From one of the world’s poorest and most isolated nations, Vietnam has emerged as a force to reckon with for international investors. Now a middle-income country with a young population, Vietnam provides a wealth of opportunities for brands entering the country.

Owing to a rising middle class and a boost in manufacturing and exports, an increasing number of brands are eager to make an entry into Vietnam. 

It was announced yesterday that Apple is in the process of relocating Apple Watch and Mac production to Vietnam as part of a broader push to diversify its supply chain.

In recent years, Vietnam has shown immense resilience. At the peak of the pandemic in 2020,  when most other countries were derailed economically, Vietnam was one of the few countries to post GDP growth. In 2021, the country had a rough year, but the economy is expected to rebound to 5.5 percent in 2022.

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The government provides various incentives to attract international companies looking to establish local production and distribution of their products. 

This rapid growth and a consumer-driven modern lifestyle have set the stage for foreign investment. There have been shifts in consumer spending and behaviours, and an understanding of these changes and the cultural nuances of the local population are critical to successful market entry in Vietnam. 

So how can international investors and brands tap into this lucrative market?

Brands can conduct thorough market research to understand the market, culture, consumer behaviour, and economic and socio-political conditions to map out a successful market entry roadmap and strategy. 

Setting up and registering a company in Vietnam.

Setting up a company in Vietnam is a straightforward process, but knowing the options available and the specific guidelines and rules for foreign organizations is critical to success. The two most common forms of foreign-owned companies or legal entities are a Limited Liability Company (LLC) and a Join-stock Company (JSC).

Vietnam is easy to enter and carry out business in as it also offers 100 percent ownership of a company in most industries. Industries that have restrictions on foreign ownership require companies to enter into a joint venture with a local Vietnamese company.

As long as the business covers the expenses and can sustain itself, there are no minimum capital requirements for investing in most businesses and industries. All companies in Vietnam need a physical office address and at least one resident director with a local residential address. 

In some cases, you don’t need to set up a company in Vietnam as there are alternative ways, such as having a representative office or having an employer of record —a third-party service provider that recruits and manages employees on behalf of your company. 

Vietnam’s stable political climate and socio-economic conditions

A country’s political climate is an important consideration when weighing the opportunities and challenges of entering an international market. 

Vietnam is a unitary single-party state, which means there is only one political party; and the formation of other political parties is forbidden. This makes the political environment stable. 

Political stability is one of the most critical considerations in entering a new market. Protests and civil unrest are rare, with occasional demonstrations.

On the 2022 economic freedom index, with a financial freedom score is 60, and out of 39 countries, Vietnam is ranked 18th in the Asia Pacific region.

Hiring in Vietnam

Another important aspect of setting up a company in an international market is understanding the labour market —its laws, guidelines, and policies. 

Vietnam provides a labour force at a relatively lower cost. The Mekong Region, which includes Laos, Thailand, Myanmar, Cambodia, and some Chinese provinces provides, puts foreign brands in front of a vast, affluent population. 

Organizations that ensure equity and fair compensation and benefits attract high-quality talent. Brands should understand legal compliance and H.R. policies and even partner with local H.R. consultants to handle hiring, payroll, and other such functions. 

The role of Foreign Direct Investment in the growth of Vietnam

Foreign direct investment has played a pivotal role in transforming Vietnam from one of the poorest countries in East Asia to one of the fastest growing with a rising middle class. Vietnam’s massive untapped potential, a relatively cheap workforce, and abundant natural resources draw foreign investors to the country. 

The government’s strategy is to attract high-tech companies to the country, with a focus on four primary sectors, namely, manufacturing, agriculture, travel, and services. 

Furthermore, the government’s efforts to boost trade and investment through free-trade agreements make Vietnam an attractive market for foreign investors. 

Challenges and competition from other ASEAN countries

Second, only to Singapore, Vietnam was the most attractive destination for foreign investors among ASEAN nations in 2016 —a significant uptick in its rankings in World Bank’s 2018 “Ease of Doing Business” report from 82 to 68 out of 190 from just one year ago. 

Vietnam lags behind Singapore in most aspects, reflecting the need for more progress to become the region’s most attractive foreign investment destination. 

Some other risks associated with doing business in Vietnam include a weak banking sector and the boom in private sector investments.

The economy is poised to grow at a faster pace next year. According to a World Bank economic update from August 2022, Vietnam’s economic recovery sped up over the last six months. The strong rebound in services and manufacturing is driving this growth. GDP growth is forecast to surge from an estimated 2.6 percent in 2021 to 7.5 percent in 2022, which is even better news for International brands that have an eye on the ASEAN market. 

With a GDP of $5.15 trillion, Japan is well-positioned for international expansion and offers substantial business opportunities for brands in various industries. 

The country has dramatically bounced back from the disruption caused by the 2011 natural disasters, like the earthquake and the Tsunami.

Japanese motor vehicles and electronics are prevalent globally. It is also among the world’s largest producers of steel. 

The country is among the world’s largest exporters of motor vehicles and electronic equipment. The service sector makes up the highest percentage of the economy in terms of gross domestic product and employment.

Major Industries in Japan

Japan’s five largest companies by market capitalization are Toyota, Sony, Keyence, Recruit Holdings, and SoftBank Group. Sony’s portfolio includes a distinctly non-Japanese Hollywood movie and music business originally acquired through a merger and acquisition over 30 years ago. SoftBank, in recent years, has morphed into a massive tech fund run by foreign fund managers invested almost entirely in non-Japanese startups. Recruit’s new CEO spent ten years acquiring and growing recruitment businesses in the U.S. before his promotion earlier in 2022.

Japan is focused on manufacturing precision and technology products such as hybrid vehicles, robotics, and optical instruments.

Other industries prominent in Japan are agriculture, fishing, and tourism. 

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What makes Japan an excellent choice for international expansion

Large World economy

The third-largest economy in the world, after the United States and China, and the fourth largest importer of U.S. products, Japan is open for international business. It is also one of the world’s most literate and technically advanced nations.

Robust Consumer Economy

Japan has a robust consumer economy with a per capita income of $42,197 and is a haven for brands that want to expand internationally. Japan’s massive consumer economy, in which consumers with considerable purchasing power seek high-quality and innovative goods and services. 

Protections and Compliance

An essential member of the international trade system, Japan complies with the law, and its efforts to maintain the rule of law is one of the pillars of its foreign policy. It also provides intellectual property protection and rights. 

Easy and inexpensive to set up an office 

According to the World Bank’s “Ease of Doing Business” report, it takes about 11 days to incorporate. It costs 0.7 percent or JPY 60,000, (approximately USD 470 million), whichever is higher, and registration and seal fees. For companies that want to set up a branch office, the costs are low and procedures simple. Co-working spaces are also an option in bigger cities. 

Rapidly Aging Population

Japan is ageing fast. One in three people is estimated to be 65 years and older by 2036, conferring the title of the world’s leading “super-aged society.”



While the nation’s rapidly ageing and declining population pose risks of an economic crisis, it also presents massive opportunities. As a result of the declining population, individual income has risen, surpassing U.S. citizens.

Fewer people in Japan mean larger living spaces, more arable land capital, more disposable income, and higher quality of living. This fuels the growth in several industries, such as pharmaceuticals, healthcare, franchising, and real estate, to name a few.

Seniors in Japan are financially secure and healthy overall and big consumers of various products and services. 

Innovation and Research 

Japan reigns supreme in research as a nation with a large senior population. It has a goldmine of data on ageing, medical data, and medical assessments—these datasets are beneficial for local governments worldwide. The nation ushers innovation and technological advancement in many sectors. 

Just as countries can look up to Japan to help their ageing population and fill technological gaps, foreign brands can view this as a great time to expand and invest in such fields.

Significant obstacles to consider before entering the Japanese market

Entering the Japanese market is lucrative and full of opportunities, but it is not without many obstacles and challenges. It is noteworthy here that Japan is one of the few Asian countries that never had a western country rule over them, and this is because of Japanese are strong-willed and are rooted in tradition. 

Although tariffs are generally low, Japan has other barriers to entering the market that may hinder foreign products’ importation into the country. 

It is essential to factor in some of the most significant obstacles before entering the Japanese market. These hurdles can be measured against the brand and company goals to make the right decision and market entry plan. 

  1. Japan’s size makes it essential for brands to invest substantially, increasing risks.
  2. Japan is a highly competitive market, and domestic brands have a strong presence. Therefore, it is not easy to compete with local Japanese companies. However, thorough market research before creating the market entry plan can help brands overcome the challenge of competing with local companies.
  3. Japanese are discerning and look for value for money and high quality when making purchase decisions. Additionally, the Japanese culture and tastes are very different from the Western world. Therefore, brands have to redesign and redevelop their products and services to tailor them to local tastes and preferences in most cases. Market research and product testing methodologies can help brands create and tweak products to fit the Japanese lifestyle and culture.
  4. Japan has very little foreign investment for an advanced nation, keeping the Japanese business sector isolated. As a result, only about 3-5 percent of Japanese speak good English, which can be a barrier for some countries.
  5. Japan has a strong network of regulations, permissions, and extensive procedures as a bureaucratic country. These strict regulations keep new entrants from competing with established industries. However, these regulations are being slowly relaxed.
  6. Management and H.R. policies are very different in Japan, and organizations entering the country must consider and adapt to the management style in Japan, because failing to do so, is a recipe for disaster. 

Marketing to the Japanese consumer

Japan is a unique market, and it is crucial to understand the cultural nuances and the Japanese consumer. You cannot become a Japanese marketing expert overnight, and it is helpful to hire local advertising agencies when marketing in Japan. 

For the same reason as above, it is critical to regionalise everything. Labels on products and marketing and sales materials, digital campaigns, and the website need to be in the Japanese language.

