Why You Need to Expand towards the APAC Region
APAC has a forum of 21 Pacific Rim member economies promoting free trade throughout the whole region. It is truly diverse in nature which provides a myriad of benefits to your company’s expansion plans. For one, a larger audience can help boost profits and sales as it helps open your company to other markets. This in turn brings financial stability and a steady stream of revenue.
A new market, a strong financial footing, and access to global talents are just the right ingredients to long-term success in business. And with APAC leading the global digital talent acquisition industry, plenty of opportunities can open up and much can be achieved as a start-up business.
With that being said, there are a few things to remember before expanding towards the APAC region. And in this guide, we’ll provide you with valuable tips to help your startup in its APAC expansion.
Conduct extensive research before entering new markets
Do not start your expansion without doing extensive research of the country you intend to expand to. The West and the APAC region have significant differences in doing business which is why it is critical that you do your due diligence before kickstarting any plans of expansion.
1. Legal Compliances
Understanding the foreign market, as well as the legal and regulatory differences from your home market, is a crucial step before jumping in on the expansion. Failing to comply with business regulations and tax compliance laws can have massive repercussions on your business.
For example, one can learn a lot from Uber’s exit in the Philippines in 2018. That year, Uber sold its operations in the Philippines to its competitor, Grab, after receiving a cease and desist order from the Land Transportation Franchising and Regulatory Board (LTFRB) over unregistered drivers.
On that account, make sure to engage with local experts to get country-specific insights to help you navigate your way to doing business in each country or region.
Apart from legal requirements, understanding the local market is crucial. That includes taking language and cultural differences into consideration. This involves acclimatizing and localizing your product to fit a new customer base.
Furthermore, being able to identify opportunities and gaps in the market will not only provide you with an understanding of your target demographic and your customers’ buying persona but as well as the perfect time to execute the expansion.
Evaluating the current market competition and identifying potential barriers to entry are keys to successfully expand to the APAC region. Startups must gather sufficient information to assess existing products and services in the market in order to gain a strong grasp of the local culture and achieve valuable customer insights.
The best opportunity that international expansion could give is tapping on talents that transcend borders. Investing in local professionals who understand the market will be able to assist you to adapt your strategies and operations to the local business climate.
When hiring from a local talent pool, consider answering the following questions first:
How will you manage and balance local hiring with global employee mobility?
What can you offer to attract competent candidates?
What cultural nuances might affect retaining top local talent?
What measures can you put in place to smoothly integrate your local hires with your global team?
Things to consider
First, remember that strategy and readiness are part of the preparation. An expansion involves certain challenges in management and logistics. Again, don’t forget to take into consideration the international laws and regulations, including how to navigate product optimization, and handling HR challenges.
When you are ready, make sure your company has a solid revenue base. According to Beat reports, startups usually wait until they have $10 million in domestic revenue before expanding internationally. Create a reliable financial plan before moving to new waters.
Lastly, lay some groundwork. Spend some time to research the infrastructure and government of the country you wish to expand in. Laws and taxation are different. The people and their needs are different. Localize yourself and immerse yourself in their society. The more you know, the more you understand, the better you can strategize.
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International expansion means refocusing your orientation towards a different customer profile, which is a crucial step in successfully positioning yourself in the local business landscape. Doing so will help you identify market gaps and understand how to navigate across geographies.