Tom Kiddle, UK Country Manager of international fintech and payment service provider WorldFirst, details the three reasons why you should consider tapping into new territories this year, alongside top tips to implement within your business
With international expansion comes more than just market share. Think global brand awareness, seasonal opportunities, diversified investments and the chance to acquire talent from around the world.
The need for a business presence on global marketplaces became more apparent as the pandemic hit, with e-commerce and online marketplaces seeing surges in activity. Quick-thinking, adaptable and proactive businesses of all sizes grasped the opportunities presented by the new digitised business landscape.
As data reveals 45% of business owners are currently planning to take their offering abroad 1, 2022 could be the year that sees you break into new markets, diversify your offering and cement your reputation on the global stage.
Expanding your business overseas needn’t be daunting either, with online marketplaces catering to the masses as well as many a niche field. E-commerce businesses are now easier than ever to set up.
New revenue potential
Expanding your business overseas opens up new revenue streams, with £600 billion in goods and services exported every year by the UK2, however, only one in ten businesses currently export. Going global will expose your business to millions of potential customers in international markets and create new opportunities for growth.
Once your business has reached a point where domestic growth has slowed, you should start thinking about overseas expansion to continue growing your business and increasing profits.
The availability of e-commerce channels, online marketplaces and alternatives to foreign business accounts have changed the business landscape and reduced barriers to global growth. Taking your business global has become a lot more cost-effective and less complex; it’s easier than ever to make and receive payments in various currencies, allowing you to manage your finances when trading in international markets.
However, make sure you choose your target markets carefully and do your research. Expanding to a new country only to discover that the regulatory landscape poses significant hurdles, or there is a shortage of suitably skilled workers, will create unnecessary costs and headaches.
Monika at Glamour Empire Ltd describes how her business benefited from expanding into international markets: “Glamour Empire started in 2013 in the UK as an e-commerce storefront selling maternity wear on online marketplaces. At the very beginning, my retail audience was predominately in the UK, however as my online business grew, we expanded into Germany, Spain, Italy, France, Sweden, the Netherlands, and more recently, Poland. Whilst I still retain a strong UK customer base, around 85% of my sales can be attributed to buyers in Germany.”
Diversifying to avoid concentration risk
Overseas expansion allows you to build a safety net for your company should your domestic market experience fluctuations. This means if your sales are impacted in one market, you can lean on sales in others so the impact on your business is reduced.
Expanding your business internationally is one of the easiest ways to diversify your business, helping you to ensure it’s protected from any fluctuations in a single market, whether predicted or unforeseen.
Expansion can also open up new opportunities for product diversification. This will further allow you to protect your business from changes in regulation, dips in the market, and workforce or material shortages, whilst opening up new opportunities to gain customers interested in a more diverse product range.
Monika at Glamour Empire Ltd. comments: “Product diversification was key to my growth strategy, and the introduction of new product lines outside of maternity clothing meant I was faced with new demands. By introducing new lines such as loungewear and dresses, the new products were different enough from my core retail offering (maternity), but similar enough to appeal to my existing customer base, as well as fresh audiences. As I entered new European markets my sales increased, and I was able to access new revenue streams.”
Outpace the competition
Taking the plunge to expand into new markets can allow you to outmanoeuvre your competitors and place yourself as an industry leader. You may have found that domestically the landscape in your industry is saturated with competitors, so overseas expansion can allow you to tap into new revenue streams.
Make sure you carry out detailed research to identify the markets where the availability of your product is limited. You can also support this with consumer research to ensure that there is a strong appetite for your product range. It’s also important to make any necessary tweaks and adjustments to the products, their online listings and marketing strategy so it is tailored to the demands and preferences of consumers you are targeting.