The Pepsiman commercial is an excellent example of regionalizing a brand. When Pepsi’s Japan branch decided to create something regional for Japan, they contacted Travis Charest to create a superhero mascot to promote Pepsi. This faceless superhero managed to get a cult following in the country. They developed an action game for the Playstation and created several successful commercials using Pepsiman. 

Nike’s attempt to extend its marketing message to include social activism in Japan was met with criticism. Nike Japan released a video depicting the struggles of women athletes in Japan that faced bullying and racism, topics that are not openly discussed in the country.

Martin Roll, a business and brand adviser, says that Japanese consumers are not as vocal and will not express dissent unless they feel brands cross a red line. Therefore, it is important to have a deep understanding of the culture, the sentiment of the people, the root of homogeneity in Japan (post-Hiroshima Nagasaki, there was a focus on a homogeneous society), and how to carefully tread the delicate line. 

https://www.youtube.com/watch?v=XkFaQuhHOtw

As in any other new country, it is also essential to have a local marketing plan and calendar.

Distribution and Sales Channels in Japan

The choice of distribution channels depends upon the product. Due to space limitations, small retail stores often stock limited inventory, and wholesalers deliver smaller amounts more frequently. 

Culturally, the Japanese prefer face-to-face interactions and place a high value on building and maintaining business relationships. This distribution system is costly and increases the price of goods. The growth of big box stores and e-commerce is challenging this status quo. 

In 2021, approximately 2.25 million vending machines in Japan were beverage vending machines, selling drinks like cooled beverages or coffee. 

The primary distribution and logistics points are found in the major port cities, like Tokyo, Yokohama, Kobe, Osaka, and Fukuoka.    

Market entry strategy for Japan

Brands need to develop and maintain strong relationships with local partners to gain a foothold and succeed in the Japanese market. The local partner can act as an agent, representative, or distributor and manage a branch office or subsidiary in Japan. 

Since the business culture is unique in Japan, visiting the country several times before entering the market is good. This can help familiarise the organization with the culture and business climate. 

Japan has a stable economy and is a dream destination for foreign investment. The key to successful business entry in Japan is doing the leg work using market research to understand the culture, localise the product and messaging, and find the right partner to expand the given brand in this unique marketplace full of opportunities.

Deciding to enter a new international market is exciting for a brand. Perhaps your product or service has gained enough traction in your existing market that demand is growing organically. You have two options to create additional revenue streams, add more products, or expand into fresh markets.

Having your brand available in multiple overseas markets can also make commercial sense. Your company can benefit from having numerous currency streams and not be beholden to one economy. When the Global Financial Crisis occurred from 2007 to 2009, some economies such as Australia, India, China, and Indonesia were not adversely affected. Brands established in these markets felt fewer shocks from the recession as more robust markets bolstered weaker ones.

Most people would assume that the US dollar is the strongest currency globally. However, nine currencies (in 2022) are valued higher than the US dollar, including the Pound Sterling, the Euro, and Kuwaiti Dinar. Just like economic ups and downs, currencies also fluctuate, and by deriving income from multiple countries, your brand can withstand the ups and downs of money markets. 

Population, particularly when it pertains to your target customer, is another reason to consider entering a new international market. Your current market may have a limited number of potential customers or be oversaturated with competitors, so entering a new market makes sense. Some markets like India and China have an abundance of potential buyers for your product or service.

While all these reasons make sense, entering a new market successfully needs careful consideration and research. You should research and evaluate the eight areas before leaping into a new international market, and build a market entry strategy first.

Also read our blog post, “What are the Four Market Entry Strategies?”

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1) Behaviours of your target audience

Even if your product appeals to Gen Xers in your current market, it does not necessarily mean that it will have the same appeal in a foreign market. Even if the target audience is the same, it does not mean the target audience’s behaviours, wants, and needs will be the same. Even the slightest difference can potentially impact marketing messaging and product packaging.

2) Communication / Marketing Channels available

You may have a predictable marketing and sales model, but it may fall flat in other markets. In Japan, as an example, LinkedIn is not widely used because, culturally, Japanese people do not boast openly about their accomplishments, and the LinkedIn platform was built, in part, to promote career accomplishments. In Germany, LinkedIn is second to Xing. In many countries throughout Asia, WhatsApp and Youtube surpass Facebook and Instagram. In China, Facebook is not available, and WeChat is considered the Chinese version of Facebook.

Using existing marketing material may also be a challenge. While many brands take existing marketing campaigns and translate them into the local language, the marketing can often fall short or even come across as rude when the way locals prefer to communicate is not thoroughly researched and tested before launch.  

3) Cultural and language differences

We are all influenced by the society in which we live. Even in markets that speak the same language, like USA and Canada, Australia and New Zealand, and England and Ireland, the cultural differences can vary.

Cultural differences can influence every part of local life, behaviours, and even tastes. 

Fast-food chain Kentucky Fried Chicken (KFC) got off to a rocky start entering the Chinese market after it translated “finger-lickin’ good” into Chinese characters meaning “eat your fingers off.” It has abandoned the American market model and reflects China’s strong restaurant dining culture. KFC restaurants in China have larger eating areas to accommodate large families and groups. The menus are more prominent with more extensive and localized menu items, such as rice dishes and soy milk drinks. Side dishes like coleslaw and mashed potato proved to be unpopular and replaced with a palatable local fare, such as a salad of shredded carrot, fungus, and bamboo shoots.

Understanding cultural differences, including language and taste profiles, is a critical research phase before entering a market.

4) Regulations

Every country has its regulations, and companies cannot risk non-compliance. An international market may have laws and regulations you have never heard of before and, therefore, might be difficult for you or your team to wrap your head around. 

Companies need to know the regulations and laws around shipping, borders, employment laws, taxes, and other business standards in a foreign country. Navigating a new land can be exhausting. An in-house lawyer or an outside consultancy with experience in this area can be beneficial and might be needed. 

5) Payment methods

Payment methods can be vastly different overseas. Market research helps you identify what payment methods are used in the country you are entering and how you can support those payment methods in your business to grow your brand. If you are not using the popular modes of payment that people are accustomed to, you will lose massive growth opportunities. 

In Indonesia, for example, eWallets are popular, and most people use digital payment methods, with eWallet transactions reaching 18.5 billion in 2021. 

The Government of India launched the Digital India program to transform the country into a paperless, cashless society. 

Therefore, these are important considerations when entering a foreign market. 

6) Costs and Price Parity

In international trade, parity is the exchange rate between the currencies of the countries involved, and the purpose is to make the purchasing power of both currencies as close as possible. Market currency exchange rates allow you to adjust prices across countries. 

The Big Mac Index is a measure of purchasing power parity. Invented by the Economist in 1986, its purpose is to show the concept of purchasing power parity and demonstrates how price needs to be adjusted based on currency exchange rates. Global franchises and multinational corporations widely use the Big Mac Index to understand how to compare the cost of essential goods between countries. The Starbucks Index is another index that allows companies to understand price differences using the price of a Starbucks latte. 

Additionally, the cost of overheads may be very different in other countries. The real estate and rental market and the cost of utilities are a consideration, among other factors. 

Developing a pricing strategy in an international market is a complex project requiring detailed planning. Companies have to deal with currency fluctuations, regulatory issues, and cultural nuances when pricing products and services for international markets. A thorough market research plan is paramount when expanding into an Internationa Market, and it will give a company insights into its pricing strategy. 

7) Competitor landscape

It is critical to understand and analyze the competitive landscape when expanding into any market. Market research helps companies comprehend the potential competition in new, unchartered markets. This knowledge helps them make better decisions about how, when, and where to expand. It is a vital part of their business planning strategy. For instance, if a particular part of the country is already saturated with the given product or service, they can move their focus to a different part of the market. 

Market research can be daunting in the domestic market and becomes even more difficult in international markets. Therefore, it is essential to work with a knowledgeable and experienced market research company to analyze the competition in-depth. This will inform and guide the future of the company in that market. 

8) Market volume and potential growth

A product is as good as its market demand and potential growth. Market research will help you measure the opportunity so companies can understand how many potential customers their product or service will have in any given market. 

It becomes more complex to measure the opportunity in an international market, given the differences in economic conditions, for instance, in developed versus developing countries. 

These steps and considerations help show companies how to calculate market potential and help guide the process of international expansion. However, there might be many more things to consider when entering a new country. Several factors like the company’s growth stage, offering, industry, and business model will likely have unique considerations. 

Entering an international market is not a simple process, and it is essential to do the legwork and thorough market research to inform a well-thought-out market entry framework.  

For more in-depth insights, read our blog post, “The Ultimate Guide to Market Entry.”

Singapore has reigned supreme as a lucrative market for domestic and international businesses, and according to many economists, it is the best country to do business. 

So, what makes Singapore a favourable market for international companies?

Singapore’s location makes it an ideal place for foreign investments. The world’s busiest port and a pro-business environment position Singapore as an attractive market for foreign companies to expand into the Asia Pacific. 

#1. Singapore presents an excellent balance of East and West. 

Given Singapore’s colonial past and diverse population, there is much familiarity with many Asian, European, and American cultures. As a former British colony, Singapore’s legal, administrative, and taxation models are similar to those in the UK and the US.  

“Singapore builds itself on this position of being kind of like a trading post,” said Philip Steggals, Managing Director at Kadence International Singapore. 

Furthermore, English is widely spoken, and adopting a Western lifestyle has made Singapore an ideal international market. At the same time, Singaporeans are proud of their heritage, so it’s an excellent market for other Asian countries to enter. Therefore, Singapore is an ideal mix of the east and west and embraces everyone. 

#2. Singapore’s economy is very business-friendly. 

Geographically, the island of Singapore is small and lacks natural resources. Therefore, the economy relies on international operations. It has also focused on building a large manufacturing industry, making it a significant export market for the US. 

“The Government very much has that mantra of helping people either come into the country or helping people in the country expand regionally to grow their business and improve everybody’s lives,” Philip said. 

The government has also implemented economic policies to promote international trade and has a friendly business model. Foreign businesses are subject to the same laws as local businesses. 

