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Part 1: What Does the Market Look Like?

It should come as no surprise that our world is growing increasingly closer, connected, and reliant upon the various countries and regions that shape the global marketplace. The world isn’t changingit’s growing. As a result, businesses are becoming more and more compelled to not only grow and expand domestically but to move offshore and see just what the rest of the world might have in store for them.

International business expansion isn’t a question of why, how, or whereit’s a question of when. Some of the most successful global brands initially had a dream of expanding internationally. Why? Because of the promise of new revenue streams. And remember, the name of the game when it comes to business is increasing revenue streams.

Today, we're going to look at a region that is an obvious choice for international business expansion and take a deep dive into the reasons why expanding a business into Asia is a wise move. Now, you might be thinking to yourself, “Asia is a massive continent. Where exactly should I expand?” Of course, that's up to you to determine. But throughout this eBook, we’ll paint a picture of the inner workings of the Asian marketplace. Upon first glance, you should be aware that Asia has several rapidly expanding markets. As a result, a business can gain several immediate benefits when expanding into Asia, but some benefits will materialize in the long run.

When it comes down to it, expanding into Asia could be one of the best decisions a business can make. No matter where a company is located, there is always an opportunity to do business in Asia.

Let's answer our first questionwhat exactly does the Asian market look like today?

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The Market at a Glance

There should be no doubt regarding the effect that the COVID-19 pandemic has had on the Asian market. Just like elsewhere in the world, the Asian market was hit hard. However, Asia was one of the first regions to begin to recover from the pandemic, moving increasingly closer to a return to normalcy.

One doesn't have to go too far to determine just what the markets look like in some of Asia's most popular international expansion regions. For instance, Singapore, Japan, and even Indonesia have been working hard not only to recover from the pandemic but to continue to grow their economies and become significant players on the world stage. So let's take a look at each market.

Singapore

Nearly a full year after the COVID-19 pandemic, the massive international hub of Singapore believes that their small city-state country remains positioned to recover and grow.

According to Forbes, “Singapore has not been spared the fallout, and its ability to navigate the difficult conditions is once again on show during this difficult period. The government has rolled out a series of budget packages worth about S$100 billion (US $73 billion) to support businesses and workers who have been hit hard by the pandemic.”

They go on to say, “Besides cushioning the economy from the near-term shocks, policymakers have kept their eyes firmly on the horizon as they persevere with the country’s longer-term transformation. Whether it’s supporting local companies in their efforts to restructure their operations for the digital era, to spread their wings abroad, or to upgrade their workers’ skills, Singapore is once again positioning itself for success in the long run.”

With that in mind, it’s clear to see that Singapore’s government has its eyes set on bolstering its economy to make it attractive domestically and internationally, and that’s providing some ample wiggle room for businesses that are still apprehensive about expanding during or in the wake of the pandemic.

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Japan

Since the beginning of 2020, things in Japan have been looking up. Forbes says, “With the enthronement of a new emperor in May 2019 and the successful hosting of Asia’s first Rugby World Cup, optimism in Japan has been running high in recent months.” And that isn’t by accident. Japan’s government was anticipating the country’s economy to grow by 1.4% throughout 2020. And while that number has been slowed a bit due to the pandemic, Japan has remained a viable option for businesses looking to expand into Asia.

Indonesia

Indonesia is one of the most rapidly expanding regions in Asia. The region is also rapidly building its infrastructure, ultimately setting its sights on sustainable success today, tomorrow, and well into the future. In December of 2019, Jakarta announced a US 400 billion infrastructure plan following President Widodo’s re-election, including more than 2 dozen new airports and power plants, aimed at boosting economic growth.

What does this mean for international businesses? First, it means that they will now have access to a massive, modern, and comprehensive infrastructure to support overseas efforts. Second, with Indonesia growing into more than just a tourist destination, the massive airports that are soon to come will serve as an entry point for new target audiences to market toand that’s just as valuable as a booming economy.

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What Does It All Mean?

As of right now, it’s clear that Asia is a diverse region with several promising cities, countries, and regions. And with that said, it's also vital to remember that we’ve only mentioned 3 broad areas so farSingapore, Japan, and Indonesia. Countries like China, Vietnam, India, South Korea, and others, remain significant players within the Asian market.

Part 2: The Potentialities of Expansion

As you can see, the potentialities of expansion are pretty straightforward. When we use the word “potential,” we’re directly referring to the immediate benefits that an organization or expanding business could expect to experience. However, potential can only become a reality when you know how to take advantage of every opportunity. In other words, companies need to learn how to leverage opportunities to turn them into benefits.

