By Siddharth Shankar is a leading expert in trading with Asia and CEO of Tails Trading, an innovative new solution helping UK SMEs to export their goods to Asia. Visit www.tailstrading.com to find out more.
Economists predict that nine of the fifteen fastest-growing economies in the world in 2019 will be in Asia. India, Bangladesh, Cambodia, Myanmar, Laos, Vietnam, The Philippines, China and Mongolia are all expected to grow by between 7.4% and 6.2%. This makes Asia an increasingly important and lucrative focus for UK businesses looking to grow their brand globally.
Brexit has put exporting centre stage within the UK and the energy the hastily created Department for International Trade has invested in building trade links around the globe has paid off. UK exports have broken a new record – totalling £639.9 billion in the last financial year.
For businesses looking to capitalise on the market for British goods in Asia and launch a product there, here are some helpful dos and don’ts:
Do: Utilise smart payment
Smart payment is becoming as popular in Asia as in the West. Making the shopping experience easier, quicker and more enjoyable, smart payment gives products an advantageover those sold in retailers without this capacity. Consider this when choosing which local distributors and retailers to partner with.
Retail is booming in Asia and convenience is a priority for consumers. Products that get into stores that meet this need will have the biggest opportunity to grow fast and gain market attention.
Do: Export alcohol, make up, health foods and tech
Make up and skin care products are selling increasingly well in Asia, especially if they are pharmaceutical-related. At the other end of the market, alcohol is a huge growth area. Beer is already very popular in Asia but rum and gin are catching up – and even English sparkling wine is beginning to gain interest. Asian consumers are also spending more on home tech appliances – looking for cutting-edge design as well as functionality. Conveniently packaged healthy foods are also a winner.
Don’t: Assume Western products have universal appeal in Asia
In China, yes – products are often appealing to the market because of their Western branding,but this isn’t the case across the whole of the region. In India, for instance, unless a product is given an ‘Indian touch’ it’s likely to fall flat.
It’s also vital not to make assumptions and instead carefully research how a product could be perceived in each individual market within Asia that you export to. For instance, a British brand might be excused for thinking that, as a Chinese dragon or phoenix is a symbol of greatness and fortune in Chinese culture, this would be acceptable to include on a product. However, an element of clothing carrying these emblems would be frowned upon. Throughout history, these symbols were reserved only for the clothes of royalty and therefore, although people wouldn’t be banned from wearing such clothes, they would be considered arrogant for doing so.
Don’t: Roll out the same approach for each market
A totally different approach is required to launching in each region within Asia. Different products will be successful. For instance, high-end luxury goods are more likely to fly in Japan, whereas across Thailand and Cambodia, heavy industrial products are valued due to their emerging infrastructure. Different launch strategies will also be required. For example, ideally, to successfully launch a brand in India, a company would first launch around the Indian market, in places like Singapore, other ASEAN countries or UAE. Establishing a brand in these destinations eases the path into India. That way the target segment of consumers will already have formed an understanding of the brand, which will likely pique demand.
However, it is comparatively easy to launch a Western product directly into China.
It’s important to even recognise the differences between cities and regions within countries. Businesses tend to automatically target the biggest or most famous cities within a country first when launching a new product. However, this isn’t always the best policy. If launching a fashion brand in Asia, for instance, it could flop if the city is particularly politically sensitive but fly in a more commercial city.
Don’t: Underestimate red tape
The amount of documentation required to export to each country within Asia is extensive. It’s important to plan in enough time and resources to jump through the necessary hoops and be prepared to navigate a legal system that operates in a very different way.The documentation required includes everything from a certificate of origin to different language versions of contracts to licencing products for the target market in order to get clearance to sell them to protecting your Intellectual Property.