Businesses can also use agencies to get the help they need to secure capital and set up their Singapore entities. 

“IE Singapore or Enterprise Singapore sits under the administrative trade, and it facilitates overseas growth of Singapore-based companies, regardless of nationality,” Philip said. 

There’s another entity called Spring, which plays a similar role in growing enterprises. 

“Spring is the place to go where you get quite a lot of government grants as well — the sort of tech investments and grants, which any small-to-medium-sized company can benefit from,” he added. “Then there is the Economic Development Board that also helps businesses. So the message is that if you are in Singapore and you want to grow, then we will help facilitate that process.”

If you have a good product or service, you could quickly expand it in Singapore. And if you’ve got a product or service that you’ve replicated quite well, Singapore is a great, safe, predictable market to grow it. 

The legal help you get in Singapore is very transparent and secure. With sound finance systems, it is easy to get loans. If you are an SME, you can walk into one of the local banks and set yourself up with all the business accounts you need, likely on the same day. Many banks accept digital signatures and allow opening bank accounts online. 

 “You can also easily find advisors who will help you grow into other markets or advise you on how to grow your business in Singapore,” Philip added. 

There is a massive opportunity for external investment, and international businesses own their companies 100% when they expand to Singapore. 

Geographically, being a small market, it’s easy to meet people, even in times of a pandemic, because everyone lives in a small area. “You can network quite easily, and you can find somebody that will have the right skillsets or advice for what you need,” Philip said. 

fitness-tech-trends

#3. Singapore also offers attractive tax laws to international companies entering the City, State. 

The government offers attractive tax incentives to businesses in Singapore. 

#4. Access to ASEAN.

Despite the small market, Singapore is well-known globally for its IP strengths and easy access to the broader ASEAN region. 

Top industries in Singapore

Tech, fintech and cryptocurrency, cyber security, and mobile payments are some of the fastest-growing industries in Singapore. FMCGs and food franchises from well-established brands overseas do very well. 

“Singapore is a centre for tech and innovation excellence. We have a lot of people that would typically be involved with big multinational companies setting up innovation hubs here or bringing their regional headquarters into Singapore,” Philip said. 

Main challenges of doing business in Singapore

More than 99% of all imports enter Singapore duty-free as a free port. It levies high excise taxes on distilled spirits and wine, tobacco products, motor vehicles, and gasoline.

Other industries that pose challenges for international companies include livestock, and services barriers that restrict satellite dishes, pay television, legal services, banking, and healthcare procedural transparency.

Philip listed three main obstacles for companies trying to build a subsidiary in Singapore.

“While it’s fairly easy to set up a business in Singapore, it’s a challenge to bring in mid-to-low-level employees, which then gives you two options. You either have to come in with some top trainers, or you have to come in and know that much of the work will be done by people that aren’t necessarily familiar with the business,” he said. 

“If you want to set up a business, you should be able to show that you are going to employ locals and, you’re going to train them so that they can eventually take over running operations and have more senior roles.”

“The job creation equation is what Singapore is looking for when you set up a business, so you should have a plan on employing Singaporeans,” he added. 

There is also fierce competition with other countries trying to enter Singapore, so international companies should be aware of this. 

Impact of covid 19 restrictions

Singapore has had some of the most stringent lock-downs during the pandemic. 

As a result, some businesses have shut down during the pandemic, and others have accelerated in Singapore, despite strict COVID-19 restrictions.  

“I think the pandemic has just accentuated what was going on beforehand,” Philip said. “However, one of the issues has been a shortage of labour force coming in from other countries. Many expats have also left the country due to stringent COVID-19 restrictions.”

keeping-up-with-Gen-z

What do Singaporean consumers want?

Price, quality, and service are essential factors for consumers in Singapore. International companies entering Singapore must know that the buyers are discerning and that the competition in the market is intense. Singaporean consumers also like products and services that are well established in their home countries and have a story or history behind them. 

So from a consumer standpoint, what are the key considerations Singaporean consumers have? 

According to Philip, that depends on the category. 

“We did some research on the luxury purchases made in Singapore and Asia. Consumers want to see some heritage and a well-defined story of where the brand is from and why it exists when it comes to the high-end market,” he said. 

“The German manufacturers do very well in the automotive market, and there’s a sense of prestige associated with the well-known European luxury car manufacturers. There’s also a significant segment of people that are very practical and go for Hondas and Toyotas.”

Food and beverage outlets do very well if they are well-established in their home market. Brands with their roots in China or Taiwan for some novelty-type items and popular brands in Japan also do very well, as do Korean skincare brands. 

In a nutshell, Singaporean consumers like understanding the brand’s roots, why it’s now Singapore, and what it’s doing. They are a discerning populous and are looking for quality products and services. 

Selling and distributing products and services in the Singaporean market.

Selling techniques utilized in Singapore vary by product and are similar to sales practices in sophisticated western markets. Social media and online marketing are growing in Singapore, and it is essential for international companies that use agents in Singapore to visit them regularly. 

“A lot of our clients at Kadence have their regional offices in Singapore because of a very transparent legal system. The government is also very predictable and pro-business, so if you’re going to set up a regional base, Singapore is the perfect place for it,” Philip added. 

A favorable time zone gives it another advantage and makes it suitable for business. The commerce or the distribution networks from Singapore to the Southeast Asia and North Asia markets is pretty straightforward.

“Moreover, the ease of commuting makes Singapore the perfect base for operations. It’s also typically relatively easy to get visas for higher-paid staff members here, and it’s not considered a hardship posting to be based in Singapore, regardless of your home country,” Philip said. 

How to strategize market entry into Singapore

If you have a successful product or service in your home country, expanding into Singapore is a good idea. One cannot emphasize the importance of a concrete market strategy and solid business plan for market entry into Singapore. 

Over 4,500 US firms have launched business enterprises in Singapore. Many international exporters use agents and distributors to enter Singapore. These agents and firms aggressively represent new products and services in Singapore. Therefore, it is invaluable to find suitable partners and utilize agents.

The top three strategies that subsidiaries can utilize when planning entry into Singapore are:

1. Identify your growth plan. Singapore as a market is not very large unless you are a McDonald’s type company. But for most industries, your potential is relatively small. The population is 5.7 million, so you must identify where else you can go. It would help to calculate your maximum potential returns based on your target audience. For companies entering Singapore, knowing that growth plan would be substantial.

2. You need to have a sound training system. As a small company with one or two people set up like a distribution hub, you will probably be fine, but as soon as you start growing, you will be expected to recruit more Singaporeans. Therefore, you will need to have training in place. 

3. Do your commercial research. The government is pro-business, so you must research who to ask for help and what benefits you can receive. 

Political and economic stability in Singapore

Singapore has had the same government since its foundation. 

One of the reasons behind Singapore’s massive growth over the past five decades is the consistency of government. “You can put long-term visions in place without your political parties, flipping it as a political winning system to get elected,” Philip said. 

Singapore has shown phenomenal growth in the last ten years and will continue to grow as it is a great place to live, and do business and is devoid of red tape or bureaucracy. 

The next 50 years will present new challenges to Singapore in the form of an ageing workforce, a maturing economy, social media’s growing influence, and increasing competition from other trade agreements and ASEAN partners. However, it remains an attractive market to enter and shows phenomenal potential in years to come.

We would welcome the chance to discuss your next market research project. Learn more about our Singapore Office here.

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Why consider developing a market entry strategy for India?

It’s very simple: India is a huge market. In population terms, it’s now on a par with China at around 1.3 billion people – and it’s likely to overtake its northern neighbour this decade. India is still a young country – 44% of its population is under 25 years old – and is seeing rapid growth in both its wealth and economic make-up, quickly becoming a global hub for technology and manufacturing.

It’s also seen massive urbanisation over the past 50 years, with six megacities in excess of 10 million inhabitants: New Delhi (31.2m), Mumbai (21m), Kolkata (15m), Bangalore (12.8m), Chennai (11.2m) and Hyderabad (10.3m). Like China, the latter years of the 20th century saw a rapid expansion in the middle class as the impact of globalisation opened international opportunities. The number of households with a disposable income of more than $10,000 a year leapt from around 2.5 million in 1990 to nearly 50 million in 2015.

India’s links with the rest of the world have not always been easy. Their historic relationship with the UK, for example, created lasting cultural ties, but is scarred by colonialism, too. Although India’s recent history as a global powerhouse has been tense at times, businesses from all over the world – and especially anglophone nations and Asian neighbours – are now deeply enmeshed in its economy.

Brands interested in getting into the Indian market will find a strong legal system, democratic structures, a broadly market economy (although with caveats – more on that below) and an entrepreneurial and aspirational customer base with wide interests and diverse patterns of consumption.

One problem for overseas brands coming into the Indian market is that many decision-makers outside the country retain a very mythologised view of India. It’s still perceived by some, for example, as defined by widespread poverty and fixed traditions. While there is poverty – as there is in every country – a rapidly growing middle class and highly advanced tech infrastructure tell a far more nuanced story.

Nevertheless, brands entering India must be ready for a land of diversity and contradictions. This is a nation with a successful space programme; but faces complex challenges resulting from inequalities. It has a thriving cultural industry, and produces (and exports) some of the world’s best medical professionals; yet is in the third quartile for life expectancy.

So it’s no surprise that businesses both large and small rely on local expertise to ensure they can navigate the highly diverse and nuanced byways, trends, localities, attitudes and expectations that make up ‘India’. And it’s a reminder that proper research of this market – or, perhaps, these markets – is an essential stage for successful market entry.

Understanding the challenges – the barriers to market entry in India

Before brands even get to researching the nuances of the different markets in India – and which of them might turn out to be fertile ground in terms of consumer or B2B attitudes and behaviours – they need to some investigate the practical issues confronting companies entering the market.

