Entering a new market is an exciting and challenging journey for any company. The United Kingdom, with its diverse and well-developed economy, is an attractive market for many businesses. However, market entry in the UK can be complex and challenging, with many obstacles to overcome.

This article provides a roadmap for companies considering market entry in the UK. It will help companies overcome the challenges of entering a new market and take advantage of the opportunities that the UK has to offer.

“Bringing a new product to the UK market requires a deep understanding of local consumer needs and preferences, as well as a commitment to providing high-quality customer service.” – Sir Martin Sorrell, founder of WPP, the world’s largest advertising and marketing company.

We will cover the key steps in the market entry process, from conducting market research to launching a product or service in the UK. We will discuss the importance of market research, the regulatory environment, target market and segmentation, competition analysis, marketing and sales strategy, channel and distribution strategy, financing and funding, and launch plan.

Whether you are a start-up or an established business, this article will provide the information and guidance you need to enter the UK market successfully. The goal is to equip readers with the tools and knowledge to make informed decisions and achieve their market entry goals.

By the end of this article, you will have a better understanding of the challenges and opportunities of market entry in the UK and a clear plan for navigating the process from research to launch.

Market Entry Market Research 

Market research is crucial in market entry, providing valuable information about the target market, competition, and consumer trends. With proper market research, companies can avoid making costly mistakes, such as entering an unprofitable market or failing to differentiate from the competition.

There are two main market research types: secondary and primary. 

Primary research involves collecting data directly from potential customers and stakeholders. This type of research can be more time-consuming and expensive, but it provides valuable insights into the target market, competition, and consumer trends. Some standard primary research methods include surveys, focus groups, and interviews. 

Secondary research involves gathering data from industry reports, government statistics, and market reports. This type of research is relatively low-cost and quick to complete, making it a good starting point for market research.

Gathering data on the target market, including demographic, psychographic, and behavioral data, is important when conducting market research. This information can be used to segment the target market and develop a marketing strategy that will resonate with the target audience. 

Brands should also conduct a competition analysis to understand the strengths and weaknesses of competitors, including their market position, marketing strategies, and target segments.

To gather data on consumer trends, companies should pay attention to industry reports and consumer surveys and follow news and social media to stay up-to-date on the latest trends and preferences.

UK Regulatory Environment

The UK is generally considered a friendly and attractive market for new brands seeking to enter. It is known for having a stable and well-established legal system, a large and affluent consumer market, and a well-developed infrastructure for doing business. The UK is also part of the EU, which provides access to a market of over 500 million consumers.

However, like any market, the UK has unique challenges and complexities. For example, the UK has a relatively high level of regulation, particularly in data protection, health and safety, and environmental conservation. This can create additional compliance and administrative costs for companies.

When compared to other countries, the UK is a favorable market for new brands, products, and services, particularly when compared to emerging markets, which may have more political, economic, or regulatory risks. However, it is vital for companies to consider their specific needs and objectives carefully and to conduct a thorough market analysis before deciding to enter the UK market.

The legal and regulatory environment for doing business in the UK is complex and requires careful consideration by companies seeking to enter the market. 

Brands need to understand the legal and regulatory framework for doing business in the UK and seek professional advice as necessary. This will help ensure that your company fully complies with all relevant laws and regulations and can operate effectively and efficiently in the UK market. 

The following are some of the key aspects of the regulatory environment that companies need to be aware of:

  • Visas: If you or your employees are from outside the European Union (EU), you may need to obtain a visa to work and conduct business in the UK. There are several types of visas available, including work visas, business visas, and investor visas, and each has its requirements and restrictions.
  • Setting up a business: To set up a business in the UK, you will need to choose the type of business structure you want to use, such as a sole trader, partnership, limited liability partnership, or limited company. You will also need to register your business with Companies House, the UK’s official register of companies.
  • Registering for taxes: Once you have set up your business, you must register for taxes with HM Revenue & Customs (HMRC). This includes registering for corporation tax, value-added tax (VAT), and paying applicable taxes and national insurance contributions.
  • Relevant laws and regulations: Organizations must be aware of applicable laws and regulations to their specific business sector, including health and safety regulations, data protection laws, and environmental regulations. For example, companies selling products in the UK must comply with the Consumer Contracts Regulations, which set out the rights of consumers when buying goods or services online.
  • Policies: Brands must also be aware of relevant policies impacting their business, such as the UK’s Brexit agreement and all applicable trade agreements with other countries. Brands must also be mindful of any policies related to Brexit, such as customs procedures and tariffs.
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Import/Export Regulations and Tariffs

Import and export regulations and tariffs play a crucial role in the success of a market entry in the UK, and companies should carefully research and understand these regulations before entering the market. 

One crucial aspect to consider is the United Kingdom’s membership in the European Union, which affects trade between the UK and other EU countries. With the UK’s departure from the EU in 2021, businesses must navigate new trade agreements and regulations when importing or exporting goods between the UK and the EU.

Additionally, companies should be aware of any taxes or duties that may apply to their products or services and understand the process for obtaining any necessary licenses or permits. This can include value-added tax (VAT), customs duties, and excise taxes.

We recommend that companies seek advice from legal and tax experts to fully comply with all UK import/export regulations and tariffs. This can help minimize the risk of delays or fines and provide a smoother market entry process.

