• Businesses must consider Asia given the region’s continued economic growth and widespread opportunities across numerous sectors
• Market entry failure is tied to several factors, including an inability to understand local markets and not developing a powerful value proposition
• There are a few techniques companies can utilise to see if an Asian market is a good fit before committing to entry

Businesses wanting to win in Asia must move away from the guesswork and intuition-based decision-making process when it comes to entry or expansion. While companies can be successful using this approach, it is overly reliant on luck. There is a better way. Asian Insiders Managing Partner Jari Hietala discusses what companies get wrong and how to improve the odds of success. 

Entering Asia is no longer optional for businesses. As challenging circumstances unfold elsewhere in the world, the region has proven resilient. ASEAN countries are global leaders in economic growth. India is only starting to realise its full potential. Markets like Korea, Japan and Taiwan remain attractive.

Importantly, opportunities are not concentrated in one or two sectors. Nearly every Asian country is open to foreign involvement in construction. The region’s automotive sector is transitioning to EVs and is actively seeking support. Cleantech grows in importance as a shift to renewable energy continues. It is a hub of pharmaceutical activity. Semiconductor manufacturing and AI are just a few industries predicted to grow significantly across several markets.

Despite widespread opportunities, promising economic factors and even investment incentives in certain cases, many European and North American companies remain sceptical about whether they should enter the region. Their business with Asian customers tends to be opportunistic, usually following trends or following others.

The reasons for this vary. Some firms feel the risks are not worth the reward of market entry in Asia. Others find the cultural, linguistic and market challenges daunting. A few prefer to focus on core markets closer to home.

Sitting on the sidelines not only means companies are absent from the world’s fastest-growing markets, but they also risk falling behind competitors.

Is Asia right for you?

Previously, businesses had to rely on guesswork, chance meetings or “trusting their gut” when deciding whether to enter Asia. However, these methods are nothing more than speculation and fraught with issues.

In reality, companies can better determine whether Asia is right for them by assessing the competitiveness of their offerings. From there, the suitability of individual markets can be analysed through the specific potential and attractiveness of each one.

A common mistake made by overseas businesses examining opportunities in Asia is an over-reliance on addressable market size. It is an important factor but should not be viewed as the sole determinant.

The ultimate attractiveness of a market should be decided by weighing size alongside other considerations, such as competition levels, availability of business partners, ownership restrictions and readiness to adopt new technologies.

The good news is that finding this information is neither complex nor costly. In terms of entry, doing so not only validates if Asia is right for you but also specifically identifies the best possible markets in a large, diverse region. Not every country is suitable, and businesses often miss out on better opportunities in favour of selecting the biggest market or following a competitor’s lead.

The myth of success in Asia

Companies that have or are planning to enter an Asian market tend to seek out sales channel partners. These are the lifeblood of success. Yet, too often, companies overlook the nuances of the selection process, choosing whoever is the biggest or the one who introduced themselves first.

The issue with the former approach is that a firm becomes a number in the partner’s portfolio, receiving limited focus and commitment. It is less of an issue for major names boasting global recognition. However, new entrants with a little or unknown value proposition tend to struggle.      

Even if that is not the case, a single partner may be unable to capture the full potential of a market, leading to low sales. A more comprehensive approach, including direct sales or working with multiple organisations in a country, yields better results.

A lack of oversight or management sometimes compounds the situation. Instead of having agency over their company and products in an Asian market, firms will allow an underperforming partner to continue. It’s not unusual for them to provide filtered or biased market information when a change of approach is requested.

This isn’t to say underperformance is solely the responsibility of a sales channel partner. On the contrary, companies must be able to clearly outline the commercial opportunity for the partner as well as ensure they have a thorough understanding of what makes your product the preferred option. Then, a framework for roles, responsibilities and performance expectations can be established and continually managed.

It is a myth that success in Asia is simply tied to having the best product or sales channel partner. Winning starts with companies understanding how to develop and manage their channel sales while knowing the needs of potential customers in any given market.

How businesses can win in Asia

Businesses that want to win in Asia start by answering a few questions. Do products meet local requirements, are features and characteristics relevant and valued by customers and is pricing competitive? These seem straightforward, yet too many firms never do the research required to answer them truthfully.

At Asian Insiders, we assist companies considering market entry in Asia by conducting the research needed to answer those questions with complete confidence. As part of this process, we can rank markets in the region based on their suitability and potential.

Our team of in-country experts applies proven methodologies to ensure market selection is done in a structured, professional manner. In other words, decisions can be made based on facts and data rather than intuition or simply following others.

Additionally, we recommend testing and validating your products or services against the needs and expectations of potential customers. Asian Insiders has developed a Market Test Drive service that enables companies to learn whether their value proposition resonates in a selected market.

Instead of committing time and resources to market entry initiatives, organisations can learn how their products are received beforehand. Positive results during a Market Test Drive allows them to move on to the next steps confidently. If the response was less enthusiastic, a company can recalibrate and try again or move on to a different opportunity.

Know before you go

Businesses that win in Asia do not rely on luck. In nearly every case, they take a measured, detailed approach to entry. While certainty is impossible, a proper game plan dramatically improves the odds of success.

The benefits, of course, are potentially massive. Asia is a region that continues to grow. It’s well-positioned to become a bigger part of the global economy. Every market certainly has unique challenges, but these can be overcome if you are prepared.

Asian Insiders has helped numerous businesses across segments develop the right approach and find success in markets throughout the region.  

If you’d like to know more about how Asian Insiders can assist, you can schedule a no-obligation call with Jari Hietala, Managing Partner: jari.hietala (at)asianinsiders.com. You can also take our Readiness Check to see how prepared your company is for market entry by clicking here.