At the highest level, Prime Minister Narendra Modi has looked to extend the ‘Atmanirbhar Bharat’, ‘make in India’ or ‘self-reliant India’, policy to accelerate the country’s economic development. This is built on five pillars, which offer some guidance for brands looking to enter India on the country’s political and economic priorities:

  1. Economy – designed to deliver significant growth, not incremental gains.
  2. World-class infrastructure – to facilitate additional growth.
  3. Technology focus – where India’s vibrant tech sector offers strong foundations.
  4. Vibrant demography – harnessing the energy of diversity for self-reliance.
  5. Demand – a huge and growing population can massively fuel domestic economic growth with the right supply chain capabilities in place.

It also means restricting imports of many goods that might be manufactured in-country. Modi talks about creating a ‘new paradigm’ for job-creation and entrepreneurialism. “The mindset of free India should be ‘vocal for local’,” he said in August 2020. “We should appreciate our local products, if we don’t do this then our products will not get the opportunity to do better and will not get encouraged.”

In practical terms, that’s meant high-profile bans being phased in on imported armaments, for example (although not to universal acclaim). During 2020, the country’s three Covid stimulus programmes were labelled ‘Atmanirbhar Bharat’ packages; the development of Covid vaccines was cited by the Prime Minister as a success for the project; and India is planning a domestically equipped and run 5G network. There’s also been a push on loyalty to local brands in many consumer categories – right down to cooking oils.

Looking more broadly, India ranked 63rd in the World Bank’s latest Ease of Doing Business rankings, scoring well for investor protections, getting credit and access to utilities; but very poorly on enforcement of contracts, registering property and starting a business.

The rules for trade are also complex. Even after the departure of Donald Trump and his hostile trade policies, India maintains considerable tariff and non-tariff barriers to US trade. And only China has more entries than India in the UK government’s lists of trade barriers for businesses looking to operate abroad. True, some are minor – such as adding labels to food and drink products; others are in very niche sectors, such as the export of luxury yachts.

But non-Indian professional services firms – legal, accounting, architectural – face considerable barriers to entry. And finished cars (including second-hand vehicles) face a basic customs duty of 125% – which can be augmented with additional levies taking total duty in India as high as 260%. There are even moves to adjust duties on car components and kits to deepen the Indian manufacturing base beyond in-country vehicle assembly.

Both national and state-level controls and tariffs need to be evaluated, and it will pay dividends to take advice on specific sectors, categories and regional variations from both home-country trade advisory teams and local Indian experts on the ground. India is not, therefore, a place to skimp on market research.

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Opportunities still abound

But don’t think this means the door is slammed shut. “It’s not going back to socialist India – we want imports to come in,” said Finance Minister Nirmala Sitharaman, speaking at The Economic Times Awards for Corporate Excellence in 2021. She says the government has been selective in choosing sectors to face rising tariffs. And the policy is far from universal (or universally popular), despite the nationalist rhetoric. So change is not inconceivable.

Trade does remain vigorous. India was the 12th largest export destination for US goods in 2018 (worth $59bn, including services), and the EU exports around €33bn worth of goods and services to the subcontinent each year. And EU-India free trade talks restarted in 2021 after an eight-year hiatus. One recent blip has been Chinese exports to India, which fell 11% in 2020 – albeit to a still massive to $66.7bn. (Note that China remains a major geopolitical rival to India, which shapes attitudes to the trading relationship.)

The recent Britain Meets India report, prepared by Grant Thornton, highlights the scale of inward investment into India (between 2000 and 2020 an estimated $29.5bn of UK capital was invested in India – and that’s just 6% of global investment flows into the country). Trade between the two countries was worth $26.7bn in 2020 alone – even with the effects of the Covid pandemic – with UK exports amounting to around £8bn.

The presence of major global companies such as Apple – especially as an investor in local manufacturing capacity – shows there’s deep interest in working alongside both state agencies and domestic business partners to ensure access to this massive market despite import controls.

Netflix is another example. Despite some initial challenges regarding insufficient Indian content and the possibility of fresh regulation, it’s slated to release 40 local productions to steal a march on streaming rivals, building on its existing five million subscribers. (Although Amazon Prime’s own $2bn investment in India is making Netflix’s progress more challenging.)
So it’s no surprise that many countries are eyeing up India as a potential trade partner. In post-Brexit Britain, Prime Minister Boris Johnson wants to “more than double trade with India to £50bn by 2030”, according to texts of a (Covid-suspended) trade speech the he planned to give in India.

View of Mumbai

Developing a market entry strategy for India: should you go deep or wide?

Standing up the commercial rationale and the practical issues around doing business in the country is a vital first step for brands wanting to enter the Indian market. But the top-level data – the rules and economics– is only half the story. Scale, diversity and local nuance are also important factors, and these demand more careful evaluation.

At the outset of any market entry project, organisations will need to make a series of choices that demand much deeper research into their specific sector, the markets they want to address, and the different audiences they will encounter. In other words, what’s your aim, where will you focus your efforts, what products and services might succeed – and how might you translate this into a sustainable market position?

In a market as diverse as India, that idea of ‘focus’ is central to a successful project. Geographically and culturally vast, the attitude to many of life’s fundamentals differ widely between regions. Of course, there’s language to consider (more on this below). But behaviours and preferences also differ across geographical areas. For instance, in the eastern and southern regions, rice is the staple carbohydrate and hardly anyone uses fresh milk; in the north and west, people eat breads and powdered milk is frowned upon.

That’s just a couple of examples of the kind of consumption gulf that can exist – before we even get to the differences between urban and rural consumers, or cater to varied cultural touchstones.

A misstep many brands make when considering market entry is thinking about how to capture the Indian market as a whole, then. It can be much more valuable to consider which slices of the pie you might be able to go after – the better to tailor your proposition, branding, logistics and competitive position.

Market research in the field: be clear on your objectives when it comes to market entry in India

This idea of ‘focus’ is particularly important when it comes to the market research methodologies you’ll need to inform your market entry strategy.

Imagine a global brand looking to understand its status or opportunities in lots of different markets. It decides to survey 200 consumers in a couple of dozen countries. In Germany – no slouch with over 80 million people, and some marked regional variations of its own – such a study might yield usable national results. But in India, just the top six megacities – each with a very particular identity – comprise over 100 million consumers. Those 200 interviews are only going to scratch the surface of the big cities, let alone the emerging conurbations and rural population.

There are two possible solutions. First, massively increase the sample for India to reflect its scale. Or second, as we mentioned earlier, focus in on higher-probability markets assessed in partnership with local research teams. It’s not simply an either/or choice, of course. But it highlights the need to make some very clear and well-informed decisions right at the outset of any market entry project.

Find the right partner: local research for local people

Because of the diverse nature of India, the key to a great research partner in India is coverage. That starts with teams based in the country whose ability to advise on high probability areas for focus will be much more acute than agencies based outside India.

Then it’s a question of being able to conduct research effectively to flesh out the objectives of that initial focus. The project leadership will need to understand the different regions – and in many cases, have a clear idea about the unique profile of the 28 states and eight union territories that make up administrative India (with all the conditions they impose).

With 415 living languages (22 of them ‘officially recognised’ for the purposes of administration) and countless local cultural nuances, research teams with local sensitivities are understandably valuable. (We joke that every 5km in India the language changes – but watch out, because every 2km there’s a new dialect…) Our teams speak a broad range of languages enabling us to conduct market research across the length and breadth of India.

Harness technology – India’s secret sauce

India is a global leader in technology, boasting one of the largest and best-trained IT workforces in the world. This is no flash in the pan: Indians, particularly in the middle classes, but increasingly across society, are heavy users of connected technologies and mobile devices. It’s a world leader in low-cost data plans, too, and smartphone adoption is widespread enough, even in many rural areas, to allow for the new generation of online research methodologies to make their mark, alongside more traditional face-to-face approaches.

When it comes to online research, to reach the urban middle classes, laptop-based methodologies should work well. It’s worth bearing in mind that good bandwidth can be spotty – which means limiting the use of video-intensive approaches – but surveys and even text-based communities can work really well. And with the level of smartphone penetration even outside the cities, there is even an opportunity to exploit app-based research or community platforms to build long-term engagement and insight.

Watch, too, for the roll out of India’s own 5G network. Like any country – especially one as vast as India – coverage will be limited at first. But as penetration grows, it should offer new opportunities for richer research projects.

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Notable openings – target sectors for a market entry strategy for India

We’ve already noted that global brands in new categories are making a play for Indian consumers – such as Netflix and Amazon Prime in the streaming video space. So where else might brands research a successful move?

Premium brands

While ‘made in India’ is politically potent, for less price-sensitive consumers there remains an affection for overseas brands – particularly those with a reputation for quality and durability. Indian firms are catching up fast (its domestic chocolate brands see huge growth in premium products, for example), but the opportunity persists for now. As BCG noted in 2017, “Consumers in emerging cities… have high purchasing aspirations but are often constrained by product availability.”

Auto brands

While domestic makers Tata and Maruti Suzuki dominate (the former state car-maker now owned by the Japanese motor giant has about half of the market), tech and usage transitions create openings for overseas brands if they partner with local industry. India’s passenger vehicle market is something of a roller-coaster: a period of strong growth was halted in 2019 – unit sales fell 12.75% to 3 million – then further slowed by the pandemic. But the long-run pressure on enhanced mobility should present opportunities.

Fast moving consumer goods

Although this has been a target of the ‘vocal for local’ campaign, there are brands such as Unilever that have retained a dominant position in many categories. That suggests there is an option to leverage strong brand image to gain a firm foothold. In areas such as confectionary, for example, French/Belgian group Barry Callebaut sees huge growth opportunities. Kellogg’s initially struggled in India – it was overconfident with existing product and marketing formulas – but has carefully tailored its approach to succeed.

Youth brands

In more traditional rural areas, the division between young and old is less marked. But in bigger towns, fast reliable internet access and varied career opportunities mean young Indians are developing a more global outlook and in many cases, that creates fertile ground for international and ‘cool’ brands. With a median age of just 28 (across Asia as a whole it’s 32) and the ‘millennials’ ascent into higher income brackets, catering to youth in India has huge upside.

