As retailers increase in size, the opportunities for growth and development in their original market can become few and far between.
For eCommerce and physical retail businesses alike, market dominance in one country or region can lay the foundation for expansion into new markets and countries. Furthermore, international expansion can help to diversify revenue streams and support sustainable growth – but it’s also a risky strategy. What are some tips to help reduce the risk when expanding internationally and make success more likely?Â
Take time to prepare
Preparation is key. Do your market research and create an expansion plan that outlines that your strategy, key threats and opportunities. You should be exploring cultural differences, market trends and demand, and really trying to understand what your target market wants or needs. You also need to highlight and plan for any operational challenges that may arise during your expansion. A lack of planning could ultimately lead to your failure, so take your time and get it right.
Ensure you’re financially stable
Your financial situation should be healthy for you to be even considering international expansion. If your accounts are already in distress, attempting any sort of expansion is only going to bloat your costs and put your business into a vulnerable position. Review your budgets and accounts, then confirm that you have the funds to invest in expansion before laying the groundwork.Â
Establish a physical presence
International expansion demands a lot of time from individuals and your business as a whole. Therefore, it’s common place to establish a permanent, or at least temporary presence in the region you are expanding to. Having yourself or a team member on hand to meet local contacts, develop working partnerships and manage tasks can be invaluable. If you’re setting up in New York, for example, an extended stay in one of New York’s serviced apartments could be a nice place to call home while things are getting started.
Use local knowledge
Expanding into new territories can be a challenging task, particularly where language and cultural differences dominate. It may be worth hiring a local consultant or taking advice from locals when starting out to supplement your own market research. They can help you to identify threats and opportunities, as well as provide insight into societal trends that you could use to your advantage. You can learn most things on the internet these days, but certain things can only be learned from actual experience.
Stay flexible
It’s important to stay flexible and agile when expanding into new regions, particularly if it’s your first attempt. Putting all your eggs in one basket increases the risk, so have a backup plan if your new expansion plan doesn’t succeed. Ensuring that you remain flexible will be key to overcoming hurdles and challenges that will undoubtedly be thrown your way.
