• Successful business expansion in Asia is possible even during turbulent times with the right approach
• Common causes of failure include thinking of Asia as a singular market, guessing on which countries are the best fit and focusing on only a few factors
• Preparation for expansion requires on-the-ground expertise as well as a dialogue with local partners and potential customers

It is common for companies to delay expansion plans during periods of global uncertainty. The risk of failure is seen as being greater than the possible reward. However, that doesn’t necessarily apply to Asia which is a leader in economic growth. In fact, European businesses that shelve expansion today will fall behind competitors in the coming years. Asian Insiders Managing Partner Jari Hietala offers insights into how to approach business expansion in Asia during times of uncertainty.     

The challenges businesses face at present are numerous and mounting. Geopolitical tensions, evolving operations, the adoption of AI and general global uncertainty have given reason to pause expansion plans. While understandable, firms risk being left behind in growing Asian markets where existing challenges are not preventing growth in key sectors.

Business expansion in Asia is possible even during periods of uncertainty, such as what is playing out today. The key is to take a measured, detailed approach to the process rather than sit idly on the sidelines. Winning in the region is a realistic possibility if you have the right game plan.

Validation instead of guesswork

A common mistake companies make when exploring business expansion in Asia is to guess where their products and services would be a good fit and how much demand there is. Oftentimes, it is based on what competitors are doing, secondhand information or macroeconomic data.

The problems that can arise from this method, even during stable market conditions, are numerous. It leans more toward an educated guess than an actual answer to pertinent questions, including whether Asia is a good fit and which countries are most attractive.

There is a different way to approach business expansion in Asia. By validating the suitability and competitiveness of a product or service, a company can gain a firm understanding of the situation without making major investments.

To that extent, it is crucial to think about expansion as a regionally focused endeavour while locating the best markets. Asia is not a homogeneous place. Each country is unique, from languages and consumer preferences to infrastructure and technology adoption. Market expansion needs to be approached with this in mind. Other factors include:

• Level of competition
• Local laws & regulations
• Market price level
• Suitability of the technology or offering to the market
• Availability of competent business partners
• Corruption

Understanding all these and how they can potentially impact the acceptance of your product or service is the only way to validate the attractiveness of each market in Asia.  

Preparation before expansion

Successful market expansion into any Asian market begins with preparation. Once validation is complete and the highest-potential countries have been selected, the next step is to identify a successful approach.

In terms of sales channel development, many firms tend to rely on chance. Something along the lines of an introduction at a trade fair or networking event. These can be successful, but the likelihood of this being the best possible option is slim. No preparation has gone into determining whether they have the necessary knowledge and expertise to close deals.   

Businesses with an existing presence in one or more Asian markets tend to rely on established relationships. Sometimes partners will insist on covering a larger territory rather than a single country. This can prove troublesome unless you know for certain they have local resources and connections throughout Asia.  

A number of foreign companies take a follow-the-leader approach which sees firms do the same thing as larger competitors. For example, when companies began diversifying manufacturing from China to Vietnam, countless others followed suit under the assumption that it was the best move.

This isn’t to say Vietnam was not the correct choice for some firms. However, several overlooked better opportunities in Indonesia, Malaysia, Thailand or elsewhere where greater incentives may have been available. A thorough examination of the region and validation of the best markets can enable your organisation to lead as opposed to follow.

Ultimately, true preparation can only be accomplished through meetings with potential customers, reaching out to possible sales channel partners and distributors and conducting on-the-ground activities that require assistance from a local expert.

Read More: What must businesses do to win in Asia?

Know before you go

Validation and preparation are vital before a potential expansion into Asia, but these don’t always provide enough insights to make a confident decision. At Asian Insiders, we recommend conducting a market test drive to see how products or services meet the needs and expectations of customers in a specific location.

The result of this process ensures you can be confident that the market is both desirable and competitive or if adjustments need to be made before expansion.

Click here to learn more about how Asian Insiders’ Market Test Drive works.  

Is business expansion in Asia possible during uncertainty?

Business expansion in Asia is possible even in the current climate of uncertainty. For many organisations, not exploring opportunities could prove costly in the long run. Growth throughout the region outpaces global figures while its size is unmatched.   

The primary issue isn’t global uncertainty but uncertainty about the process of Asian expansion. Too often, companies begin the process without the necessary information, connections or understanding. It results in complications or, in some cases, failure.  

At Asian Insiders, we excel at helping companies navigate the business expansion process in Asia even during times of uncertainty. Our systematic approach ensures markets are ranked in terms of potential and attractiveness for a specific product or service.  

Together, we can identify where your company has the best opportunities and develop a robust plan of action to cover all aspects of expansion. Our experienced team of in-country experts handles challenging tasks, such as scheduling meetings with potential customers and sales channel partners. 

Ultimately, opportunities in Asia are readily available. Businesses wanting to tap into these must not only understand the complexities of individual markets but also conduct the necessary due diligence to ensure they know which markets are best for their products or services. Working with Asian Insiders can remove the guesswork and put your expansion on the right path.

Thinking about expanding in Asia? Schedule a no-obligation call with Jari Hietala, Managing Partner: jari.hietala (at)asianinsiders.com. You can take our Readiness Check to see how prepared your company is for market entry by clicking here.