UK Target Market and Segmentation

Identifying and segmenting the target market is critical to a successful market entry strategy in the UK. The following are some main steps for identifying and segmenting the target market in the UK:

  • Demographic data: Collect data on the age, gender, income, education level, and other demographic characteristics of the target market in the UK. This information can be found from secondary sources, such as government statistics, or through primary research methods like surveys or focus groups.
  • Psychographic data: Gather data on the values, beliefs, lifestyle, and personality characteristics of the target market. This information can be obtained through focus groups, interviews, or other qualitative research methods.
  • Behavioral data: Collect data on the target market’s purchasing habits, product usage, and decision-making process. This information can be garnered through surveys, customer interviews, or other research methods.

Once you have collected this information, you can segment the target market into smaller, more defined segments with similar characteristics. This allows you to develop a more focused and effective marketing strategy that will resonate with the target market.

For example, let’s assume your target market is predominately young and tech-savvy consumers. In that case, you might focus your marketing efforts on digital channels such as social media, influencer marketing, and e-commerce platforms. Conversely, if your target market is more mature and traditional, you might focus your marketing efforts on more traditional channels such as print advertising, direct mail, and in-store promotions.

Localization: Understanding the Local Culture, Traditions, and Values

The United Kingdom has a rich and diverse culture, with a unique set of traditions and values deeply rooted in its history. By taking the time to understand and appreciate the UK’s local culture, traditions, and values, brands can increase their chances of success in the market.

“The UK is one of the world’s largest and most developed consumer markets, offering a wealth of opportunities for brands looking to reach new audiences.” – Richard Branson, founder of the Virgin Group.

Localization is adapting products and services to meet the specific needs and preferences of the local market. This includes everything from product design and packaging to marketing and customer service. Brands that take the time to localize their offerings are more likely to resonate with the target audience and build a strong brand image in the market.

There are several factors that brands should consider when localizing their products and services for the UK market, including:

  • Language: English is the official language of the UK, but there are regional variations and dialects that brands should be aware of. Companies should ensure that their marketing materials, product labels, and customer service are written in clear, concise English that is easy to understand.
  • Measurements and Units: The UK uses a different system of measurements and units compared to other countries. Brands should ensure that their products and packaging are labeled in the appropriate units to avoid customer confusion.
  • Cultural and Social norms: Brands should familiarize themselves with the cultural and social norms of the UK, including holidays, traditions, and customs. This will help them to avoid offending customers and create a positive brand image in the market.
  • Consumer preferences: Brands should research the consumer preferences of the UK market to ensure that their products and services meet the needs and wants of their target audience. This includes everything from product features and design to pricing and marketing.

Competition Analysis

UK consumers generally have a positive attitude towards new and foreign brands entering their market. They are known for being open-minded and curious and are often willing to try new products and services from different countries.

However, it’s important to note that new and foreign brands need to be well-prepared and understand the unique characteristics of the UK market. They should be able to differentiate themselves from local competitors and offer a unique value proposition to UK consumers.

“The UK is a great place to do business, with a highly skilled workforce, low levels of corruption, and a supportive legal system that makes it easier to protect intellectual property.” – Bill Gates, co-founder of Microsoft.

Conducting a competition analysis is essential in understanding the UK’s competitive landscape and developing a successful market entry strategy. The following are some tips for conducting a competition analysis:

  1. Identify main competitors: Start by identifying the key competitors in the UK market. This can be done through online research, industry reports, and other secondary sources.
  2. Analyze market position: Assess the market position of each competitor, including their market share, brand awareness, and customer loyalty. This information can help you understand their strengths, weaknesses, and market position.
  3. Evaluate marketing strategies: Analyze the marketing strategies of each competitor, including their advertising, promotions, and distribution channels. This information can help you understand how they are reaching their target market and what makes them unique.
  4. Assess target segments: Identify the target segments of each competitor and understand how they are positioned in the market. This information can help you understand how each competitor differentiates themselves in the market and what opportunities may exist for your brand.
  5. Evaluate strengths and weaknesses: Evaluate the strengths and weaknesses of each competitor, including their product offerings, pricing strategy, and customer service. This information helps you identify areas where your brand can differentiate itself.

Marketing and Sales Strategy

The following are some key steps to consider when creating a marketing and sales strategy:

  1. Create a Unique Value Proposition: Develop a unique value proposition that differentiates your brand from the competition. Consider the needs and desires of the target market and what makes your brand unique.
  2. Conduct a SWOT analysis: Conduct a SWOT analysis to identify the strengths, weaknesses, opportunities, and threats of your brand. This information can help you develop a marketing and sales strategy that leverages your strengths and minimizes your weaknesses.
  3. Develop a marketing mix: Develop a marketing mix that includes product, price, promotion, and place. Consider the target market, competition, and consumer trends when developing each element of the marketing mix.
  4. Choose the right channels: Choose the right channels to reach and engage with the target market. This may include online channels such as social media, email marketing, and display advertising, and offline channels such as events and trade shows.
  5. Measure and adjust: Continuously measure and adjust the marketing and sales strategy to ensure that it is effective and achieves desired results. This may include adjusting the marketing mix, refining the target market, or adjusting the sales strategy.

Brand Awareness: Establishing Your Reputation in the UK Market

Brand awareness is one of the most crucial factors in establishing a successful market entry in the UK. A strong brand presence can help companies gain credibility and attract customers, making it essential for companies to invest in targeted marketing and PR efforts. There are several key strategies for building brand awareness in the UK, including:

  1. Develop a Unique Value Proposition: Companies must differentiate themselves from the competition by creating a unique value proposition that sets them apart. This could be innovative products, exceptional customer service, or a commitment to sustainability, for example.
  2. Utilize Digital Marketing: The UK is a highly digitized market, and companies must utilize digital channels to reach their target audience. This includes social media, email marketing, and search engine optimization (SEO), among others.
  3. Leverage Influencer Marketing: Influencer marketing is a powerful tool for building brand awareness in the UK. Companies can work with influencers who align with their brand values and have a large following on social media platforms to reach their target audience.
  4. Attend Trade Shows and Events: Attending trade shows and events can help companies meet potential customers, showcase their products and services, and build their brand reputation in the UK.
  5. Invest in PR: Investing in PR can help companies establish their brand in the UK by securing media coverage and building relationships with key stakeholders.