Top tips for success

It’s impossible in a market this large and diverse to offer up general principles that will hold true everywhere. But some of the research basics will serve brands well in India – and there are some tips for making market entry a success.

Let experts find you a product/market fit.

Desk research can take you so far, but local expertise will make the process of investigating high-probability markets much quicker and more effective. Kadence’s India team know where to find the populations that dovetail with your product values and attributes.

Adapt brand, marketing and packaging.

Try to get ahead of cultural biases with your presentation – from packaging (where hygiene and transport conditions are a factor for many Indian consumers, incidentally) to the language used. Guidance on these issues should drop out of your initial product/market fit conversations.

Target your fieldwork carefully.

If you’ve been clear on the product or service qualities and work with local experts who can identify more fertile ground, this ought to be easy. Fieldwork costs can mount up in India – and poorly targeted surveys are both money and time wasted so think carefully about the people you want to reach and how best to achieve this

Stay relevant.

India is a fast-evolving nation and its consumers’ tastes are changing too. Customers will reward brands that stay in touch with them – either through programmes such as loyalty schemes or through longitudinal research projects. These same methods are ideal for spotting emerging local and international rivals, as well as shifting attitudes towards overseas brands.

Above all, respect the fact that India is a single nation in many respects, by a diverse collection of people in others. With 1.3 billion people to satisfy, even the kind of precise targeting we recommend for overseas brands can open up vast potential markets. India is not for the faint-hearted. But the upside is enormous.

Developing a market entry strategy for India?

To find out more about how we can support your organisation to break into a new market, learn more about our market entry services or get in touch to discuss a potential project. Alternatively, you can consult our market entry resources – from our ultimate guide to market entry to our tips for breaking into China.

Launching a new fast-moving-consumer-goods (FMCG) product is a process wrought with challenges and notoriously difficult to pull off successfully. In fact, it’s such a treacherous domain that approximately 80-85% of all FMCG launches fail! So how do you successfully launch a new FMCG product in the market?

Companies need to do all they can to maximize their chances of success when it comes to launching their product. This means getting all the different stages of the process right, investing the right amount of time and resources into planning, and making use of all the tools and knowledge at their disposal.

In this article, we’ll show you how to launch a new FMCG product in the market successfully. To do this right, you need to start at the very beginning by considering what makes any FMCG product successful.

What makes an FMCG product successful?

There are a number of factors that successful FMCG products have in common. Let’s take a look at 3 things that separate good products from failures.

They’re distinct

Successful FMCG products have to offer something that sets them apart from all the other similar products on the shelves. However, this can be a tricky balancing act — you don’t want your product to be so different that it moves away from what the customer wants. 

If, for example, you’re selling a brand of instant coffee, you know your customers want some variety of coffee that they can pour into a mug and get a fresh beverage in seconds. But at the same time, you want your product to stand out and offer something more than all the other instant coffee brands. 

Brands that can strike this balance right and create a distinctive FMCG product that continues to delight the customer will be on the road to success.

They’re what people want right now

The FMCG space is defined by being in a constant state of change and flux. Innovation is happening all the time, and people’s tastes are constantly changing.

Successful FMCG products are able to tap into trends and popular demand, giving customers what they want right now as opposed to what they wanted five years ago. For example, as people become more health-conscious their taste in snacks has changed. The companies who picked up on this change in demands and adapted their product offering to include healthy, low-calorie, high-protein snacks were the ones most able to adapt and succeed in a changing market.

They persist

In a market where goods go in and out of fashion quickly, brands that can stand the test of time are at a huge advantage. Household names like Coca-Cola, L’Oréal, and Nestle are household names because they’re masters at staying relevant and in-demand in markets that are prone to constant change.

Doing this successfully requires an intimate knowledge of your market and customers and a knack for constantly delivering even as tastes and trends evolve.

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Why do FMCG product launches fail so often?

There are lots of reasons why launching an FMCG product is so hard and why so many fail. Here are some of the main reasons FMCG launches tend to come up short.

It’s a competitive space

There’s no getting around it — there are lots of FMCG products out there. When you enter this market, you’ll be competing with many other brands, brands that have often been in the game for many years.

If you don’t get it right from the very beginning, you’ll never be able to effectively compete and your target customers will go straight to the brands they have been using for as long as they can remember.

Failure to use data and market research properly

Today’s businesses are blessed with more data than ever before in history. Much, much more. And this can be augmented by wider market research to understand the market, the key trends at play and reactions to your concept or product. If used correctly, this data and insight allows you to better understand your customers,  and launch a product that takes the market by storm.

Unfortunately, many FMCG brands fail to tap into that rich reservoir of data, missing out on the advantages it offers and instead launching a product that isn’t closely aligned with what customers want.

Development costs and lack of funding

Another characteristic of FMCG launches is that they’re expensive. Developing a successful FMCG product can cost a huge amount of money, and this typically requires a lot of reliable funding and investment.

If you fail to secure enough funding for your project, you’re setting up the entire launch for failure.

Failure to understand timescales and stick to them

Launching an FMCG product involves a huge number of moving parts and deadlines. If you aren’t careful, it’s easy to mess this up and end up falling behind the dates you promised.

One clear example is shipping times. If your product fails to reach your customer within the time they expect, you’re creating a recipe for canceled orders, damaged reputation, lost money, and a failed launch.

Failure to understand the importance of constant innovation

The FMCG space is defined by constant, ongoing innovation. Companies are investing vast sums of money into making sure their next product is enough to stand out from the fierce competition and keep customers delighted. To survive and succeed as an FMCG brand, you need to be constantly learning, adapting, and innovating. It never ends, and it’s the only way to avoid failure.

Consumer looking at FMCG products

How to launch a new FMCG product in the market successfully

Understand the market and your customers at the outset through market research

Understanding your customers and the market is absolutely critical when thinking about how to launch a new FMCG product in the market. You need to know as much as possible about your customers’ pain points, desires, their demographics, what they’re already buying, and more. 

Understanding the broader market you’re operating in is important too. This can help you identify trends to capitalize on and size the opportunity for your FMCG launch. 

This research should take place long before the product launch, in the initial stages of planning to help inform the ideation process.

Testing, testing 

Research is also important later in the process when it comes to testing your ideas with consumers. Quantitative concept testing can help you whittle down your ideas and select the ones with the best chance of success to take forwards. Qualitative concept testing can help you to further refine those ideas in line with consumer wants and needs. There are also other elements of research to consider further down the line once you reach the prototype stage, such as pack testing, central location testing or test tastes to optimise your product ahead of launch. 

You can read more about what research you need to consider at each stage of the new product development process in our guide. 

Get your marketing right

Effective marketing is a crucial element of every FMCG product launch. Use insights from the NPD process to guide your messaging – on the pack, at the point of sale and in your marketing and comms – to cut through with consumers and steal share of market.

Always be learning 

Testing should be an ongoing process — make sure you continue to test, measure and learn, even after the product launch. Collecting data, and making tweaks in response to the feedback you receive can help inform product relaunches or line extensions to keep you at the forefront of your category. 

Launching an FMCG product is no mean feat. It’s famously hard to pull off, and statistically most brands who attempt it fail. But that doesn’t mean it’s impossible, and with the right approach and expertise, you can significantly improve your chances of success.

To find out how Kadence can help you boost your chances of success with an FMCG product launch, get in touch.

Entering the Chinese market is a strategic priority for many brands. But like any market entry project, whilst the rewards are great, so are the risks. Success relies on conducting nuanced research so you’re able to develop a comprehensive Chinese market entry strategy. In this article, we’ll share our top tips for getting this right based on our experience helping brands across categories break into the Chinese market. You can also conduct our ultimate guide for market entry for further information.

The pros and cons of getting into China

Potential market entry benefits and barriers in China

Benefits to exploreBarriers to consider
There’s money to be made there. It’s a huge and growing economy.China is incredibly competitive – with both domestic and foreign brands in play.
Consumer appetite is evolving all the time, creating openings for new brands, products and services.It’s dangerous to make assumptions about the state of the market – and long-term planning can be tough.
Wealth is spreading, creating evolving demand and growth in most categories.There are still huge differences between the top-tier cities and the rest; and between urban and rural markets.
Chinese consumers tend to like branded goods and seek out quality where they can.Domestic Chinese brands have upped their game into premium spaces.
“If you can make it there…” Learn the lessons from breaking into China, and you’ll have valuable insights for other international expansion.China has some unique attributes – including tough regulation of key industries and some long-standing consumer attitudes that might never shift.

All that being said, China is obviously a vast market, with 1,394,000,000 people. That means even capturing a small niche or focusing on one region or even city can result in big revenues.

China has more than 600 cities often broken down into four tiers. First-tier cities including Beijing, Shanghai, Guangzhou, Tianjin and Chongqing are usually classified as having a GDP over $300bn (about the size of the entire South African economy). In these, and the tier-two cities, there is widespread demand for products and services that aren’t being catered for domestically.

And despite the fast development of homegrown brands, for many consumers, overseas brands retain an allure. So although the execution of any brand proposition needs to adjust to the needs of the market – and in a country as diverse as this, market research proves itself invaluable in this respect – a look at China must be a consideration for any growth-minded business.

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When to consider developing a China market entry strategy

We see a few different prompts for brands wanting to explore the Chinese market. One is where similar products or services are performing well there, with attributes that might be replicable. For example, we’ve seen strong demand for premium Korean cosmetics recently – it’s a sign similar propositions might fly. In niche areas such as luxury handbags and cars these is a persistent strong demand for foreign brands.

Those buying patterns are highly visible. But we can also pick up less obvious trends in consumer behaviour that give clues as to potential in China. For example, we’ve seen a growing love among the Chinese middle classes for avocados. (It’s not just 2016-vintage millennial hipsters!) That suggests possibilities for brands that take the time to probe shifting attitudes.

