4 Risks of Expanding Your Business Overseas
Needless to say, managing a business is tough. Singapore has a relatively small population which makes the market for businesses to work in, rather limited. In addition, there is stiff competition. More often than not, once a company does exceptionally well in something, others start to follow suit.
So how can a business stay differentiated and relevant?
Just like how the saying goes, don’t put all your eggs in one basket. As such, some companies choose to venture overseas. Venturing overseas help businesses diversify by reaching out to larger customer bases. It also gives them a chance to test their business models and scale to fit different market conditions. This may also help them achieve lower costs of production and subsequently, economies of scale. This could then in turn translate into charging customers lower prices for the same unit of product.
Nonetheless, expanding one’s business overseas is not without its risks. With that in mind, we hope this post can help you understand and prepare for the risks involved in overseas business expansions.
First of all, make sure you do sufficient research.
If you’re unsure of which country to venture into, try looking at your Google Analytics account. Under the Audience section, go to Geo reports. From there, identify your current international organic search visibility, traffic, conversions and conversion rate. Find out the top countries that you are doing well in and the behaviour of these international visitors on your page. Then, consider venturing into some of those top-performing countries listed in the report.
After identifying countries that you wish to target, you can also conduct keyword research. This will help you understand the potential of these markets by finding out relevant keywords and phrases related to your business which are used in search queries of your international audiences. Keyword research tells you the organic search volume of these keywords per country as well as the level of competition you face in each country. You can also find out your current rankings for these keywords in those markets you wish to target.
Overseas ventures also require a significant amount of investment, which may be a problem for some businesses. The good news is, there are grants that are available for businesses to apply for, which would help alleviate some of the financial burden.
The Market Readiness Assistance (MRA) grant, for example, allows businesses headquartered in Singapore and have an annual turnover of less than $100 million per annum based on their most recent audits to receive assistance in their third-party costs. One thing to note: digital advertising costs are also claimable under the MRA grant!
Another concern you may have entering a foreign market, is the lack of local knowledge. You may be unfamiliar with how the local culture is like, the language used, what the regulations are and how businesses operate there.
As mentioned earlier, you can use keyword research to understand what the local audience are interested in and target them accordingly. If you’re targeting countries where your suppliers or distributors have a strong presence in, you can consider having joint ventures with them when entering these countries. Similarly, you can also work with local businesses who are well-versed about the culture in these foreign countries and seek potential partnerships with them.
Undoubtedly, entering a country where you have no prior presence poses an issue of brand awareness. While traditional marketing in these foreign countries may be unfamiliar or costly for you to establish your brand presence, digital marketing might be easier. 93% of online experiences begin on a search engine. Therefore, you need to plan out your search marketing strategies to increase traffic to your site. Be sure to also fill your site with quality content to help with your search rankings, and to stay relevant with what your site visitors are looking out for. Find out more about optimised landing pages here.
Other than that, you can also make use of social media to create campaigns which can potentially boost your brand visibility. It is also a good way to engage your customers. You can keep your customers in the loop, and inform them of any upcoming happenings through your social media accounts. Such information can also be published before the official opening of your business overseas so that customers can help to spread the word, and you can create some hype around the event.
To sum it all,
Overseas business expansions do have risks involved, but they are definitely not insurmountable. Doing sufficient research, providing relevant information and engaging customers with the right marketing strategies will definitely help build strong foundations and imbue trust amongst the locals in these foreign markets.