Building brand awareness in the UK requires effort and resources, but the payoff can be significant. Companies that invest in targeted marketing and PR efforts are more likely to build a strong brand presence, attract customers, and achieve long-term success in the UK market.

Partnerships and Alliances

It is essential for companies entering the UK market to have a clear understanding of the local business landscape and the opportunities available for forming partnerships and alliances with local businesses. 

These relationships can offer numerous benefits, including access to local knowledge and established networks and distribution channels that can help companies quickly establish themselves in the market.

When identifying potential partners, companies should consider businesses with complementary products or services and a similar target market. Networking with local organizations and industry groups can also be a great way to identify potential partners and participate in trade shows and events specific to the industry.

Brands should also consider the type of partnership or alliance most beneficial for their business. For example, a joint venture can provide shared resources and risk-sharing, while a strategic alliance can offer opportunities for collaboration and increased market share. On the other hand, a distribution agreement can provide access to established distribution channels and speedier entry into the UK market.

Channel and Distribution Strategy

A well-designed channel and distribution strategy is critical for successful market entry in the UK. By identifying target market needs, evaluating distribution options, choosing the right channel, developing partnerships, and continuously monitoring and adjusting the strategy, brands can ensure that their products are effectively and efficiently distributed to the target market. 

Customer Service in the UK

The UK is known for having high standards when it comes to customer service, and customers expect a quick response to their inquiries and a high level of support.

To meet these expectations, companies should invest in the right infrastructure to support their customers, such as a well-staffed call center or online chat service. Brands should also consider offering a variety of channels for customers to reach out, including email, phone, and social media.

In addition to investing in customer service infrastructure, companies should also focus on providing high-quality service. This means training customer service representatives to be knowledgeable, friendly, and effective in resolving customer issues. Brands should also have clear policies and procedures to handle customer complaints and ensure customer satisfaction.

Finally, brands should strive to create a positive customer experience that sets them apart from the competition. This may include offering a loyalty program, creating a helpful and user-friendly website, or providing value-added services to enhance the customer experience.

Financing and Funding

Entering a new market, such as the UK, often requires significant financial resources. Careful planning and execution are critical for securing the financing and funding necessary to support a market entry into the UK. It is essential to consider all the options for financing and funding a market entry to ensure that the venture has the resources it needs to be successful. The following are some key points to consider:

  • Determine funding needs: Establish a clear understanding of the funding required to support the market entry. This should include an estimate of the costs associated with product development, marketing, distribution, and other essential activities.
  • Explore financing options: Consider all available financing options, including loans, grants, crowdfunding, and others. Evaluate the advantages and disadvantages of each option in terms of interest rates, repayment terms, and other key terms.
  • Secure funding: Secure the necessary funding by applying for loans, grants, or crowdfunding. Be prepared to provide a detailed business plan and financial projections to support the application.
  • Plan for cash flow management: Establish a cash flow management plan to ensure the business has the resources it needs to meet its obligations as they come due. This may include forecasting cash flows, establishing lines of credit, and other measures.

Market Monitoring: An Ongoing Process for Successful Market Entry in the UK

Ongoing market monitoring and analysis are critical components of a successful market entry in the UK. As the market and consumer trends evolve, companies must continually gather data to stay informed and adapt their strategies. To succeed, companies need to understand the market landscape and be able to respond quickly to changes.

Market monitoring enables companies to stay informed about market trends, consumer behavior, and competitive activity. This information can help brands make informed decisions about product development, marketing, and distribution strategies. Companies can also use market monitoring to identify new opportunities and areas for growth in the UK market.

There are several ways companies can gather market intelligence and monitor the UK market, including:

  • Conducting market research and surveys to gather data on consumer preferences and behaviors.
  • Monitoring sales trends and customer feedback to understand customer needs and preferences.
  • Keeping a close eye on the competition and their activities, including new product launches, marketing campaigns, and distribution strategies.
  • Utilizing market intelligence platforms and reports to access up-to-date data on market trends and consumer behavior.
  • Engaging with industry experts and local organizations to stay informed about market developments and trends.

Brands should invest the time and resources to continually gather market intelligence and monitor their performance in the UK market to ensure continued success.

How market research can help you with your UK market entry goals 

Market research is essential in any market entry strategy, and the UK is no exception. Brands looking to enter the UK market should take the time to understand the country’s target audience and consumer behavior. This involves market research to gather insights into consumer preferences, behaviors, and buying patterns. This information can then be used to tailor products and services to meet the needs of UK consumers, increase brand awareness, and improve marketing efforts.

It is also essential for companies to assess the competition and market saturation in the UK. This includes analyzing the market size, growth potential, and key players in the industry. This information can help companies identify trends and opportunities in the market and determine the best strategies for differentiating their products and services from those of their competitors.

In addition to market research, companies should conduct a SWOT analysis to evaluate their strengths, weaknesses, opportunities, and threats in entering the UK market. This involves considering the internal and external factors that may impact their ability to succeed, including their resources, capabilities, market position, and competition. By conducting a thorough SWOT analysis, companies can identify areas for improvement and develop a more effective market entry strategy.