In the first case, then, we’re looking for product features and brand offering. In the second, we’re exploring new consumer behaviours – although in each case we need to evaluate whether this is a fundamental change in consumer mindsets, or just a fad.

Underlying all that needs to be the economic rationale for entering the Chinese market. We might be able to detect strong potential demand. But will the costs of entering and sustaining this vast market – especially given its competitive nature – make sense? Remember that China has a number of regulations on commerce and media. We’ll come back to that later, but it has a bearing on the risks, and therefore the economics, of market entry.

Don’t be arrogant – success in China isn’t guaranteed

It should be obvious by now that one of the biggest opportunities is bringing in a premium, overseas brand to woo and wow the expanding Chinese middle class. But don’t be fooled by that stereotype – and don’t assume that you can just transplant existing brand approaches and expect to deliver results.

For a start, the way you deploy advertising and tailor packaging will be crucial. Chinese consumers will often be swayed by the way brands are presented, so understanding exactly how people are responding to the brand image and packaging can’t be ignored.

Then don’t assume just because you’re a foreign brand that you’ll attain a ‘premium’ differentiation. Fifteen years ago, there was almost an automatic patina of exoticism attached to non-domestic brands; they were more likely to be seen as classy and rare, helping maintain margins. Today, local brands in many categories are considered to be delivering a premium, too. And for many consumers, reliable quality and attractive features are the acid test, not the brand image.

Categories are not universal

Market research can reveal exactly how your brand might be received, and whether or not it’s going to attract any kind of premium. It’s also extremely useful at understanding which parts of any given category represent an opportunity in China – and which might be duds.

At a recent industry conference, we heard how a extremely well-known global drinks brand approached this problem. Ideally it would have rolled out its full slate of premium-branded alcoholic beverages, creating leverage around ad spend, logistics and exploiting halo effects. But while whisky is a strong segment in China, for example, wine is a much smaller niche.

At that point, another decision comes into play: research might show you which sub-categories are worth pursuing. But you also think how to enter these sub-categories. For that luxury drinks brand, for example, do they pitch the quality of the alcohol? Is it trying to project ‘conviviality’ for consumers? Is it the product heritage – seeking that ‘foreign premium’ angle? Or is it the look and feel of the products on the shelf?

The same rule applies the other way around. Yes, there are categories that are highly unlikely to be fertile ground for overseas brands – such as food, for example. It’s intensely competitive, demands a sensitivity to local tastes … but yet there might be openings in the right niche.

Or take transport. In electric vehicles, China is some way ahead of most non-Chinese manufacturers. But outside that sub-category, partnerships with local auto-makers and dealers could yield good results. Research can help uncover where these niches might be.

Cars at night, China

Learn from others – analysing the China market entry strategy adopted by others can set you up for success

The Chinese market has been growing at pace for 40 years, so at this point there are few areas where someone else in your sector hasn’t had a go at joining the fray. Indeed, many big global businesses will have in-house experience of breaking China – and making sure the lessons from one brand, product, category or local market entry are learned for subsequent attempts is obviously crucial.

Then look at the history of the category – there will almost certainly be rival brands that have tried and failed to launch in China before you (and some that have succeeded). Analysing what they did right and wrong can reveal all kinds of lessons.

Marrying those insights with up-to-date and well-briefed market research is a recipe for success. The phasing goes something like this:

  • Work out where the existing opportunities lie – what can we see from published market data, the level of competition, and products or services doing well in similar markets (especially in South East Asia – countries such as Indonesia and the Philippines are also fast-evolving, diverse, vibrant and digital)?
  • Evaluate local competition, emerging players, and regulatory and economic risks. These will include local rules on product specifications, or potential requirements to partner locally.
  • Work out why there’s a gap – and why you’re well placed to exploit it. Landscape studies should also highlight consumer appetites that will help or hinder progress.
  • Look at who’s failed doing something similar and why; and who’s made their inroads work, and why.
  • Research the evolution of the market – things change fast. Who’s up-and-coming? What are the evolving consumer habits? How will you stay on top of changes?

“Can my brand expand in China?”

Regardless of what you want to test, brand is a key issue in Chinese markets. Food, for instance, is a crowded market, so launching a new product to stretch the brand is always tricky. Research can tell you whether halo effects will work in China – and how to exploit (and not devalue) existing brand equity.

For example, we recently worked with a confectionery company on the possible launch of a newly acquired brand in China. We ran taste tests, but also explored what the new brand might mean to Chinese consumers versus how it would be perceived under the umbrella brand of the parent company. 

China is a fairly mature market, and there were a similar products in the market. So was it worth bringing in the new brand? Should they use the parent company’s branding to muscle into the segment? A big issue was how the new product might alter the existing overarching brand story if that was the case. Should it be a standalone brand?

We focused on one tier one city to establish the opportunity. In tier three or four cities, responses might have called into question the brand strategy – but the top-tier cities where a particular strategy might work are a very sizeable market on their own. But it’s still worth developing insights to frame that brand strategy, not just tailor a product.

The product’s premium taste and lavish packaging made its core product a hit for gift-giving Chinese, even at premium prices. But this project showed there are important areas for research to test what powers a brand has in new spaces in a market as sophisticated as China.

Shopping mall in China

Research – set a baseline, monitor change

China’s rapid evolution means ‘the future’ is much nearer than many people think, however. We can assess the probable changes over the short term; the plausible over the medium term; and the possible in the long term. But when we research Chinese markets and opportunities, it’s extremely wise to keep an eye on what looks ‘long term’ because it can arrive quicker than in many other markets.

That’s one reason for entering the market with as detailed an understanding as possible is important: yes, it might change quickly – but you need a solid framework for local conditions and consumer attitudes to ensure you can monitor what’s changing, how fast and in which direction.

The good news is that Chinese consumers, very broadly, tend to be very tech-savvy. (The WeChat platform, for example, is more widespread than Facebook – with about a billion active monthly users, it’s near-universal – and has many more practical applications.) This tech-savviness is particularly useful for conducting online research, allowing for fast-turnaround methodologies and investigating consumers outside the big tier one cities. In short, it’s ideal to capture rapid changes from the baseline. And unlike some Western markets, China’s older population seems determined to be digital, narrowing the gap we see in some other countries’ research approaches.

But we would rarely suggest only conducting research online. In the huge markets of the big cities, face-to-face research is still the best way to test behavioural and experiential aspects of consumers’ lives and tailor your approach to their unique expectations and requirements.

Top tips for market research in China

  • Be open about what you want to achieve in China and be realistic about who the product or service might appeal to. China is huge and diverse, so pace yourself and target realistically.
  • Calibrate your results. It can feel daunting competing in a crowded marketplace with strong domestic rivals. But it’s a long game: what look like tiny positives from research compared to other markets can be valuable toe-holds, establishing your brand for more serious revenue growth later; or guiding your focus on high-potential niches.
  • Tailor your questions. You can’t be too assumptive about what people might be prepared to pay for a product or service and asking standard questions in surveys and focus groups might not help. Get your research team to develop a China-specific (and even city-specific) research plan to get into the nuances.
  • If it’s online, think mobile first. Not everyone has a laptop but due to encountering a “technological leapfrog” most people have a smartphone. You can conduct extensive studies very flexibly with mobile methodologies.
  • Test the tech. China does have more controls on internet activity than most. Test that the research platform functions properly, especially if running a study from outside its borders.
  • Work with local experts. Research teams with local knowledge and experience will be invaluable. These tips come as second nature and on-the-ground teams or those in the region with an intimate knowledge of China. They will provide essential depth to research – and frame insights more meaningfully.
  • Think about the media. Consumers love to use their phones to research brands and products, and especially influencers and social media users. Willingness to try brands often stems from these forms of media.

In most other markets – that are less fast-moving or exciting as China – your traditional strategies can secure your traditional wins. In China, research can tell you how and where you might chip away at competitors to help you target your offering more effectively – winning a slice of this lucrative market. It can also help you create a China strategy where the wins look entirely different – and deliver results that make a real difference.

If you’re considering entering the Chinese market, get in touch to discuss how we might be able to help you to build your China market entry strategy. 

Whether it’s an entirely new geographical region with a range of cultural, linguistic, and economic factors to consider or just a new age demographic — breaking into a new market is rarely easy.

There are all kinds of risks to try to mitigate and hurdles to overcome. Brands will never manage to avoid every potential pitfall, so a degree of complication should be expected. 

Businesses that can minimize these risks and challenges can reap serious rewards. In this article, we’ll look at 5 of the biggest risks and barriers businesses typically face when entering a new market.

Let’s start with the risks.

The risks of market entry

There’s no risk-free way to enter a new market. Some may be easier than others, but problems are always possible. We can break down market entry risks into three main categories — internal, external, and legal. 

Internal risks for market entry

Internal market entry risk factors are those that come from within the organization. These are generally easier to control than external risks but are often unpredictable and seriously damaging.

Management and organization 

How well is your company structured? In your home market, it’s sometimes possible to function successfully with a flawed organizational structure. However, those drawbacks can become painfully obvious when you enter a new market.

Some common management mistakes include:

  • Unclear vision from leadership. A lack of coherent vision from the people in charge can lead to widespread confusion and inefficiency. Ensure your goals are established and communicated to everyone on the team.
  • Sudden staff changes. When a new member joins the team to replace someone else, they must have all the necessary information and direction. Failing to do this can often result in failures in communication and significant setbacks when entering your new market.
  • Lack of coordination. Working together effectively is critical in a new market — especially one far away from your home market. Your team members must be on the same wavelength, up-to-date with current processes, and in regular communication with each other and leadership.

Human error

Human error is one of those risks that we can’t always control. Mistakes happen in business and life, and while we can’t predict them very accurately, we can certainly say that people will make mistakes.

