by Jay Eum, co-founder and Managing Director of TransLink Capital
At one time, expanding into Asia was considered a luxury — a feat attainable only by the largest and most well-heeled companies in the country. But, in today’s global market, the booming economy, massive population, mobile adoption and growing middle make Asia an attractive—and fully attainable—prospect for virtually any young upstart.
A hotbed of innovation and cutting-edge technology, the Far East is an ideal marketplace for tech entrepreneurs with its fast-growing infrastructure, eager investors and high-growth companies, not to mention a very large pool of new consumers. After all, more of the world’s population lives within the Asian Ring than outside it.
However, aside from the geographic challenges, pursuing new business opportunities in Asia takes careful planning, a clear understanding of cultural nuances and an experienced and engaged partner to help you establish a presence on the ground. Here are five tips to help any company get it right:
#1: Timing is crucial.
How do you know when the time is right to pursue opportunities in Asian? There is no one-size-fits-all answer. The reality is that working in any overseas market takes a significant commitment of time, energy and resources to nurture the deal.
For very young upstarts still trying to get a firm footing in their native market and already running at maximum capacity, it’s probably too soon. Start by building sufficient capacity and momentum at home, then leverage that success to make the leap. Thanks to the global nature of business and social media, it’s highly likely that potential interested partners in Asia may actually find you before you find them. But, be careful not to get too caught up in the excitement—it’s still prudent to wait if you’re not ready.
#2: Pick the right entry point.
Asia is an extremely diverse continent, with 45+ countries, each home to different languages, cultures, ethnicities and unique business environments. It’s absolutely no place for a one-size-fits-all approach. Choosing the right market to make your debut can have a make-it-or-break-it impact on your future success.
For example, with a market nearly six-times the size of Korea, it’s tempting to make Japan your first priority. However, penetrating the Japanese market can be challenging and time-consuming. On the other hand, Korea is a much smaller market but enterprises there typically work much faster to adopt new technology and forge partnerships. In many cases, it’s easier to establish a presence in Korea, then conquer the larger market opportunity in Japan with a proven, vetted technology.
Instead of just “defaulting” to the biggest market as the best opportunity, choose the one best suited for your product and company, and focus your limited resources there.
#3: Know what to expect.
Certainly, there will be some obvious challenges, like language barriers, cultural differences and time zones to overcome. However, the bigger surprise may be the way in which Asian companies prefer to operate compared to those in the U.S. Here, entire business deals are often closed via email, phone and Skype. In Asia, “face time” is much more important. You have to be willing to travel and build that personal relationship. For Asian companies, it’s less of a B2B deal and more of a partnership between individuals. It’s also much more credible and valuable to gain firsthand experience with the people, culture and nuances in your target market.
#4: Reputation matters.
Most Asian executives operate on a social system that is highly focused on reputation. Not just individuals, but corporations also have their own personality and legacy. In Asia, first impressions are vital and remember that your reputation precedes you. Expect that potential partners will do their homework to learn more about your reputation before they even consider a meeting, and you should do the same. Here, burning even a small bridge with one partner can make it difficult to form future partnerships down the road.
#5: Get help.
Getting your foot in the door can challenging. Finding a partner who can help you understand the cultural and business nuance, as well as identify and navigate the specific market opportunities in each country, is critical. Beyond just a “salesperson” to make your pitch, you’ll want an experienced, well-entrenched and committed partner with an extensive network of companies, investors and business associates on the ground. The ideal partner is a true matchmaker, someone who is committed to helping you meet your goals and objectives, but also knows what partners and customers in Asia are looking for—and how to find the “sweet spot” to marry the two.
Are you Ready to Make the Leap?
As with any market expansion, pursuing the Asian opportunity can be an exciting, exhilarating—and somewhat intimidating—prospect. The sheer magnitude of the market makes it easy to become mesmerized by the potential and inclined to dive head first into the deep end. Instead, focus on finding the right partner to help you navigate the process, choose your market carefully, then be patient yet persistent in building strong, stable relationships. After all, you may not have another chance to get it right.
Jay Eum is a co-founder and Managing Director of TransLink Capital. Jay is responsible for TransLink’s investments in Carbonite (NASDAQ: CARB), Chartboost, Enterprise DB, Livescribe, nWay, Peel, Quixey, SoundHound, and YuMe (NYSE: YUME). He is also responsible for supporting TransLink’s portfolio companies with their customers and partners primarily in Korea.