Conclusion and Key Takeaways

Market entry into the UK can present significant opportunities for companies looking to expand their reach. However, it is essential to approach this process with careful planning and preparation to ensure success. From conducting thorough market research to understanding the legal and regulatory environment, companies need to consider a range of factors to ensure a successful entry.

“The UK is known for its innovative and entrepreneurial spirit, and companies that are able to tap into this energy and creativity can achieve great success in the market.” – Lord Alan Sugar, British business magnate, investor, and politician.

The key takeaways from this blog include the importance of:

  1. Conducting thorough market research to understand the target market, consumer trends, and competition.
  2. Familiarizing yourself with the legal and regulatory environment, including obtaining visas, setting up a business, and registering for taxes.
  3. Developing a marketing and sales strategy that resonates with the target market and differentiates from the competition.
  4. Securing the necessary financing and funding to support market entry.

We hope this comprehensive guide has provided valuable information and insights to help companies considering market entry in the UK. However, this is just the beginning. Brands should also seek additional resources and support to ensure a successful entry, such as consulting with market experts, consultants, or lawyers.

We wish you the best of luck in your market entry journey and encourage you to be proactive, strategic, and well-prepared as you navigate the opportunities and challenges of entering the UK market. Kadence International has 30+ years of experience in market research and is more than happy to discuss your UK market research needs.

When the US home improvement retailer Home Depot attempted to enter the Japanese market in the 1990s, it failed to gain traction due to intense competition from local retailers and cultural differences. And when UK supermarket giant Tesco attempted to enter the Japanese market in 2003, it failed to gain a foothold and eventually withdrew from the market in 2011.

These examples demonstrate that foreign brands must understand the local market and consumer preferences to be successful in Japan. Brands must also be willing to make the necessary adaptations and investments to succeed in this highly competitive market.

Japanese consumers have unique cultural and societal influences that differentiate them from consumers in Western countries like the United States and the United Kingdom. 

Brands looking to succeed in the Japanese market should consider these differences when developing their marketing and product strategies. Here are some key differences:

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Brand loyalty: Japanese consumers are often highly loyal to specific brands and may be more likely to purchase products from established brands they trust.

Attention to detail: Japanese consumers are known for their attention to detail and appreciate well-designed and well-crafted products. They also place a premium on functionality and practicality.

Quality expectations: Japanese consumers have high expectations for quality and place a premium on well-made and durable products.

Technical sophistication: Japanese consumers are known for their technical sophistication and are often early adopters of new technology and products.

Environmentalism: Japanese consumers are increasingly environmentally conscious and may be more likely to purchase environmentally friendly products.

Retail culture: Retail culture in Japan is different from that in Western countries, with a strong emphasis on in-store experiences and customer service.

Fashion and beauty: Japanese consumers place a strong emphasis on fashion and beauty, and they are known for their unique and eclectic sense of style.

Below are eight important considerations brands should research and understand before launching their product or service into the Japanese market.

1. Cultural sensitivity: Understanding Japanese cultural norms and customs is crucial for a successful product launch.

Cultural sensitivity is an important consideration for brands looking to bring a product into Japan, as cultural norms and values play a significant role in shaping consumer behavior. 

Brands should take the time to understand the local culture and customs and tailor their offerings accordingly.

Here are some key points to consider when it comes to cultural sensitivity in the Japanese market:

  • Respect for tradition: Japan has a rich cultural heritage and tradition, and brands should respect and be mindful of these cultural values.
  • Attention to detail: Japanese consumers have high expectations for detail and quality in products, packaging, and marketing materials. Brands should ensure that their offerings meet these expectations.
  • Honorific language: In Japan, it is important to use appropriate honorific language when communicating with consumers, especially in advertising and marketing materials.
  • Social customs: Understanding and respecting social customs, such as gift-giving, is important in building relationships with customers.
  • Sensitivity to local customs: Brands should be sensitive to local customs, such as the preference for modesty in dress and advertising, and avoid causing offense.

2. Local regulations: Familiarizing with the local laws and regulations regarding product labeling, packaging, and marketing materials.

Local regulations are important for brands looking to bring a product into Japan as they impact product labeling, packaging, and marketing materials. 

Brands must comply with local regulations when bringing a product into Japan. This helps avoid legal and financial issues and ensures that the product is well received by the market.

Here are some key points to consider when it comes to local regulations in the Japanese market:

  • Product labeling: Labeling requirements in Japan are stringent, and brands should ensure that their products meet all the required regulations, including health and safety standards, labeling information, and warnings.
  • Packaging regulations: Packaging regulations in Japan are also strict, and brands should ensure that their packaging is compliant with local standards and regulations.
  • Marketing materials: Marketing materials such as advertisements and promotional materials should also comply with local regulations, including guidelines on product claims, testimonials, and endorsements.
  • Import restrictions: Brands should also be aware of import restrictions on certain products, including food, pharmaceuticals, and chemicals.
  • Environmental regulations: Japan has strict environmental regulations, and brands should ensure that their products and manufacturing processes meet these standards.

3. Distribution channels: Identifying and partnering with the right distribution channels in Japan is crucial.

Identifying and partnering with the right distribution channels is crucial for brands looking to bring a product into Japan as it affects the reach and success of the product in the market. 

Choosing the proper distribution channels is critical to the success of a product in the Japanese market. Brands should carefully consider their options and build strong relationships with their distribution partners to ensure the product reaches the right customers.

