What are the challenges that come with expanding your business abroad?
Taking your business to new territories can help you tap into new markets, expand your customer base, and boost revenue. However, it is an area often dominated by large corporations. Venturing into unknown territories can be daunting for SMEs as it involves different cultures, nuances, and regulations in international markets. Allyson Stewart-Allen, Chief Executive of International Marketing Partners, Garima Srivastava, Senior Trade & Customs Specialist at The Institute of Export & International Trade, Russell Dalgleish, Founder & Managing Partner of Exolta Capital Partners, and Kim Antoniou, Founder & CEO of Auris Tech, sat down for a panel discussion at Elite Business Live 2024 to speak about the challenges of international expansion and how to navigate through the complexities.
Kim, whose business is planning to expand to India, spoke about the importance of understanding local culture. Tailor your business to meet the needs of the local community, she said, rather than trying to directly replicate it. What works in one country may not work in another. Also, secure allies that have strong international connections. They can help support your global expansion strategy by understanding the target market from a local perspective, ultimately helping shape the expansion approach. Kim said: “We’ve learned a great deal from doing pilots in India, which we are planning to expand to. We’ve got some really amazing advisors, one of whom knows the territory really well and helped us by introducing us to what we consider a really trusted partner.
“That was the most important thing for us – finding a trusted route that you believe can help you. The first thing they taught us is don’t think you can replicate what you’re doing and think it will work in a new country. Our platform is very much built, almost like a playbook. It’s a platform children read out loud and in the background. The platform works pretty much the same in any territory, but just because it works in a way over here doesn’t mean that you can replicate that exactly in another country. We learned that if you work in India, work like the Indians.”
It can be difficult to understand the way of life in a country that you’ve never been to. When expanding your business abroad, it is important to learn about the beliefs, nuances, and norms of the country. Sometimes we can be misinformed due to unconscious bias, so it is key to learn about the country you’re choosing to expand to. Embrace your own culture, Russell said. More often than not, people abroad have a great fascination with England – and that can be a hidden advantage to play on.
Russell said: “I think we all, as human beings, suffer from something that’s described as unconscious bias, whereby the way we’ve been brought up, the way we’ve been educated, and the way we work, we start to build up beliefs about how businesses should work and how people will be in different parts of the world. It’s only by travelling that you can really understand the reality of expanding internationally. But also, when you’re working internationally, you’re looking for connections, you’re looking for ways to partner with someone, ways to work together. The second part is to play your culture. People around the world have a huge respect for people who come from the UK. We ourselves can sometimes be quite self-deprecating about it, and we can also find it quite difficult when people are so excited to talk to you about the royal family. But for the whole world, they’re digesting the royal family almost like a TV show.”
There are several complexities you need to be aware of when entering a new market. These include understanding cultural differences, political situations, market demand, and especially regulatory aspects. It is important to brush up on your knowledge of customs compliance when exporting goods, including how to claim benefits and duty exemptions. Companies should be aware of the specific geographical market they are targeting to understand compliance levels and leverage supply chain benefits.
Garima said: “Entering a new market is more than just understanding cultural differences, the political situation, or the market demand in that particular geographical location. It’s also important to be mindful of the regulatory aspects. When you are exporting your goods, for example, to a foreign market, it’s important to know what your customs compliance management will look like and to understand your product well enough to claim the benefits or duty exemptions that you are entitled to. For this, we look into free trade agreements with different countries. The UK, for instance, is in negotiations for a free trade agreement with India. Getting preferential rates of duties, as per free trade agreements, is a norm when dealing with any South Asian market. Companies should be mindful of the geographical location they are trying to expand into so that they understand the market and compliance levels and can leverage the supply chain benefits out of that market.
“It’s also important to get support from a market like India, which is a bustling market. For someone sitting in the UK who doesn’t know the Indian market well, leveraging services like customs broker services in India is crucial for handling regulatory compliance. India specialises in many areas and is also advancing in terms of digitisation of trade and customs. Understanding how transparent the digital platforms in India are is important, as digitisation is extremely important in today’s international trade. Understanding these platforms and the privacy concerns that come with them is essential for contemporary international trade.”
If you already have a business and want to expand abroad, how do you go about it? What are the first steps you can take? There is a lot of free advice and resources available for those taking their first steps in international trade. Spending large amounts of money isn’t always necessary, depending on the specificity of the advice needed, Allyson added: “The government does a huge amount of work in this space, doesn’t it? Sometimes it’s just knowing where to look and coming to events like this. The Department for Business and Trade, which you obviously know very well, offers workshops and publications. You can get an international trade advisor to give you their time, expertise, and introductions. Another valuable, often underexploited, resource is your trade association. If you’re not yet a member of a body that represents your sector, you should consider joining. They know the trade shows, make connections, and usually have a magazine or publication that comes out monthly. There are plenty of free resources out there; you don’t need to spend incredible amounts of money necessarily. It depends on how specific you want your advice to be.”
