The vast continent of Asia presents unparalleled opportunities for digital media companies seeking global expansion. With its dynamic growth and rapidly evolving digital landscape, understanding the nuances of this diverse market is crucial for success. While cloud and SaaS technologies simplify initial deployment, a strategic approach is essential to navigate the unique challenges and capitalize on the immense potential.
What truly makes or breaks success in Asia, especially for companies engaged in omnichannel communication looking beyond their home territory?
Why Asia Presents Unmatched Growth Opportunities
Asia stands as the world’s growth continent, home to over half the global population and boasting an incredible mix of sophisticated economies alongside BRIC and emerging powerhouses. Beyond its role as a manufacturing hub, Asia has become incredibly digitally savvy. Its internet and mobile device usage often surpasses that of more mature societies, making it a prime target for digital media expansion.
Many companies are now focusing on new markets in emerging or BRIC economies, driven by sluggish economic growth in Europe and most of the Western World. The rise of cloud-based technologies, particularly in areas like analytics, has eliminated many traditional barriers to international expansion.
Government Support & Innovation Hubs
As businesses and consumers increasingly rely on technology to fuel the internet phenomenon, significant opportunities arise for international companies to compete. While the sophistication gap with local companies is closing, it still offers a competitive edge.
- Singapore actively offers grants to businesses for adopting technology automation.
- Hong Kong provides specially designated high-tech centers for IT companies, such as Cyberport.
- Sydney offers access to grants, business matching services, and a mature market for sales.
Mobility is exceptionally sophisticated across most of Asia, with smartphone usage being extraordinarily high, providing users with affordable access to the World Wide Web.
Understanding Asia’s Digital Landscape
Key Market Statistics & Projections
Research underscores Asia’s digital dominance:
- McKinsey estimated over 1.2 billion internet users in China and India alone by the end of 2014, with internet commerce valued at US$80 billion by 2015.
- The IAB predicted digital ad spending growth of nineteen percent for the region in one year and sixteen percent the next.
These figures highlight Asia as a compelling growth area, but specific regional considerations remain vital.
The Rise of E-commerce and M-commerce Powerhouses
Internet commerce giants in Asia, such as Japan’s Rakuten and China’s Alibaba, have grown immensely, showcasing their formidable online presence. A prime example is China’s “Singles Shopping Day” on November 11th, a designated special shopping event rivaling the US Cyber Monday. In a recent thirteen-hour shopping period, sales exceeded US$5 billion. This significantly surpasses US results of $1.4 billion from the previous year, indicating a shift in the center of the virtual retail world.
Navigating the Complexities: Common Pitfalls & Solutions
Asia is Not a Homogeneous Market
A primary error organizations make is viewing Asia as a single, uniform market. This couldn’t be further from the truth. Like Europe, Asia comprises numerous countries, nationalities, customs, languages, varying levels of sophistication, diverse infrastructure, and a complex history of tensions and conflicts. A successful strategy requires carefully selecting specific locations and establishing a strong presence there before further expansion.
Identifying Strategic Regional Hubs
Within Asia Pacific (excluding Japan), there are three to five crucial regional hubs that provide robust operational bases. These include:
- Hong Kong
- Singapore
- Sydney
- Bangkok
- Seoul (primarily for North Asia)
These hubs are accustomed to international business practices, possess sound and robust civil law codes, have strong banking institutions, and offer strategic gateways for conducting business across the region.
Language Barrier in Regional Hubs
Another significant barrier to entry, even in these hubs, is language. Only Sydney and Singapore boast fluent and widespread English usage. While Hong Kong generally states English fluency, a Cantonese speaker is often essential to ensure complete understanding, especially when explaining technical features or platforms. Bangkok and Seoul have limited English proficiency. Relying solely on English as the key to communication success can lead to misunderstandings and challenges.
Effective Market Entry Strategies
Partnership Models
One of the most straightforward ways to initiate operations is by entering into a partnership with an established IT or digital media company. Such a partner can shadow many of your operations and has existing contacts within your target markets, significantly easing market penetration. (Point 8)
Virtual Sales Functions
Alternatively, companies can appoint a firm that offers a virtual sales function, such as Sales as a Service. This model allows for market presence without the overhead of immediate physical expansion. (Point 9)
Building Local Relationships
Developing strong relationships with National Chambers of Commerce is a mandatory step for market entry. (Point 10) Equally important is forging connections with Overseas Trade Development Agencies to leverage their expertise and networks. (Point 11)
Financial and Legal Considerations
Leveraging Government Export Grants
CFOs and senior management should thoroughly research available export grants offered by national governments and apply to access these funds for their export activities. It’s crucial to allocate a reasonable budget for these operations, with the ability to financially support the venture for at least the first twelve months, ideally to the tune of at least US$100,000. Trips to the region, including participation in trade delegations, will incur additional costs. (Point 12)
Data Integrity and Privacy Compliance
Countries across the Asian region have been strengthening their privacy protection and user laws. Companies must therefore seriously consider setting up local data centers, particularly in light of global discussions around data sovereignty and surveillance (e.g., Edward Snowden material, Wikileaks reports). (Point 13)
Registering your company within a country of operation will help alleviate potential client concerns and instill a greater degree of confidence. This action demonstrates a tangible commitment to the region, signals a long-term contract, and provides assurance for future client service and management. (Point 14)