Here are some key points to consider when it comes to distribution channels in the Japanese market:

  • Retail landscape: Japan has a complex retail landscape, with a mix of large chain stores, specialty stores, and online retailers. Brands should understand the different channels and choose the most suitable ones for their product.
  • Wholesale vs. Direct Sales: Brands should consider selling their products directly to consumers or through a wholesale distribution channel. Direct sales may offer more control over pricing and product positioning, but wholesale distribution can provide a wider reach and lower costs.
  • Importance of relationships: In Japan, relationships play a crucial role in business, and brands should take the time to build strong relationships with distribution partners.
  • E-commerce: Online retail is becoming increasingly important in Japan, and brands should consider an e-commerce strategy as part of their distribution plan.

4. Consumer behavior: Understanding Japanese consumers’ unique buying habits and preferences can help a brand tailor its offerings accordingly.

Understanding consumer behavior is crucial for brands looking to bring a product into Japan, as it can impact product positioning, marketing, and sales. 

Brands should research consumer preferences, trends, and buying habits to ensure that their product offerings resonate with the local market.

Here are some key points to consider when it comes to consumer behavior in the Japanese market:

  • Brand loyalty: Japanese consumers tend to be highly loyal to brands and often make purchasing decisions based on brand reputation and quality.
  • Quality over price: Japanese consumers place a high value on quality and are often willing to pay a premium for products that meet their expectations.
  • Attention to detail: Japanese consumers are known for their attention to detail, and they appreciate well-designed and well-made products.
  • Health and wellness: Health and wellness are important concerns for Japanese consumers, and brands should consider these needs when developing their products.
  • Trends: Keep up-to-date with the latest consumer trends in Japan, as they can change quickly and impact consumer preferences.
  • Advertising: Advertising and marketing strategies should be tailored to meet the needs and preferences of Japanese consumers.

5. Language: Communication in the local language is key, and translated materials should be culturally appropriate and high-quality.

Language is an important consideration for brands looking to bring a product into Japan as it impacts product labeling, packaging, marketing, and customer service. 

Brands should ensure that they communicate effectively with customers, use the appropriate language, and adapt their products to meet local preferences. This can build trust and credibility with Japanese consumers and ensure a successful product launch.

Here are some key points to consider when it comes to language in the Japanese market:

  • Official language: Japanese is the official language of Japan and is widely spoken by the population. Brands should ensure that their product labeling, packaging, and marketing materials are translated accurately into Japanese.
  • Localisation: Brands should also consider localisation, which means adapting the product to meet the cultural and linguistic norms of the local market. This can include changing product names, packaging design, and marketing materials to reflect local preferences.
  • Customer service: Brands should ensure that they have a customer service team that can communicate effectively with Japanese customers in their language.
  • Language skills: Brands should invest in language training for employees working in the Japanese market to ensure effective communication and a smooth transition.

6. Product adaptions: Packaging size, product specifications, and ingredients may need to be adapted for the Japanese market.

Product adaptation is the process of modifying a product to meet the specific needs and preferences of a local market and is an important consideration for brands looking to bring a product into Japan. 

Brands should take the time to understand local consumer preferences and requirements and make the necessary adaptations to ensure that their products meet local needs and regulations. This can build trust and credibility with Japanese consumers and increase their chances of success in the market.

Here are some key points to consider when it comes to product adaptation in the Japanese market:

  • Cultural differences: Brands should be mindful of cultural differences in Japan and how they may impact product design and features. For example, products may need to be modified to fit smaller living spaces or meet local safety regulations.
  • Consumer preferences: Brands should conduct market research to understand local consumer preferences and make necessary product adaptions to meet their needs. For example, local consumers may prefer different colors, sizes, or materials.
  • Technical requirements: Brands should ensure that their products meet the technical requirements in Japan, including certifications and regulatory approvals.
  • Local suppliers: Brands may need to source local suppliers for raw materials or components to ensure that the product is manufactured in compliance with local regulations.
  • After-sales support: Brands should also consider after-sales support when making product adaptations, as local consumers may have different expectations for customer service and repair services.

7. Quality expectations: Japanese consumers have high expectations for product quality, so brands need to ensure that their offerings meet these expectations.

Quality expectations are critical for brands looking to bring a product into Japan, as they can significantly impact product success. 

Brands should ensure that their products meet Japanese consumers’ high standards, focus on building a positive brand image, and provide excellent after-sales support to meet customer needs. This can help to build trust and credibility with Japanese consumers and increase their chances of success in the market.

Here are some key points to consider when it comes to quality expectations in the Japanese market:

  • High standards: Japanese consumers have a high expectation for quality, and they place a premium on products that are well-made and durable. Brands should ensure that their products meet these quality standards to succeed in the market.
  • Attention to detail: Japanese consumers are known for their attention to detail, and they appreciate well-designed and well-crafted products. Brands should focus on ensuring that their products are of the highest quality, emphasizing attention to detail.
  • Brand reputation: Quality expectations are closely tied to brand reputation in Japan, and consumers will often make purchasing decisions based on a brand’s reputation for quality. Brands should focus on building a positive brand image to increase their chances of success in the market.
  • After-sales support: Quality expectations also extend to after-sales support, and Japanese consumers expect that their products will be repaired or replaced if they fail. Brands should have a robust after-sales support system to meet these expectations.

8. Marketing strategies: Developing a marketing strategy that resonates with Japanese consumers is important, including considering local social media and influencer marketing.

Marketing strategies are an important consideration for brands looking to bring a product into Japan, as they can significantly impact product success. 

Brands should take the time to understand local consumer behavior and cultural differences and tailor their marketing strategies accordingly. This can help to build brand awareness and reach the right target audience, increasing the chances of success in the market.

