Everything You Need To Consider When Expanding Internationally
Looking at expanding new international market is an exciting prospect with potential for exponential business growth - but there are many variables to consider before you launch overseas. In our recent Intro To International Expansion masterclass, experts Meera Govind and Reanna Bowman from Newable explored the factors you need to consider when starting to sell overseas.
Legal and regulatory considerations
Laws and regulations
Different markets may have product standard regulations, licensing requirements and taxation that you are not familiar with, especially if you’re in an industry such as cosmetics or food.
Make sure you research local laws and compliance information before launching your product. There are plenty of resources online, as well as third-party agencies, that can help you with this due diligence.
Import/export regulations
There is documentation and often custom duties required with international trade, which you need to factor into the cost and logistics of selling your products overseas.
Take time to understand and comply with all applicable tariffs, licenses and documentation requirements for cross-border trade. You can refer to third party logistics partners to support if needed.
Intellectual property (IP) protection
You may already have your intellectual property registered in the UK, so ensure your brand is protected in all markets you’re selling in to avoid any kind of (costly) legal complications. It can be a disaster to invest funds into expanding abroad just to realise that you are infringing on another brand’s trademarked IP.
It’s essential to understand and comply with local patent, trademark and copyright laws to protect your brand, products and innovations. IP protection can be a fairly expensive process in itself, but it is worth it in the long run to be safeguarded from a legal standpoint.
Cultural differences
Communication styles and languages
Global cultures have different customs and expectations when it comes to how brands communicate with them. From supplier meetings to customer mailing lists, get off on the right foot by first researching how you best to present yourself and your brand.
Ensure that your website, marketing materials and comms are translated accurately into local language - even when it’s English. For example, recognise any spelling differences or local phrases that differ from your own in order to avoid misunderstandings.
Cultural norms
You want your products to be sensitive to the target market - which means understanding cultural nuances, values, customs and local calendars that impact customer behaviour.
Evaluate your product offering and strategy to ensure that your values align, your branding is mindful, and you’re not launching a new line on an important holiday.
This also applies to building business connections: understand the cultural norms that dictate how you navigate relationships with suppliers, wholesalers, employees and collaborators.
Consumer preferences
Consumer preferences differ across markets, from buying habits to preferred payment methods.
For example, Whatsapp can be the preferred customer service platform in some territories, while others prefer the more formal channel of email. Some markets are accustomed to frequent promotional emails and others are more averse to sales-y newsletters.
Tailor your products, services and marketing messages to resonate with the local preference.
Financial and economic considerations
Establishing yourself as a fully-functional brand in a new market is a costly endeavour, so make sure you’ve examined how you will secure a return on investment.
Financial capacity
Assess your ability to meet the running costs associated with starting to sell overseas: consider operational and distributional spend, marketing budget, team costs, border tariffs and intellectual property expenses.
If your finances don’t (yet) meet these requirements, calculate how much funds are needed to bridge the gap or consider another market.
Market size and growth
Research and analyse the size and growth potential of your target market. Does it work for your business goals and is it feasible?
If you’re looking at multiple markets, pace yourself by entering into them one at a time. This will help you avoid spreading yourself too thinly as you explore the viability of new audiences.
Purchasing power
Consider income levels and disposable income in your target market. Whether you are a luxury or affordable brand, it’s crucial to determine your pricing strategies and market positioning based on extensive research.
Operational and logistical considerations
Production capacity
Make sure your production capacity can meet the increased demand from international markets without compromising quality or efficiency.
If you’re scaling up from a home-based or small-sized operation, there can be growing pains when it comes to finding a manufacturer that maintains the same product quality. Consider the financial and time costs that will go into searching for the right production partner.
This is particularly relevant if you are targeting wholesalers, many of which deal in large order units. Make sure you are ready to supply the capacity to meet their demand within a reasonable lead time.
Logistics and distribution
Assess logistical considerations such as shipping, warehousing and inventory management. Shipping items across borders can levy custom charges: decide whether you will you pay for these or if you will pass them onto the customer (and if it is the latter, make sure the customer is aware of this before purchase.)
Similarly, decide if it makes more sense for you to ship directly from the UK, which increases the delivery time but can feel more reliable, or if you need a warehousing partner in target market, which cuts the lead time but involves building new manufacturer relationships.
Supply chain resilience
Do a comprehensive evaluation of the resilience of your supply chain in order to withstand disruptions associated with selling internationally.
Do you rely on raw materials coming from overseas? Transportation delays, supplier issues and geopolitical instability are all examples of risks that could jeopardise your presence in the market. Consider assessing your options when it comes to manufacturing locations, such as opting for a production partner in the same territory or in multiple countries to limit disruption.
Watch the Intro To International Expansion Masterclass >
Find out more about the Lloyds Bank International Trade Portal >