When entering a new market, a simple mistake can set a project back and send out ripples into the entire process. Usually, one or two small mistakes won’t mean the end of the world, but a series of minor errors can add up.

That could involve failing to convert currency accurately, using the wrong measurement units, or giving incorrect advice about cultural norms. In these cases, one small mistake can quickly snowball into a major setback if nobody catches it.

Logistical issues

Things like delays, accidents, labor shortages, transport and delivery problems, and other logistics and infrastructure challenges can be significant roadblocks for businesses when entering a new market.

These hurdles are especially relevant when expanding into developing countries and regions. Here, infrastructure and technology are often very different from what you might be used to in your home market, so it will be harder to predict delays and disruption. 

Markets in developing countries sometimes use more manual processes, so there is often a greater need to work closely with local teams and sometimes the need to adapt your services.

Tech issues

The technology and equipment you rely on as a business won’t always work seamlessly. One considerable risk for market entry involves technology failing to get the job done effectively in a new market.

One example is the Internet of Things devices, which can be powerful assets for businesses when monitoring conditions and optimizing processes in manufacturing. However, if your devices or networks fail, it could cause a significant setback.

If you’re looking to enter a developing country, it’s worth bearing in mind that technological infrastructure can differ greatly from your home country. In some countries, we’ve seen a leapfrog effect, where newer technologies have been adopted to a greater extent, as there are fewer issues with moving away from legacy systems.  

Cash flow problems

Entering a new market requires a lot of financial resources, and if the supply of money is interrupted or halted, it can cause major problems for your operation. If not promptly dealt with, internal issues like this can quickly stop a market entry attempt.

External risks for market entry

Businesses must contend with many external risk factors and risks that stem internally within their organization. These can be much more difficult to control and are often unpredictable.

Regulations

It’s essential to be aware of and comply with the local laws in your chosen market. One recent example is Europe’s GDPR law which requires anyone doing business with European customers, or any company based in Europe, to adhere to strict data privacy rules.

Local regulations and requirements are often overlooked — and this can be especially tricky in emerging markets where regulations can be harder to interpret if you’re unfamiliar with the landscape. 

Failing to keep up with regulations can be high — the maximum fine for GDPR violations is €20 million or 4% of your annual global revenue. A mistake here can seriously damage your entire company, not just your new market activities.

Politics

Politics can be hard to predict anywhere in the world, although businesses can be reasonably confident that radical changes won’t disrupt their market entry efforts in stable regions.

However, all bets are off in less stable parts of the world. Revolutions, wars, and sudden and significant new legal changes are just some of the political risks you must contend with when entering a new market.

Sudden changes to government can have severely damaging effects on your business. One example is when Fidel Castro’s government took control of Cuba in 1959, seizing hundreds of millions of dollars of US-owned property and companies.

Social unrest

A country (and a market) is nothing without its people. Events involving social unrest and widespread disruption are constant sources of risk for businesses in many markets around the world.

Riots, protests, and revolutions can cause damage to premises and shut down businesses for long periods, while nationwide strikes can leave you without a workforce. It’s crucial to have a plan of action to ensure survival during civil unrest.

Major non-violent social movements and trends can also impact your business. If you fail to show solidarity or are perceived as insensitive to a specific public sentiment, this could cause reputational damage.

Cultural differences

Entering a new market often involves introducing your business to an entirely new culture, which comes with a whole host of new risks.

Brands need to be aware of different customs and cultural nuances. Failing to adapt can impact how your products and services are received in the new market. You’ll need to consider how culture will affect how your new customers will receive your marketing. A television commercial beloved in Western cultures might be perceived as grossly insensitive in more conservative cultures.

It’s easy to get excited about entering a new market and the potential it might offer your business, but you need to do your research upfront. Is there actually a market for your product? Will it need to be adapted for success? And at what point does this become unfeasible? 

Knowing when not to enter a market is just as important as knowing when to invest. 

Natural disasters

It isn’t just people that businesses have to worry about when entering a new market — nature itself is often working against them. Natural disasters are a significant source of risk when establishing a presence in certain parts of the world.

Hurricanes, earthquakes, floods, droughts, and many other disasters can quickly stop any market entry effort. They can destroy property, interrupt shipping, and close down entire economies in hours. Worst of all, it’s often impossible to predict when the next disaster will strike.

One way to mitigate damage is through insurance, although coverage in developing countries has historically been low. Research shows that only about 1% of natural disaster-related losses between 1980 and 2004 in developing countries were insured, compared to approximately 30% in developed countries.

Market issues

There are several external risks in the market. These can take the form of unexpectedly tough competition, fluctuations in the cost of services and resources your business relies on, and volatile exchange rates, leaving a dent in your profit margins.

Legal Risks

There are many legal risks to consider when entering a new market, and this type of risk encompasses internal and external activities.

Every region in the world has its own set of laws and regulations, which can change significantly even between parts of the same country. For example, it’s legal in many U.S. states to sell cannabis; however, this could carry a severe penalty in others.

Some legal risks to consider are lawsuits, patent rights, and data privacy regulations. To ensure you stay on the right side of the law, you must work with local lawyers in your target market. A major legal setback like a big lawsuit could end your market entry campaign, so ensure you stay on the right side of local laws.

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Barriers to market entry

As well as risks, there are also multiple market entry barriers to consider. Fortunately, these are far more predictable than the risks mentioned above. It’s almost guaranteed you will encounter these obstacles during your market entry journey, so it’s easier to prepare for them. 

There are many barriers, but we will cover two of the main ones here – costs and marketing challenges.

Costs

Entering a new market is a costly endeavor. You’ll generally need considerable resources to make this happen, and costs can be much higher than expected. 

Some market entry campaigns cost less than others — trying to reach a domestic demographic with your product is more financially workable than establishing a solid presence in a foreign market such as China.

A successful market entry will allow you to make back your investment over and over. But it’s important to understand what costs you might need to consider when entering a new market.

Export and import costs 

Moving to a new overseas market typically involves a certain amount of moving goods across borders. Even if you establish a manufacturing base in your new market, there will be costs associated with importing certain materials and goods from your home market.

Switching costs 

This refers to the cost involved in switching to a new supplier, brand, product type, or alternative. You might have to do this a number of times when entering a new market, and these costs can add up quickly.

Marketing costs

Reaching your target audience in a new market will require a certain level of expenditure, depending on how well-known your brand is. For example, KFC opening a restaurant in a new region will have less work to do than a smaller and less famous company. Costs include market research, advertising, digital marketing, and analytics.

Access to distribution channels

This is how you make your product available to your customers. Accessing and managing a distribution infrastructure in a new market comes with various costs.

It’s important to anticipate as many costs as possible when entering a new market. Even if you do a great job of this, it’s likely that some costs will still spring up and take you by surprise. Make sure you have the financial resources available to handle these unexpected expenses.

Getting your marketing right

As well as the many costs associated with market entry, another barrier facing companies involves marketing.

Marketing is essential to make your voice heard and your product known in your new market. You need to immediately start connecting with your target customers across various channels and establish your brand as an option.

Marketing in a fresh market comes with a range of challenges. We already covered costs above, but here are some other key marketing considerations:

Demand

Before you even set foot in a new market, do enough people want to buy your product? Your marketing campaign will be an uphill struggle if there isn’t existing demand for your offering. It’s much easier if people are already clamoring for what you have. This is where market research is crucial for helping you to size the opportunity. 

Competitors

Entering a new market means — most of the time — walking onto another company’s turf. You’ll need to show your target audience that you can offer something better than your competitors. 

Brand identity

Your brand has an identity; it can take a lot of work to import that identity and everything associated with it into a new market. How do you establish yourself in a certain way and send out the right message to your potential customers? Again market research is vital here to understand what to retain and what to adapt. 

Customer loyalty to existing companies

We already mentioned your competitors. Many of the customers in your new market will have existing loyalties and strong ties to them. Luring customers away from a brand they have used and loved for decades is much more complex than simply attracting a new customer to your brand. You must stand out, offer something extra, and communicate this clearly. It’s worth paying attention to your competitors and what people like about them.

How will you reach your audience? 

Consider how the people in your new target market get their information and spend their time. For example, if you’re targeting an older demographic, investing heavily in influencer marketing might not be a good idea. On the other hand, magazine and TV ads may work to great effect.

Cultural issues 

If you’re expanding into an overseas market, you’ll need to consider the differences in culture and how this affects the tone of your marketing. Make sure your messaging doesn’t come across as offensive or inappropriate or appear tone-deaf due to a lack of understanding about cultural nuances and norms. Understanding cultural differences is an area where it pays to work with people who understand the culture intimately. Take the case of Starbucks — whose attempt to break into the Israeli market fell flat due to hubris and a lack of understanding of what the Israeli customers wanted. 

Marketing can take a lot of work to get right, which is even more true when entering a new market. The most important thing is to research your new market as heavily as possible and gather as much information as possible before beginning your campaign. Also, be prepared to adapt your approach as you go along in response to data and feedback.

Market entry always comes with a massive amount of risks and challenges. No business can escape this, not even those with a global presence. 

But when you get it right, you can reap significant rewards. 

Kadence has helped companies of all shapes and sizes research their target markets and gather all the intelligence they need to lead an informed and successful market entry campaign. To find out how we can help you do the same, check out our guide to market entry or get in touch today.

How do you enter a new potential market?

Expanding your brand into new markets allows you to reach potentially vast numbers of new customers and grow your revenue massively. However, the process can be complex and filled with complications.

A market entry strategy maximizes your chances of success when moving into a new market. In this article, we’ll look at some reasons to consider moving to a new market, the differences between domestic and international markets, and some strategies you can use.

Market entry defined

Market entry strategy is a plan to expand the visibility and distribution of a product or service to a new market. Market entry research helps brands to expand into new domestic or international markets where the competitive, legal, political or cultural landscape might be less known. 

Market entry research is the path to understanding a new market. It helps brands identify different success factors, reveal potential challenges, and discover hidden potential opportunities.