Here are some key points to consider when it comes to marketing strategies in the Japanese market:

  • Cultural differences: Brands should be mindful of cultural differences in Japan and tailor their marketing strategies accordingly. For example, marketing materials may need to be modified to reflect local preferences and cultural norms.
  • Consumer behavior: Brands should conduct market research to understand local consumer behavior, including purchasing habits and preferred marketing channels. This information can be used to inform the development of a targeted marketing strategy.
  • Local media: Brands should consider using local media, such as television, newspapers, and magazines, to reach their target audience in Japan.
  • Digital marketing: Digital marketing is becoming increasingly important in Japan, and brands should consider using digital channels, such as social media, email marketing, and search engine optimization (SEO), to reach their target audience.
  • Influencer marketing: Influencer marketing is also becoming popular in Japan, and brands may consider partnering with local influencers to reach their target audience.

Market research can help companies and their brands understand the unique business landscape in Japan. For more information on how to develop a successful market entry strategy for Japan, read our blog, How to Develop a Market Entry Strategy in Japan

If you are interested in Kadence’s market research capabilities in Japan, download our agency credentials document here or submit a Request for Proposal here.

It makes sense to open up new markets for a successful product or service. But how do you know whether it’s worth the investment? What makes for a potential buyer in your home territory might not apply in a new location where the total addressable market could be much smaller or many times the size. Enter the market researchers. We explain how to calculate market potential of a product or service.

Estimating sales can be a chore even when you have historical and well-honed market instincts to work with. But in a new market this is even harder. There’s no historical data to review and it’s challenging to estimate the kinds of expenses and risks that might crop up.

An inability to judge sales makes the decision of whether to enter a new market much harder. Without a decent estimate – of both sales and likely profits – it’s almost impossible to decide on how you might enter and what kind of investment to make there.

What’s the market really worth?

The starting point is to get a handle on the existing market for your brand or product in the new territory. A basic market analysis is a great starting point. Typically it breaks down into:

  • Market sizing (current and future)
  • Market trends
  • Market growth rate
  • Market profitability
  • Industry cost structure
  • Distribution channels
  • Key success factors

But within each category, there’s lots to research. A more superficial look at the data can be helpful for a ‘first cut’ look at which new markets you might want to enter. But a deeper dive into the numbers will be essential if you’re going to properly evaluate the strategy for what looks like a high-probability candidate.

That more sophisticated analysis could take the form of a total addressable market (TAM) analysis. This looks at both the TAM itself, as well as serviceable available market (SAM). This is the portion of TAM that your company’s products or services play inside; and serviceable obtainable market (SOM), the percentage of SAM which your might realistically reach.

Best guesses?

But getting to SOM for a brand new market isn’t a simple calculation. It’s not exactly easy in markets where you’re a known quantity and understand the competitive environment, either! For businesses in mature categories and with previous experience of being a new entrant to markets, it’s possible to make educated guesses. This can be refined with local research on factors that might shape consumer behavior.

In some industries that data might be possible to obtain – from industry associations, for example, or government agencies. In others – and particularly in product segments that a relatively underdeveloped in the market you plan to enter – sales figures might be harder to come by.

Then there’s the difficulty of calculating market share. You will know what it might cost in contracts, infrastructure and marketing to build share in existing markets. But the assumptions may be way off-base for a brand new market.

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Talk to people

At this point there are two avenues:

Research sales results that have been achieved by other companies like yours. They don’t even need to be in precisely the same line of business. The lessons of other companies looking to sell into the new markets can reveal both the optimum routes in, the barriers to adoption and the appetite for new brands.

That might even mean contacting other businesses to ask their experience of making the adaptation to the new market – as well as learning about potentially important busy and slow seasons, noteworthy business practices and quirks of the system that might not have a direct bearing on the size of the opportunity, but will allow you to adjust your assumptions.

Talking to local partners, however, is probably the best way of calibrating your expectations. Even if you plan to enter a market by establishing a local entity and investing in your own facilities and marketing, you’ll still be working with many different counterparties. This can span everything from local professional services firms such as lawyers and accountants, to warehousing, distribution or media buying agencies.

They ought to be able to offer anecdotal evidence at the very least; at best, they’ll have insights into the size of the market and chances of capturing that crucial market share. And if the route to market entry is contracting with a local distributor, licensees or franchisees, their sense of the opportunity could be invaluable.

But above all, rigorous quantitative and qualitative market research will reveal a great deal about attitudes and appetites for your brand or product. The more you can contextualize the hard data on existing spend and potential market growth with consumer insight, the more realistic your evaluation will be.

Focusing on behavior

One other way to address uncertainties about how a new market might embrace a product or service is to think not about that category, or even look at domestic rivals’ sales and strengths. It’s to create a strategy based on consumer behaviors.

If you can analyze why your brand, product or service is successful in its existing markets and break down the results into some key motivators or even behavioral traits of your consumers, it might be possible to assess where those traits are visible in a new market before you enter. In what situations is your product used? What type of people love it? What are those customers’ attitudes across different domains? What role does it play in their lives – and why?

That will require some pretty deep insight into the market you want to enter. Clearly it’s a more useful investment to make if there are other positive signals to encourage you in – fundamentals such as infrastructure, spending power or pre-existing local interest in your brand or product.

How good is your cost analysis?

