Things You Should Know to Make Your Business Grow

gigCMO Discussion - APAC Market Expansion Transcript

August 9, 2021

Mark Magnacca: Hello everyone, welcome to this week’s podcast – The Things You Should Know to Make Your Business Grow. Today we are going to look at Market Expansion and particularly the Asia Pacific Region, or what many people call APAC, and I am joined by two of my colleagues: Ulka Athalye, who looks after our business in India. Ulka, would you like to say hello, please?

Ulka Athalye: Hello everyone! Hi Mark, thank you for having me and I look forward to being part of this podcast.

Mark: Great. Wonderful to have you here today, Ulka. And we are also joined by Siyuan Ren, who is our Chief Operation Officer at gigCMO, and also CEO of gigCMO China. Siyuan, welcome to today’s podcast.

Siyuan Ren: Thank you Mark! Hi, Ulka! Hi, everyone! Thank you for having me. And I look forward to sharing some insights about the region.

Mark: Excellent. It’s good to have you both here and this conversation is really important because we are a strategic partner of a firm called Go To Market Global that is based in the UK, and helps UK firms enter into new markets around the world. We have been participating with them meeting UK firms looking at APAC. We have a number of learnings from the Roundtable sessions we run with them, and we’d like to share with you, our listeners, some of the highlights. 

So, let’s talk about the Asia Pacific region. When people talk about it, it’s kind of like saying Europe and North America. It doesn’t really mean a lot, until you dive down as these are huge regions. People know India, China – huge countries, over a billion and half of people of each, but what they forget is once you take these two countries out of the region, there is another a billion and half of people in the rest of the Asia Pacific region. And it’s very diverse: very westernised like Australia and New Zealand; and of course a completely different culture for many people throughout the Asia Pacific region. So it has its own challenges in every single country, so it’s very difficult to have a strategy for Asia Pacific region. You need to think which country are you going to enter into first. 

So, one of the challenges, for any business is, if they are going to go into a new market, which market shall they go to? Now you might be one of those lucky businesses that already got orders from overseas. You think that makes your life easier because orders fall into your lap and you think: “oh, maybe I should look there.” But from a best-practice approach, Ulka, what should be the start, in terms of when you're thinking of the Asia Pacific region, what’s the first thing you should be doing?

Ulka: The first thing is really starting with a Situation Analysis, meaning do a thorough understanding of the context of your new marketplace. When we say “Thorough”, it includes understanding the Political, Economic, Social and Technological environment, and framework, because it would be a mistake to assume that the current environment and frameworks from your country are the same as your target country. 

Mark: That’s a great point, Ulka, because a lot of time we all work with these frameworks. Many of us went to business school, and went through life and have these frameworks. People forget to apply them, don’t they? Doing something like this will give you real insights if there are any landmines or issues along the way, correct? 

Ulka: Absolutely right, Mark. For example, providers of internet services, or providers of pharmaceutical services, or health tech services should not automatically assume that they will not face regulatory hurdles in that target market. That’s really one.

The second analysis is really about the total addressable market, because linking back to what you said, Mark, one is really the population of a particular country, which can be very different from your addressable market, which is really dependent on what you offer. 

Mark: Yes, that’s true. You know you have countries like Indonesia who has under-developed and extreme developed parts of the country.

Ulka: Yes, that’s true. It’s the same with Vietnam. And therefore, one needs to treat these very differently. What would you say, Siyuan?

Siyuan: I think what you both said were absolutely right. First of all, if you look at the APAC region, although it’s one region, it’s formed of many countries. Each country and each region within APAC, has their own political, social and economic landscape. Not like in Europe, especially in the European Union, which is a common market, within APAC, the culture, mindset, regulations and political climate are all very different. 

Mark: although they are trying to do their best to create a common market across the region, they are in the very early stages – this goes back to the 50s in Europe – it was just the beginning of the European common market. In those days, people remembered that Tuesdays I am in Belgium, and you had to change currencies in every country. So, it’s not so easy to move around, is it, Siyuan?