Why move to a new market?

First up, why should you consider moving to a new market in the first place? It’s challenging and expensive, so what are the reasons that make it worthwhile? Here are some of the main ones:

  • You’ll gain more customers and make more money – The number one reason to consider new markets is to grow your business and increase revenue by selling more products to more customers.
  • There might be no more opportunities for growth in your home market – If you’ve maxed out what your local market is capable of in terms of revenue, expanding to new markets may be the only way to grow.
  • You’ll reduce risk by diversifying your business – If one market suffers for whatever reason, you’ll have others to keep you going.

Domestic markets vs. international markets

Are you planning to enter a new domestic market or take your products overseas to sell in a foreign country? The approach for each of these will be very different.

Domestic markets

Typically, this will be much easier than entering an overseas market. The culture will be the same, everything will be geographically closer, and things will likely be very similar to your existing markets.

International markets

Global expansion is where things become more complicated. You’ll have to factor in several differences in how you currently run your business. These include:

  • Cultural differences
  • Administrative differences
  • Economic differences
  • Logistical challenges involved in transporting goods abroad

Things to consider

Before you enter any new market, it’s crucial to take some time to confirm whether you can afford the move. Can you afford the costs of exporting, working with intermediaries, tax, and all the other expenses involved? And what proportion of the market can you realistically expect to be able to serve? 

You must also consider if the product or service will work in your intended market. Market research (both online and offline) plays an important role here — ensuring demand for your product justifies the export cost.

Risks of entering new markets

There are also numerous risks involved in entering a new market, including:

  • Country risks, like the possibility of political unrest, sudden changes, or financial issues that could impact your business.
  • Foreign exchange, such as the possibility of currency exchange rates changing, could seriously affect your bottom line.
  • Cultural risk, which essentially means the possibility of your new business venture running into challenges due to significant differences in culture and customs.
  • Weather unpredictability. Are you moving into a market where natural disasters and weather conditions could cause damage to your facilities and cost money?

Once you have carefully researched your new market and weighed the potential risks, you may decide it’s worth entering. If so, there are several different strategies you can employ, each with its pros and cons.

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Different market entry strategies

Direct exporting

Direct exporting is where you ship your products to the new market directly. You’ll have to handle all aspects of the process independently, from transport to payments to operations in the new market.

This method requires more resources and time compared to working with an intermediary. You’ll need to create an exporting infrastructure, train employees, and make and receive international payments, among many other challenging tasks.

On the plus side, this approach maximizes your profits as you don’t need to pay any third parties. You’ll also have complete control over your sales and marketing processes.

Indirect exporting

Indirectly exporting involves working with an intermediary. It has some advantages, such as:

  • Much lower risk. An experienced third party will take care of the exportation process, which minimizes the risk of failure.
  • You can focus on your own business and domestic markets without being occupied by your new ones.
  • Fewer resources are required on your part.

On the other hand

  • Profits are lower since you have to pay your intermediary.
  • You’ll be disconnected from your customer base, so you’ll miss out on important insights and lessons.
  • You’ll lose complete control over sales and marketing abroad.

There are several different options when it comes to indirect exporting. Here are some of the most common ones.

Indirect exporting with buying agents

Buying agents are representatives of foreign companies that want to buy your products. You’ll work through them when selling your products to your new market.

They’re usually paid by commission and will try to negotiate the lowest possible price. Sometimes, buying agents are government agencies.

Indirect exporting using distributors

You can sell your product directly to distributors or wholesalers, who will then distribute the product to retailers.

Indirect exporting through the management and trading companies

Export Management Companies (EMCs) exist to take care of all your export and sales processes in your new market.

It’s worth taking some time to research and find the correct EMC, as most specialize in a particular market and region. They’ll help you identify markets, find customers, handle all shipping and logistics, and more.

Indirect exporting through piggybacking

Piggybacking is where you allow another non-competing company to sell your product. This can work exceptionally well if the partner company already has a customer base and distribution infrastructure in your target market.

You’ll get immediate access to your new market but for a fee.

Producing products in the target market

Another option is to manufacture your products within the target market. This saves you the cost of transport and the many logistical challenges involved in exporting your product abroad.

However, you’ll also need to consider the many challenges in manufacturing your product abroad, legal issues, costs, possible risks, and more. Depending on your situation, this could be a good option.

(For more information on the most effective strategies for entering a new market, check out our top four marketing strategies article).

Franchising / Licensing

While franchising is often associated with fast food or quick-serve restaurants, it can successfully aid expansion in many different categories. 

Franchising is where a semi-independent business owner (the franchisee) pays fees and royalties to the franchisor to use a company’s trademark and sell its products or services.

While franchising and licensing are both business agreements where certain aspects of the business are shared in exchange for a fee, a licensing agreement is typically more limited.

Entering a new market can be extremely rewarding and allow your business to move to the next level and achieve new growth. It’s essential to research all the options and ensure the export strategy you deploy is the safest and most effective for you. You’ll also need to thoroughly research the market to understand its potential and position your product for success, something we cover in our Ultimate Guide To Market Entry.

Kadence can help you do that. We have extensive experience assisting businesses by conducting game-changing research to create effective strategies for market entry. To find out more, learn about our market entry services or get in touch.

Market entry is the process of entering a new market, whether at home or abroad. There’s a lot to consider when taking this step, and it’s certainly not a simple process. In fact, for every successful market entry, about 4 will fail.

A new market doesn’t necessarily mean a new geographical area. It could mean selling your product or service in a new language or targeting an entirely new demographic of people. If you do choose to move into a new part of the world — especially if it’s abroad — this comes with its own unique set of challenges.

In this article, we’ll dive into a market entry and some of the challenges involved. We’ll also cover some steps you should take to maximize your chances of success in your new market.

Why enter a new market?

There are lots of good reasons why you should consider expanding beyond your current market. Some of the main ones are:

  • You want to gain more customers, grow your company, and increase your revenue. This is the most obvious reason — new markets represent untapped opportunities for growth and to make more money.
  • You’ve hit a ceiling in your current market. Perhaps you’re struggling to grow more where you currently are, which is an impetus to seek out new pastures.
  • There may be a legal requirement to offer your product in new markets. For example, you might be required to sell your product in different languages.
  • To keep up with competitors. If your competitors are expanding into new markets, you risk being left behind if you don’t do the same.

Domestic vs foreign market entry

Domestic markets will likely be quite similar to your existing markets, whereas international markets present some new challenges to overcome, such as differing cultures, laws, and languages.

However, foreign markets can also bring great benefits and the opportunity to become a truly global brand. If you decide you are ready to take the plunge and expand overseas, this will come with a whole host of brand new challenges.

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How to excel at market entry

Research the market

What is the size of the market? What is its growth rate? Where is the market heading and what are the key trends to watch? These questions can help organisations understand the potential return involved in entering a new market and are typically answered by a combination of desk research, interviews with industry experts and primary research. 

Research your customers and what they want

This is important at any stage of business, but it’s especially crucial when entering a brand new market. The more different your new market is from your current one, the more important this step is.

How do you get to know your customers?

  • Focus groups
  • Online surveys (and other quantitative research methods)
  • In depth interviews (IDIs)
  • Telephone depth interviews (TDIs)
  • Online communities (and other online qualitative research methods)
  • Ask your sales team for their experiences of customers’ opinions
  • Spend time in that market. There’s a lot you can learn – from better understanding consumer behaviour to getting a grip on the competitive landscape

In your research, you’ll need to consider a few key questions, such as:

  • Will your product work in the target market? What works well in your current market might not take off at all somewhere else. Is there any real demand for what you’re offering, and does it justify the cost of entry?
  • Will you be dealing with different demographics of people? Will they have different pain points, goals, and budgets? How will you address these differences?
  • Will you need to adjust your marketing strategy or move to new channels? For example, if you’re trying to move to an older market, social media marketing might not be the best approach to take.

Research the competition

Who are your competitors in your new market and what are they doing? These will likely be different from the competitors in your original market, but this may not always be the case.

Entering a new market, you’ll immediately be at a disadvantage to established companies. You’ll need to overcome customers’ long-term brand loyalty and familiarity with other products, and you’ll be competing with brands that already know the landscape well.

You’ll need to work hard to beat your competitors while also fitting into the new market. As such, it’s worth spending time and resources so you can find out as much as possible about your competitors and learn from them. One advantage of being a new entrant is that you can avoid the mistakes other players have made in the past, helping you to optimise your strategy and get ahead.

Understand the culture

When moving overseas to a new market, the cultural differences can be vast. If you want to succeed, you’ll need to make sure your business is on the same cultural wavelength as your new market.

This means adapting to the culture and customs. The best way to do this is by working with people on the ground – or indeed by spending time there and getting a feel for a new place. We have offices across Asia, the US and Europe, so when we work with clients on market entry projects, we’ve already got a deep understanding of the culture of the market they want to target, which can be a huge advantage. 

Understand the local laws and regulations

When moving into a new market, the last thing you want to do is run afoul of the local laws. For example, the EU’s GDPR regulation, built to protect the data privacy of EU citizens, applies strict rules for businesses. Failing to comply can result in a hefty fine.

It’s best to work with a local lawyer who can advise you about all the regulations you’ll need to be aware of and help you navigate this new legal landscape.

Have a clear future plan

When you enter a new market, it’s important to have a clear idea about where you’re going. How are you going to grow and scale? 65% of startups fail because of premature scaling — how will you make sure you grow at the right pace?

Take some time to put together a clear roadmap and market entry strategy that will ensure you develop and grow in your new market in exactly the right way.

Entering a new market is always fraught with challenges. It’s best to work with a team of experts who can help you formulate a strategy that works — guiding you through the complex and demanding process of making a move.


At Kadence, that’s our job. We’ve worked with countless companies, helping them lay the groundwork for a successful move into a new market. To find out how we can do the same for you, read more about market entry in our comprehensive guide, explore our market entry services or just get in touch today.