In this day and age, market entry into Asia Pacific may be the pinnacle of growth for your business. Powerful economies, widespread use of new technologies, and potentially limitless customer acquisition make Asia an ideal environment for market expansion.
Combine that with the endless mobile innovations that facilitate operating across international borders and the Asia Pacific $525.2 billion e-commerce industry, and you may wonder why your company hasn’t already set up shop in Asia.
With so many potential customers in the global marketplace, overseas expansion is necessary for business survival. Yet even the most experienced business managers can find it a challenge to enter the Asian market.
The key to success is localization. Global ventures that don’t localize are doomed long before their expansion starts. Respect your target customers by showing them you understand the intricacies of their market.
Expand into the leading Asian markets
Japan, China, and Korea are the natural destinations for expansion because of their strong economies, advanced consumerism, and powerful markets. They are a clear choice for Western businesses looking to expand overseas. However, many companies don’t realize the difficulties they will face with branding, messaging, and localization in Asia.
The younger generation of Asian consumers is starting to have an aptitude for Western products, but Asia has an overall tendency to resist foreign brands. Japan and China are especially inclined towards local products and services. They are prideful of their national brands and business strength.
In Japan, it is rare to see anyone without a NTT DoCoMo, KDDI, or SoftBank Mobile phone. These companies make up a sizable portion of the national economy. When Vodafone tried to compete with these powerful national carriers, it was ultimately taken over by SoftBank. Vodafone lacked a localization plan. They simply couldn’t give customers a good reason to leave the high-quality coverage, products, and services of Japan’s national providers.
…or into the behemoth of China
China prefers to keep foreign companies out, letting local businesses like Baidu, Sina Weibo, Alibaba, and WeChat thrive. While plenty of foreign companies have succeeded in China, plenty more have failed. Those that succeed conduct extensive market research, understand cross cultural branding, and employ solid localization strategies.
In China, KFC, Starbucks, and McDonald’s succeeded by catering their menus to familiar local tastes, incorporating flavors like red bean. Even Pampers managed to win the hearts and minds of Chinese consumers—a huge deal for a nation that didn’t understand the need for diapers. At first, Pampers tried to compete on price points alone and failed.
Undeterred, Pampers stepped back and analyzed Chinese baby needs through extensive research in hospital nurseries. They developed a new product tailored to those needs, educated Chinese mothers on the benefits of diapers, and became an indispensible household brand in China.
Understand your customer
Asian shoppers buy different types of products from Western shoppers. Even the same types of products are sometimes used differently. Home Depot established a successful “do-it-yourself” brand in the US, but they failed in China. Chinese customers just couldn’t understand why they would want to build their own furniture when they could hire cheap laborers to do it instead.
No more one-size-fits-all solutions
Globalization doesn’t mean you can simply take your existing product or service and drop it into a new market. Instead, you must localize your product to fit local regulations, customs, culture, languages, and consumer tastes.
Even Hollywood has started catering to global market tastes. The movies you watch are carefully tailored to appeal to Chinese viewers. Businesses must be forward-thinking and culturally sensitive to succeed in Asia.