Siyuan: No, it’s not. Therefore, when you look at the APAC region, the first is to look at which country within the region is most suitable for your company to look into it and research it. After looking at the PESTEL analysis and market size, one important thing is Segmentation. Of course, you can segment within a country within Asia Pacific, but also consider there might be a segment across Asia Pacific within their characteristics. However, you still need to look at in that segment, what are the characters from different countries. But of course you can look at a country as a segment, say you target India, or China. So when you look at Segmentation and Target Audience, that’s an important piece to go deep and analyse thoroughly. 

Mark: Ulka, what do you think about that?

Ulka: yes, I totally agree. A lot of companies tend to make the mistake of treating the region as one and that when they go wrong, because you really can’t be everything to everybody. You will succeed only if you divide your market into a homogeneous bucket which is the market segmentation that Siyuan has explained. And then zoom in on a target audience of your choice – that this is the audience you know you will most succeed with in that particular market. That again really depends on how well define the market it is, how large the market it is, and how confident you are meeting the needs of the particular market very effectively. And again, it links back to your core strengths and core capabilities are. 

So, having identified the target audience, the next step is to create a profile of that audience in much more detail, because this really is the link between identifying the audience and deciding how I can reach them and connect with them effectively. What I have found is that customer profiling is a step that a lot of companies tend to miss, or a lot of them seem to give importance to, assuming that they have done a proper identity of the target audience, they don’t need to profile it. But profiling comes very critical because these markets are very different from the home market. The culture is different, the way that consumers process messages is very different, the channels that they respond to is very different, and therefore the profile is really detailing what the consumer is about, what channel does the consumer use, what does he/she need, and therefore what I need to do, in terms of tactics, to really reach out to the customer.

What would you say, Siyuan?

Siyuan: I think you are absolutely spot on. I think in terms of the approach of the market analysis, segmentation and customer profiling, it’s no difference from your market analysis in other regions, other countries and your home market. But if you look at APAC, because of its diversity, it’s more complicated. And when you talk about customer profiling, you have to conquer the cultural gap as well – how are you going to understand the target audience that you are not familiar with. Using a local partner to help you with that is quite important – someone who has the local knowledge and insight will be very beneficial on that. 

Ulka: absolutely. You know linking to that when you enter into the APAC market, not only you will have other global competitors, but there will be a lot of local competitions as well. That’s where the point you mentioned, Siyuan, is very important, about having a local partner who can trust and who can help you navigate the competitor landscape in that region. You know, for example, this is very important in India. I am sure it’s very important in Vietnam, and other countries as well. One of the characteristics of the APAC region is that a lot of relations is based on trust and sometimes a mutual affinity, which perhaps is slightly different from the other parts of the world. 

Mark: Yes, trust works in a different way, in different countries and cultures around the world. I think one of the really interesting things from everything you’ve talked about, in terms of looking at all those opportunities, I think you really have to come back and look at your own fundamentals. If you don’t know who you are, it’s going to be very difficult to succeed globally, so it’s about understanding the business model and value proposition and how they may need to change for the new markets. 

Siyuan: I notice that a lot of companies that they have a good business model in their home market. They are doing really well. When they plan to go to APAC region, they thought about the tactical side, what’s the social media strategy, for example. How do we tell the story, what’s the message, and how can we tailor the story? After our discussion with these companies they realised that they probably have to review their business model and value proposition. Yes, their core value will not change, but people in those regions will perceive your brand, your business, your product and services differently, like what you said Mark, that different country regard trust, think trust differently. And the same, they will see your business and product and understand your business and product differently. So, reviewing the business model and value proposition to see if it suits the target market or whether you need to adapt to the target market is so important. 

Mark: so when you bring the business model and value proposition together, and complete that situational analysis, I guess you need to do that final SWOT, Ulka, and put it all together.

