Stagnation and complacency is often the beginning of the end for most startups. Therefore we look at business growth as a necessity, so how do we go about it.
One of the best ways to grow a business is through expansion. There are usually two ways of achieving this:
- Expanding your current product offering to new geographical locations
- Expanding through offering new products or services to existing customers
We’re focusing on expanding to new markets and have a few tips on what to consider before investing in your expansion.
To get as much insight and interesting points of view, we sat down with a few startup CEOs in order to get their opinion on expansion and the steps they took before they entered the market.
Perform the right market research
Doing research on a market is quite obvious, but we may be looking at the wrong things or ignoring other aspects that are crucial.
A major obstacle faced by many businesses in this is knowing how best to research a new market. Common techniques include:
- Conduct customer surveys using online services such as Google forms, SurveyMonkey etc., or one-on-one customer interviews and phone calls
- Ask your customers to provide feedback about your products and services on your website and on your social media channels
- Perform live product trials and usability studies in the new market
Beyond the basic, there are other issues that need to be researched.
Before expanding across Malaysia, Ginny Truc To, CEO and Co-Founder of the shoe and sneaker care startup, Shoe Mo, looked at ‘market needs and costs’. This included understanding the high-end sneaker market in Malaysia as well as logistics costs for delivery.
Ginny has expanded to five territories in Malaysia and is looking at expanding into the Singapore market soon.
Read about Ginny’s journey here.
Similarly, David Wong, CEO, and Founder of golfing app, Deemples, focused on market demand and the ability to capitalise on that demand. He looked at the number of golfers, golf courses, and the interest in the sport, as he has already expanded his brand across most of Southeast Asia.
Find out how David is making waves in the golfing scene across the region.
Understanding market infrastructure and readiness
While your business might be mature and ripe for expansion, often the markets need to catch up to you. Here, we look at how to judge the market readiness in terms of the business that you are running.
William Gilchrist, CEO, and Founder of Konsyg, a global Sales as a Service startup, places markets according to three categories – emerging, emerged and mature. This looks at their infrastructure, government support, and other factors that make the market attractive to companies.
Read what William had to share about the problem with sales in the region.
Singapore would be classed as mature, while China would be an emerged market, and Indonesia is an example of an emerging market.
SYNC CEO and Founder, Terng Shing, looks at market readiness in terms of the media landscape and the number of PR agencies in the market. A weak PR market would have very few large agencies and focus mostly on small local PR houses. This is often a sign of an underdeveloped media scene and low demand for PR and content marketing.
His startup has already expanded to Malaysia, and he’s looking at other Southeast Asian markets soon.
A pro-tip from William also includes looking at the talent pool by identifying the MNCs that have large offices or even headquarters in that market. This is usually a good indicator of the type of talent in the market and how ready it is for a new entrant.
Predicting your market share
Why enter a great market, with an amazing talent pool, and a strong economy, if it is extremely saturated.
What exactly is market share you ask? This represents the percentage of an industry’s or a market’s total that is earned by a company or individual over a period of time. You need to understand how big a piece of the pie you can take.
How to do this can be challenging. William suggests asking yourself a few questions:
- What are you bringing to the table? Is it different from everyone else?
- What is the reality of that country or market, and responsiveness to your offering?
- Is there a need for this?
By understanding these questions, and knowing your competitors, you can gauge a reasonable approximation of your market share.
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There are many factors to consider before expanding. We hope that the different points of view from real entrepreneurs was helpful in guiding your decisions.