Knowing your potential sales, market share and growth are all important. But the scale of the opportunity isn’t just sales – it’s profit. And even seasoned businesspeople can misstep when it comes to keeping costs under control in their market entry strategy. Here’s a brief list of costs that won’t affect domestic-only businesses:

  • Shipping costs – which can also fluctuate wildly, as we’re finding out during the COVID-19 pandemic. Consider, also, capacity. Shipping out of markets with a high balance of trade deficit (Europe, US, UK) to major exporters (China, for example) is much easier than going the other way.
  • Legal expenses – from registering a business in a new location, sorting out licensing, contracts, the right insurance cover… and complying with local regulations on everything from product labelling to anti-bribery laws.
  • Foreign taxes – and other local accounting quirks, which might be different depending on your headquarters domicile and the mode of entry into the market.
  • Translation services – for everything from contracts and technical specs, to instruction manuals and marketing.
  • Recruitment and HR – even a light-touch market entry will benefit from putting some employees into the new market to oversee set-up and manage local relationships.
  • Travel expenses – for the above, but also for ongoing check-ins with local teams or business partners.

What do you know about rivals?

Some lucky businesses will find an overseas market where there are few local rivals, legal and business structures that allow them to port across their defensive attributes from existing markets and a ready but as-yet-untapped consumer base. But those will be rare. So to properly understand the market potential, you’ll need competitor analysis. Our typical approach to this considers:

  • Who are your rivals in that market? Not just currently selling what you want to sell, but addressing your potential customers, too.
  • What is their range of products? How easily might they change?
  • How do they pitch their consumers? What messages are they using? Which channels?
  • What is their competitive advantage? What’s their cost base like? What could you replicate – and where can you out-compete them?
  • What’s their market share? How fragmented in the competition? What opportunities does that present either in terms of the industry cost-base or even acquiring smaller rivals?
  • What is their company structure? If they outsource (for supply or support) or license (to address the market), could those be vulnerabilities increasing your potential strength?

In summary

A lack of prior experience and knowledge can make it challenging for companies to assess the potential of new markets. We help lots of business overcome this – not just through the use of primary and secondary market research, but also by having people on the ground in many countries and regions to add specific local knowledge.

This creates a much more rounded view of the market potential – and the optimum ways to tap into it – than simply applying a cookie-cutter approach to market entry. The key steps:

  • Understand the demographic and economic drivers that underpin the total market for your products or services.
  • Think laterally about the broader factors – such as the types of consumer and cultural attitudes – that dictate market size.
  • Analyze existing market activity to deduce a TAM, SOM and SAM.
  • Conduct consumer research to evaluate your specific opportunity in the market.
  • Competitor intelligence will help you test assumptions about potential market share gains.
  • Rigorous local insights into costs and risks will reveal the profit potential – the ultimate rationale for market entry

Find out more about our market entry services, read our expert guide to market entry or get in touch with us to discuss a project with our team.

Indonesia is the largest economy in Southeast Asia and the third-largest democracy in the world, offering opportunities in almost every sector of the economy. With rising disposable incomes, the country’s 261 million people make it the fourth most populous country in the world. Indonesia is the seventh-largest economy by purchasing power, and a leader in ASEAN, with a growing middle class, showing an increased interest in products and services imported from abroad.

As the world’s largest Muslim-majority nation, Indonesia is culturally diverse. It has more ethnic populations, languages, and cultures than other countries. It has several ethnic groups, including Javanese, Sundanese, and others, with more than 700 recognized regional languages.

Indonesia has an important place in the world’s economy as the 24th largest goods trading partner. Goods exports totaled USD 7.4 billion, and goods imports totaled USD 20.2 billion.

The Indonesian government’s policy, abundant natural resources, and young labor force have shaped the country’s economic performance.

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Indonesia is the largest economy in Southeast Asia and the third-largest democracy in the world, offering opportunities in almost every sector of the economy. With rising disposable incomes, the country’s 261 million people make it the fourth most populous country in the world. Indonesia is the seventh-largest economy by purchasing power, and a leader in ASEAN, with a growing middle class, showing an increased interest in products and services imported from abroad. 

As the world’s third-largest Muslim-majority nation, Indonesia is culturally diverse. It has more ethnic populations, languages, and cultures than other countries. It has several ethnic groups, including Javanese, Sundanese, and others, with more than 700 recognized regional languages. 

Indonesia has an important place in the world’s economy as the 24th largest goods trading partner. Goods exports totaled USD 7.4 billion, and goods imports totaled USD 20.2 billion. 

The Indonesian government’s policy, abundant natural resources, and young labor force have shaped the country’s economic performance. 

The country has also been increasingly open to international trade openness over the past half-century.

For foreign companies looking at selling directly to the government and state-owned companies, it is critical to utilize the services of local agents or distributors. At times, companies are required to use their services by law. 

In 2021, the country’s President officially launched the Online Single Submission (OSS) System, a web-based platform for issuing business licenses to facilitate micro to large entrepreneurs. The goal was to adjust the business licensing process to the level of risk and improve the ease of doing business in Indonesia. 

The government said they would continue to cut regulations that potentially hamper business and investment licensing and called for transparency between government officials and entrepreneurs for obtaining business permits. They also put memorandums in place to increase investment and national revenue and ease the flow of investment into the country. 

For foreign companies entering the country, Indonesia is a lucrative market, and these companies need to understand Indonesian culture and local consumer preferences. 

Essential factors affecting purchase decisions in Indonesia are pricing, financing, technical skills, and after-sales service. Brands entering the market should invest in training their local staff for varying levels of seniority within the company. 

Market Opportunities in Indonesia

The Indonesian consumer has been ranked the most confident in the world, and it’s a young nation with nearly 43 percent of Indonesia’s 277 million citizens under 25 years old. 

Consumer-related market opportunities continue to lead expansion in the world’s fourth-most populated country, and growth in the retail, health, education, telecom, and financial services sectors has been booming.

Indonesia’s aviation market is the second-fastest growing in the world, and a competitive and expanding banking market offers significant opportunities for IT and banking equipment, software, and technology providers. There are opportunities for telecommunication infrastructure and aircraft replacement parts and services. Telecommunications equipment, services, and satellites remain excellent areas for products and services from western markets with a relative technological advantage.

