Expanding your business to new grounds can be both exciting and intimidating. On one hand, you’re opening up to an entirely new market, and on the other, you have to make sure you’re thoroughly prepared for the expansion. Not to mention, there’s the little problem of deciding where exactly to expand, as the whole of Asia is ripe with opportunities, but there is also a wide variety of circumstances that you’ll need to prepare for.
That said, we’ve outlined a few crucial factors to think about before choosing a country to expand your business in.
Get to know the laws
Foreign ownership laws are the first things you have to consider, as they are major hurdles in most Asian countries. For instance, the Philippine government allows 100% foreign investment in select industries, such as wellness centers or financing companies, but will prohibit any foreign ownership for others, like small-scale mining or mass media. Thailand, on the other hand, mandates that 51% of a company should be owned by a local.
There are also countries that have no direct foreign ownership requirements, such as Myanmar, but the complicated clearance process can steer businesses away.
In contrast, places such as Singapore or Hong Kong are relatively easier to get into, as these governments strongly support foreign investments and therefore have transparent regulations that are easy to follow. Thus, remembering to look at the laws on direct foreign ownership and their requirements is an important point of the pre-expansion process, as it will help determine just how much ownership you’ll have to manage and what restrictions you need to take note of.
Know what digital marketing channels to use
It should go without saying that different countries use different channels of social media in various ways — and knowing what your target country uses (and how) is a vital detail to master. Digital marketing experts Ayima lists some of the most popular platforms around Asia, such as WeChat, Facebook, Baidu, and Google. WeChat is mainly used in China, where everything from business and personal posts to product and service transactions happens on the app.
On the other hand, Facebook has a large user base in countries like the Philippines, as Filipinos are very social and love to stay connected with their peers. In fact, writers from ABS CBN report that Filipinos are the world’s top social media users — a benefit for any brand familiar with Facebook’s digital marketing mechanics. Overall, considering the digital marketing platform you’ll have to use is essential to be able to properly communicate with your prospective new audience.
Learn the language and the culture
Each country has its own language and culture that is crucial for any business to understand. This is for several reasons, but a major one is that a country’s culture can also affect your chances of operating there. For instance, international coffee brands may have difficulty entering the Vietnam market, as they are well-known for their local coffee and it is a major source of their income. Moreover, knowing the culture can go a long way in business deals — some cultures may prefer bowing, while others prefer a firm or soft handshake. Knowing these nuances can help build mutual respect, which can only benefit the business.
Furthermore, taking the time to learn the language is important to get your brand’s message across correctly, and to avoid misunderstandings or mistranslations. For this reason, choosing a country whose language you feel your company can adapt to easily is critical. Consider taking Cudoo’s online language classes before expanding to another country, as knowing the basics can go a long way in building trust and appearing authentic, among many others.
All in all, identifying which Asian market is ideal for your business may take a while and can sometimes be a tiresome process, but it’s sure to be worth it. Entering the right market can make all the difference between having a successful expansion, or having to count your losses and retreat.