With that said, we will take a closer look at the potential benefits a business could experience when expanding into Asia. Remember, all companies are different, and because the Asian markets offer such a wide range of entry points, it would be challenging to point out every possible benefit across industries. Still, we’ll try to make things clear and comprehensive.

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Asia Is Growing Economically

Almost across the board, Asia is experiencing economic growth. We showcased three specific examples with Singapore, Japan, and Indonesia. However, the truth is that the entire continent is experiencing a fast and sustainable pattern of growth that is undoubtedly dictating a substantial level of international attention. To put things into perspective, Asia's wealth has grown the fastest since the 1960sand this isn’t by chance.

Countries like Singapore, Japan, and Indonesia have made substantial efforts to ensure that their economies grow and achieve sustainable success even amid a global pandemic.

The fact that Asia is growing is more than just a synopsis of its market status. It is, perhaps, the most important potential benefit that an expanding business can use when planning an overall business expansion strategy. Expanding into a region that has maintained an impressive level of sustainable growth is critical. Companies usually don’t want to rebuild an economy because things can be slow at first. Instead, companies tend to want to strike while the iron is hot, and that’s precisely how they leverage the potential of Asia’s growth into a business benefit.

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Asia Has a Large Market of Consumers

Remember, Asia has a massive population. It's also very much a connected population, full of consumers interested in everything from tech to fashion. So another potential benefit for businesses is that the market is already established, with a diverse selection of consumers ready to connect with new companies.

“Many international businesses seek to expand in Asia simply because it is more profitable to offer products or services to 263 million customers in Indonesia than the 1.2 million in Estonia,” according to Acclime.com. And when it comes down to it, the math supports that idea. Every business knows that the more extensive a customer base, the more significant potential for success. Because Asia’s markets are massive and continuously expanding, internationally expanding companies can leverage larger target audiences to their benefit.

There’s a Scene for Startups

One of the most significant factors that have come to light recently within the Asian markets revolves around startups and emerging businesses. Typically, companies like to establish domestically before considering an expansion. But it's becoming increasingly clear that Asia is positioning itself as a hub for startups and innovation. For example, Singapore’s Startup SG program is a unique program designed to give entrepreneurs access to the loans, grants, and funding they need to get their ideas off the ground. Featuring a 7-point program, this comprehensive structure can benefit an interested international entrepreneur who wants to see what the global marketplace is all about.

What Does It All Mean?

As you can see, these are just a few examples of the potential within the Asian marketplace. And this potential certainly isn't going anywhere anytime soon.

With that in mind, let’s dive into some challenges that might arise during expansion efforts. While none of these challenges is detrimental, they should be considered when planning an expansion strategy.

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Part 3: The Challenges of Expansion

This final section will highlight some potential challenges that might arise when expanding.

Funding Is Key

Despite Singapore’s tremendous program designed to help entrepreneurs and startups fund their ventures, that isn’t the case throughout Asia. While some Asian countries provide subsidies to attract international businesses, others prefer to boost their domestic companies first.

That doesn’t mean that expanding into Asia is impossible; however, it merely means that a company must prepare before expanding. As with any business expansion strategy, a new market can be expensive. From incorporating, hiring employees, and acquiring a facility, it all adds up. And when dealing with a different economy and currencies, it can become overwhelming.

Again, this isn’t necessarily detrimental to business expansion efforts, but it’s certainly something to consider in due diligence planning.

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Regulations Are Different in Asia

While some businesses might consider this a benefit, others might consider it a hindrance. For instance, Allbusiness.com brings an essential point to light when they say, “One confusing concept that many people have struggled to come to terms with is that of intermediary liability or responsibility for illegal actions taken by third parties on owned platforms. While content oversight is understandably a key responsibility for any public-facing company, the line is often murky, and numerous stakeholders in the region have ended up facing the full brunt of legal repercussions for the transgressions of their users.”

They go on to say, “Laws concerning foreign ownership can be another major hurdle in certain Asian countries. For example, Thailand mandates that companies have 51% local ownership; Myanmar, however, does not have direct foreign ownership requirements, but many businesses prefer incorporation elsewhere due to the country’s complicated clearance processes."

As you can see, things will differ depending on the country that a company plans to expand into. And it all comes down to due diligence planning. It is critical to know regulations inside and out before even beginning to plan a physical move. It is also helpful to have an ally within the planned host country to help navigate the waters.

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What It All Means

When it comes down to it, expanding a business does not come without challenges. It’s your job to foresee these challenges well in advance and to anticipate the unexpected. Thankfully, Asia is a forgiving market, and many companies have been able to navigate it successfully.