(Published on LinkedIn May 31st, 2017)
For many multinationals in North America and Europe, Asia Pacific represents a business growth opportunity that simply cannot be ignored. Asia Pacific is still a global growth engine with almost 4.5 billion people making up roughly 60% of the world population. Southeast Asian countries like Indonesia, Philippines, Malaysia, Thailand, and Singapore are experiencing significant growth in key technology sectors like Blockchain, Fintech, Healthtech, Gaming, Cybersecurity, and Edtech. Within these hot sectors, many innovative companies are excited to bring their technologies into Asia Pacific but sadly, are unaware of how best to make inroads into the region.
Let’s examine some business development strategies on how best to enter Asia Pacific:
1. Asia Pacific Region Familiarity
If you are going to focus on a specific country or a set of countries (e.g. Singapore, Indonesia, Malaysia), then please make a trip to these countries to familiarize yourself with the distinct cultures, the people, the business opportunities on the ground, and the business ecosystem of associations and networks to help you gain a footing into these countries. You should budget to come into the region at least once a quarter or twice a year to ensure you are keeping your ears on the tracks. We, at StrateValue, see too many companies fail to penetrate the Asia Pacific market because they have never visited the region and are therefore perplexed on how to conduct business here.
2. Direct or Indirect Presence
Setting up a direct regional presence through the formation of a full fledged private limited company in your strategic location of choice will give you many options to flex your commercial and legal muscle in-region. Depending on the country, you may get tax breaks, hiring incentives, R&D subsidies, and other goodies to start your journey in the region. Having a direct presence also shows your regional customers you are serious about supporting their business with a long-term commitment to Asia Pacific.
If you’re opting for an indirect presence through channel partners or subcontracting your market representation through a market development consultancy firm (i.e market entry firms or independent business development professionals), you are likely to be at the early stages of your Asia Pacific market entry and are utilizing the knowledge and relationships of third parties to help you build your business in-region. Success can be achieved through indirect representation for a limited time but for long term growth of any business, moving to a direct presence will always yield greater commercial and marketing benefits.
3. Government Trade Commission Matchmaking Services
These business matchmaking services offered by international trade departments of governments are excellent starting points to get your feet wet if you are a company wanting to familiarise yourselves with entering Asia Pacific. Approach your trade department in your home country and they will coordinate with their trade representative counterparts in your country of choice in Asia to perform local business development activities such as partner / customer matchmaking. Once they set up meetings with local companies that have agreed to meet with you, you then make a trip to Asia Pacific to meet with these prospects. Some examples of these services are listed by country below:
4. Allocate Adequate Resources to Support Asia Pacific Business Development
We have seen many companies get excited about entering Asia Pacific, hire local resources in Asia to grow and support the region but fall flat when they realise they do not have the time or resources from their headquarters to support the team internationally. Entering Asia Pacific requires a long-term commitment and budgeted investment to ensure all the pieces are in place to ensure proper business and commercial support. This means putting in appropriate sales and technical resources to support the local time zones, localised language support if possible, proper commercial pricing models, and most importantly, localised products / services customised to Asia.
Ultimately, the most important objective in your business development strategy for Asia Pacific is to develop a robust revenue stream based on long term relationships with your customers through trust and confidence. Budgetary considerations and stage of your business growth will determine your ability to enter what is clearly an exciting region to conduct business internationally!