The 4 Biggest Challenges To Growing Your Business In Asia—And How To Overcome Them
Because Asia is such a unique part of the world, expanding there has its own challenges.
Many companies in the U.S. and western Europe harbor dreams of expanding into Asia, where opportunities for growth are vast and span industries. At Skylum, for example, Asia was an enticing play for us on account of its massive photography market—and it paid off. Now, for one of our keystone products, Luminar, Japan has become our third largest market.
But our expansion into Asia also bore other benefits. Asia––with its diverse array of cultures, people, traditions, and philosophies––is a fascinating place to explore; there’s so much to learn. By engaging with local communities and business people across the continent, my team has become wiser and more empathetic. We’re better at what we do because of our expansion.
It’s not all roses, though. Because Asia is such a unique part of the world, expanding there has its own challenges. Here are some of the most common—and how to overcome them.
1) Choosing which part of Asia you’re going to expand to
First, Asia is not a single entity; Singapore is very different from China, which itself is different from Japan, and so on. This may seem obvious––that the continent of Asia is huge and diverse––but many westerners have a damaging misconception that Asia is a homogeneous region. As such, a crucial mistake western business people make is approaching expansion efforts into Asia with a kind of one-size-fits-all approach.
The truth is, every Asian country has its own way not only of doing business, but of living life. Western entrepreneurs must appreciate these differences, work to understand them, and use that understanding to inform where in Asia they’re going to set up shop.
To say, “We’re expanding to Asia,” with no further strategy is certain to fail. Instead, you must plan more purposefully. The first step is educating yourself around the different markets and regions––along with how they may already be engaging with your products––to determine which might prove most welcoming to your business. Only once you’re equipped with this awareness and understanding will you be ready to move forward.
2) Arduously researching the country you’ve chosen
Once you’ve identified on a surface level where you want to expand, you need to heavily research that market and society. You must educate yourself around how the people there engage with your kind of technology, what sort of relationships you might need to cultivate, etc.
For my team at Skylum, when we endeavored to expand into Japan, this meant finding out––among other things––how many photographers were currently working in that country; what they liked and didn’t like about the current market; how many photography businesses were currently operating; and what problems both those businesses and consumers needed solved.
The first step was to make a visit in-person to the country. We traveled to Japan and conducted meetings originally scheduled from our offices halfway across the world. Then, when we were ready, we sent a person to Tokyo to establish an office and formalize new connections, tediously going through meetings, setting up coffee meets with photographers, and outreaching the local––and very traditional––media partners.
3) You have to be patient.
Here’s the truth: Wherever you hope to expand, you have to know that the people living there already have successful businesses of their own. It’s possible they’ll view your entrance into their economic system as an intrusion rather than something more welcome. For these reasons, it may be some time before you’re able to make an impact and see a return on your investment.
Also critical is playing by the rules of decorum established in the country––the key points of doing business in places like Japan, where personal connection matters a lot and potential profit doesn’t carry as much weight as the right intro or the right manners. In Japan, for example, unlike in the U.S., the first meeting is never about business. We meet and learn about the partner and their work, but we never discuss terms or what we want to accomplish—all that happens during a second or, more likely, a third meeting. The first one is purely personal.
The challenge here, of course, is being patient. Many western entrepreneurs are used to closing quick deals and acquiring results right away. But that’s just not how it works for new businesses fighting for a foothold in the East.
4) Expanding to Asia is expensive.
Finally, growing your business in Asia is not cheap. There are the obvious costs of setting up shop in a new country––legal, hiring new people, advertising, etc.––and, of course, you’re going to make inevitably expensive mistakes along the way.
In some parts of Asia, such as Japan and China, a considerable investment is required not only for basic tasks such as localization or customer support, but also for more substantial changes to the product. The Japanese, for example, are looking for more precise instructions and clean design, and don’t mind a complex product if it comes with appropriate educational material. In China, on the other hand, design matters less, while the speed and ability to offer complementary services along with the product plays a more important role. For example, Haidilao, a successful chain of restaurants in China, offers free manicures, free shoe polishing, and free snacks and games for customers waiting for a table.
The cultural differences between Asian countries and those in the West are immense. Bridging those––by way of education, relationships, and empathy––requires large amounts of time, energy, and capital. It requires strategy and a willingness to adapt. Moreover, it requires patience.
But, ultimately, all of this is worth it. There’s just so much potential. We’ve seen it at Skylum––we’re acquiring more Japanese customers every day––and if you approach Asian expansion with the challenges above in mind, it’s likely you’ll see it, too.
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