Best Practices for Retailers Entering International Markets
Expanding a business can lead to far greater profitability. However, it’s a process that comes with risk attached, and so preparation is vital. This applies especially if you’re expanding across international boundaries, and having to deal with all of the complexity associated with doing so.
Let’s take a look at best practice when it comes to this kind of expansion, and see what pitfalls there are – and how those pitfalls might be avoided.
Understanding Market Demand and Consumer Behaviour
It’s first worth understanding whether your new market is viable. What kind of demand would your products and services enjoy, and how might consumers in the new territory respond to your offering?
Market research is invaluable. Look for insights into not only the kind of products that shoppers buy, but the way that they buy them. Often, cultural differences are difficult to quantify – which is why the input of a local consultant can often be key.
Navigating Regulatory and Compliance Issues
Different parts of the world come with different sets of rules and regulations. Fall on the wrong side of the law, and you could be made to pay heavy penalties and fines. On top of that, you’ll suffer reputational damage – which is highly undesirable when you’re trying to create a positive impression and launch your business in an unfamiliar part of the world.
For example, there might be product safety standards in force in your new territory which are slightly different from the ones you are used to. Bringing in an expert solicitor will help you to spot these differences, and sidestep the difficulties that come along with them.
The best example of this is probably the divergence between Britain and the European Union. Post-Brexit, UK companies have extra procedures surrounding customs to deal with, which must be considered when entering European markets.
Retailers should consider partnering with a third-party service that can act as a local employer, ensuring compliance with local labour laws and simplifying the hiring process in foreign markets. This kind of business, called an ‘employer of record’, can make a big difference to your chances of success in the new territory.
Adapting Supply Chain and Logistics for Global Operations
Crossing large distances, and national boundaries in particular, can make things more complicated for supply chains. Managing inventory, or simply shipping goods through border checks, might impose additional costs.
In some cases, worldwide emergencies, like the Covid-19 pandemic, might interfere with your supply chains. Having contingency plans in place will allow you to deal with these disruptions as they arise.
Of course, there’s also the difficulty of estimating the time it takes for shipments to arrive, and adjusting customer expectations accordingly. Generally, it’s a good idea to be conservative with your promises. That way, you’ll leave yourself a margin for error.
Building a Strong Local Presence and Brand Awareness
If you’re operating in a new territory for the first time, you might find it difficult to build up awareness of your brand. This is where partnering with local businesses and individuals can be helpful.
Social media provides a number of opportunities to spread the word. Partner with local influencers who produce content based around your particular niche. Make sure that your advertising campaigns are tailored, and that you aren’t violating any cultural taboos. You might run region-specific promotions during popular local events like Singles’ Day in China.
Hiring and Managing International Talent
If you’re running an international business, then it follows that you might be hiring an international workforce. Here is another area where legal compliance is vital. Stay on the right side of the local labour laws, and make sure that teams are well coordinated across different territories.