Indonesia’s under-developed public infrastructure presents opportunities in aviation, rail, ports, and land transport, and public utilities infrastructure projects such as water supply, wastewater systems, and waste management establishments. Emerging opportunities include palm oil, biofuel processing, clean energy, energy efficiency, and technology to improve local production capacity, dams, and waste-to-energy projects. There are opportunities for U.S. defense manufacturers to sell a range of military aircraft, vehicles, communications systems, spare parts, and maintenance services.

Education and professional training, medical equipment, and high-quality U.S. agricultural commodities maintain their edge even with higher prices.

Challenges of doing business in Indonesia

Significant challenges revolve around labor relations, intellectual property protection, and transparent rules in setting and implementing standards and certification. The Government of Indonesia has introduced plans to reduce the bureaucratic red tape to facilitate investment.

Protecting intellectual property is a crucial concern for foreign brands in Indonesia. However, in a positive development, Indonesia established a new Intellectual Property Enforcement Task Force to improve IP enforcement coordination. 

Foreign companies entering Indonesia should be mindful of additional requirements for testing and certification imposed on a range of products. 

Another issue many exporters that target public tenders find is an opaque pricing environment and local content requirements. 

Manufacturers selling goods or services through e-commerce platforms with a significant presence in the country are assessed a 10 percent value-added tax on all transactions in Indonesia. A “significant presence” is determined based on gross sales or the number of customer transactions.

Significant challenges of doing business in Indonesia are:

  • Bureaucratic inefficiency
  • Delays in land acquisition for infrastructure projects
  • Weak enforcement of contracts
  • Delays in receiving refunds for advance corporate tax overpayments

The energy and mining sectors still face significant foreign investment barriers, and all sectors need more effective IP protection and enforcement.

Despite some of these challenges, Indonesia continues to attract substantial foreign investment. According to the 2020 IMF Coordinated Direct Investment Survey, the top foreign investment sources for the country came from Singapore, the United States, the Netherlands, Japan, and China.

Private consumption drives the largest economy in ASEAN, making Indonesia a favorable destination for a wide range of brands and industries. 

Want to take your brand to Indonesia? We are consistently recognized as one of the top market research agencies globally. To learn more, go to https://kadence.com/en-us/office/indonesia/ and download our agency credentials.

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 behaviors, 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 behavior, 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 labor market —its laws, guidelines, and policies. 

Vietnam provides a labor 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 aging 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 aging 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 aging, 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 aging 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 regionalize 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 familiarize 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, localize 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) Behaviors 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 behaviors, 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, behaviors, 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 favorable 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 want to grow, 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 financial 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 the opening of 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. 

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#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 center 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 lockdowns 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 labor force coming in from other countries. Many expats have also left the country due to stringent COVID-19 restrictions.”

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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 Singaporean consumers’ key considerations? 

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 a sense of prestige is 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. 

“Many 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 distribution networks from Singapore to Southeast and North Asia markets are 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, 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 aging 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 neighbor 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 urbanization 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 globalization 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 neighbors – 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 mythologized 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 program; 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 behaviors – 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 programs 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.

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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, organizations 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 behaviors 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 recognized’ 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 programs 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 organization 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.

How to launch a new FMCG product in the market successfully


Launching a new Fast-Moving Consumer Goods (FMCG) product in the market successfully requires careful planning and execution. Here are some key steps to ensure a successful launch:

  1. Market Research: Begin by conducting thorough market research to identify the target audience, understand their needs, and assess the competition. This will help you position your product effectively and differentiate it from existing offerings.
  2. Product Development: Develop a high-quality product that meets the demands of the target market. Focus on creating a unique value proposition, whether it’s a new feature, improved formula, or innovative packaging.
  3. Marketing Strategy: Craft a comprehensive marketing strategy that encompasses product positioning, pricing, distribution channels, and promotional activities. Define your brand’s identity and messaging to create a strong connection with consumers.
  4. Pre-Launch Buzz: Build anticipation for your product before the launch by creating buzz through teaser campaigns, social media engagement, influencer partnerships, and targeted advertising. Leverage the power of digital marketing to reach a wide audience.
  5. Strategic Partnerships: Collaborate with retailers, distributors, or e-commerce platforms to ensure widespread availability of your product. Secure prime shelf space or online visibility to enhance its visibility and accessibility.
  6. Launch Event: Organize a well-planned launch event to generate excitement and media coverage. Invite key stakeholders, influencers, and journalists to showcase your product and communicate its unique features and benefits.
  7. Sampling and Trials: Offer free samples or trial sizes to consumers to encourage them to experience your product firsthand. This can help generate positive word-of-mouth and build brand loyalty.
  8. Ongoing Marketing: Sustain the momentum post-launch by implementing a robust marketing campaign. Utilize various channels such as social media, advertising, public relations, and content marketing to engage with your target audience consistently.
  9. Continuous Improvement: Collect customer feedback, analyze market trends, and adapt your product and marketing strategies accordingly. Stay agile and responsive to changing consumer preferences to maintain a competitive edge.
  10. Monitor Performance: Track sales, market share, customer feedback, and brand perception to evaluate the success of your launch. Make data-driven decisions to optimize your future marketing efforts.

Launching a new FMCG product requires a well-rounded approach that incorporates thorough market research, effective marketing strategies, strategic partnerships, and continuous improvement. By following these steps, you can increase your chances of a successful market entry and build a strong foundation for your brand.

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 customer’s pain points, desires, 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 optimize 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.