If you are going to invest in a company with international expansion plans, you want to make sure that their product or service has good chances of being successful in the countries where you have ambitions.
Asia is a vast and diverse region, comprising over 40 countries with varied economic conditions, cultures, and business environments. It is home to some of the world’s largest emerging markets and advanced economies, making it an essential region for global business expansion. This article provides an overview of the key commercial due diligence aspects when entering the Asian market.
Asia’s economic size and diversity offer significant opportunities, but understanding the specific conditions of individual countries is crucial. Here are the key market numbers:
Asia’s linguistic diversity presents both challenges and opportunities for businesses entering the region. Language and documentation considerations are essential for success.
Consumer and B2B buying behaviors in Asia vary greatly depending on the country, but there are common trends that businesses should understand.
While Asia offers vast opportunities, businesses should be aware of the challenges, including regulatory complexity, cultural differences, and market fragmentation.
With local people in over 30 countries around the world, we can quickly do a regulatory, market and competition assessment in multiple markets at the same time. Connect with Alfred Griffioen to see what we can do and receive a quotation.
Where it comes to assessing the viability of a product or service in a new market, we always look at the following aspects:
Can the product be imported and sold in the country, what are import duties and are there any restrictions on service delivery? What are the investments to comply to all regulations?
Is there a genuine demand for this product or service in the market and which aspects are decisive for the customers? What are common channels for marketing and sales?
How fierce is the competition and is there a clear market leader? Is there room for a new entrant and what happened to other companies trying to penetrate the market?
What steps are needed to enter the market and what are the related costs. How quickly can you expect revenue and what is a reasonable pay-back time?
We make these assessment with local people in over 30 countries around the world, who report in a similar way. This way you get a good comparison and you can total up the investments needed for global growth.
If the company the we are assessing already has sales in different countries, we can determine distributor performance or sales staff performance.
We do this by correcting the actual turnover with data about:
Combining the data of the various countries over time leads to a growth curve where overperformers and underperformers can be easily identified.
We can then do selective interviews what causes any underperformance, and you can take corrective measures.
A curve like this also helps to estimate the potential in a new market.
Please note that there are many countries in the world and the biggest ones or the ones nearby are not automatically the best choice. It all depends of the market growth, the competition and the barriers for entry.
Therefore I would advise you to make a short-list of at least three, but preferably five potential new markets and compare them against the same criteria.
