Do's and don'ts of expanding your business overseas
When is the right time to make the leap to overseas expansion?
By: Mari-An C. Santos | May 13, 2012 13:00 pm
The wide world out there certainly offers a bigger market for Filipino entrepreneurs who have already road-tested their business ideas locally.
Sheryll Ang-Tiong of Proud Mama Store says: "Many companies want to sell their products overseas because it offers a whole new market. If you think that you've already reached most of your target market for your business in the Philippines, exporting your products to another country will give you a new set of clients to target." Her partner, Rianna Roces-Trinidad adds that "higher volumes help one maximize economies of scale, allowing for better profit margins. Exporting abroad also strengthens the brand image, giving it more credibility."
Joey Cuerdo, proprietor of MOJO Flip Flops, also points out that through exports, "the business becomes more stable and less susceptible to fluctuation in local demand."
But just because you think the world will be a much better place if your product reached every corner of the globe does not mean that you should expand, pronto! There are a lot of factors that you should consider before choosing to take definite strides in that direction.
When it comes to overseas expansion, there are several routes you can explore.
- Online store. Through their online multiply site, Proud Mama Store has reached mothers in different parts of Asia, Europe, and America.
- Exporting to or supplying existing stores. Cuerdo opines that this is the least risky. "Opening a store without a local name is premature."
- Offshore buyers. Proud Mama Store also has wholesalers in Asia, particularly in Hong Kong, Indonesia, and Singapore.
ARE YOU READY?
If you went through different stages of preparation and adjustment before opening your business, so should you do before expanding overseas. The market, after all, is made up of different cultures and different tastes. You need to spend much time, effort, and investment before you get your feet wet.
- Check the competition. Tiong cautions that "before you start exporting to a country, you'll need to check if similar products are already being sold there. Are your products unique? Are you items better or cheaper than the ones that are locally available?"
- Assess the market. Trinidad advises you find out "if the market shows inclination for and appreciation of similar products; and if the new market has a large concentration of your 'bulls-eye target market' (in our case, new moms)."