Ulka: Yes. Very often companies collect a lot of information and data, they analyse and process this information and parts, sometimes make decisions on that. What really needs to be done is that it has to be stitched together and summarise in the form of a SWOT, based on which what are the actions that you really need to take. So, what are your strengths. You know what your strengths are. The market analysis and the whole situational analysis will also tell you what the market thinks your strengths are and that’s very helpful to know. You need to understand your weaknesses very objectively. This is where a third party can help you do that. What are really the opportunities based on the competitors’ scenarios there, based on what your target customers need, based on what the gaps in the market are, are what would be very useful to put together. And finally what are the threats that companies haven’t really thought about. And this part, I am sure Mark and Siyuan you would agree that, need a lot of thoughts, and companies need to spend time on this because this also gets ignored sometimes. You need to think about what can go wrong once you enter into that market, two years down the line or five years down the line. And ideally, your entry strategy should also incorporate a plan that mitigate any threats that might face you in future. 

Siyuan: totally agree. It’s neglected by a lot of companies and also bear in mind that sometimes it’s a strength in your home market, it’s not necessary a strength in a new market. For example, we talked to one of the small, but very profitable companies in the UK, and one of their strengths is their customer service and also their pricing. However, when they look into other markets, the pricing and customer service are not a strength for them any more in APAC, because of the labour cost and also sometimes it’s difficult to deliver a customer service remotely, even thought we are talking on Teams and Zoom all the time, there’s a time difference. Looking at the SWOT analysis in the new market, we need to think about operational and logistical issues and considerations as well.

Mark: I guess looking at the Asia Pacific region, anybody looking at that, there are some homework they can do themselves – just put a big grid together, put all the countries, put down all the points you know about each of the countries, to come up with an overall assessment of the opportunity at a very high level. And then, as we discussed here as Siyuan mentioned, look at the fundamentals. And Ulka, you highlighted, along with Siyuan, the overall situation, and from that you complete the SWOT, you are then in a spot to say OK, here are our two or three priority markets or maybe there’s only one to begin with. I think this funnel approach, many of these firms will benefit because they’ll get lost in the opportunities of where do I start? And sometimes they start with “Oh, let’s start with Australia because we think they are similar to us, or the supposing the familiarity, but that might not be the best place to start all the time.

Siyuan: What Mark suggested is a really good approach. Doing market research isn’t cheap, but as a company, you can start with some research yourself, put a grid together, looking at the PESTEL analysis, market situation. You can get a lot of information online and through talking to partners, talking to potential clients in that region, and then perform a SWOT analysis, and identify which one or which few are the priorities to consider, even consider doing market research.

Mark: Correct. One of the things we talked about – yes, companies should do their desktop research to get going to look at it and that’s where they can work with companies like ourselves after they’ve got an initial focus on the region to work with ourselves and take their analysis to a higher level, stress test it, get our outside perspective and local perspectives that you bring into the organisations. 

And the other exciting thing with the UK at the moment is that we all know that UK is focused on new markets. They have to find new markets to grow. And there’s a huge focus from the government on APAC in particular, and there’s a number of programmes that run by DIT in terms of matching funds, up to £9000, to do market research, or (engage) consultancy, or other issues like that. So, there’s help available. If people have some understanding, they can do desktop themselves, or engage people like ourselves, they can get some funding from the government – it’s not a lot of money. And as you mentioned, you can’t go to a new market on the cheap, but you can certainly do it on a low-cost manner.

And we look forward to continuing those conversations. 

Thank you both, Siyuan and Ulka, for joining me today for the podcast – market expansion and how to start look at APAC region. I’d like to invite you both back in the future and we can get into details about once you know your route to market, what do you do with your marketing mix and how can you make that work, in some of the countries that SMEs and businesses, in fact, of all sizes are looking at. 

Thank you Ulka. It’s been a pleasure having you here today. 

Ulka: Thank you Mark, thank you Siyuan. It was lovely talking to the two of you.

Mark: Thank you. And Siyuan, it’s been a pleasure to have you on our podcast as well today.

Siyuan: Thank you very much for having me and it’s a pleasure talking to you both. 

 

Mark: Great. I’d like to thank all the listeners of the podcast for tuning in again to Things You Should Know to Help Your Business Grow. We are also now on Apple Podcast. We are very excited about that. We are looking forward to hearing your feedback as always, and speak soon. 

 

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