment necessary for expansion. Strategic planning, at board level, for skills acquisition, resource allocation and with a suitable time frame to allow for initial market uncertainty and market adjustment. Many companies may depend upon in-country partners for market insight and to enable long-term planning, depending on mode of entry, however this is where independent advice and market intelligence will reduce risk.

Internationalisation

Most western companies will have some experience with exporting their good and services, even if only to nearby countries or that share common language. Moving to a different continent, Asia, will be a fresh set of challenges. Even where present in Asia, moving to a new market will still stretch the organisation, although they will have had some useful experience. Different time zones, languages, laws and banking regulations will all require adjusting your home procedures. And of course, where success follows this expansion, there’ll be implications at home for increased production, shifting risk management and more. Four and a half billion new customers look forward to meeting you.

You can see the Readiness Check here: https://asianinsiders.com/our-services/readiness-check/

Success in Asia requires a shift in mindset, an understanding of the risks and rewards and close management of both. Correct information, good planning and careful following steps will lead to sales growth and increased profitability. For a no-obligation call, please contact Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com

See related articles and case studies for:

Help Us Improve
Our Website

Please take our quick survey (it only takes a minute). We appreciate your feedback!