How Asian companies can expand in Europe
Asia and Europe have become strong economic partners during the last decade and there is more to come.There is a China USA trade war happening at the moment which is seen as a threat to the world economy, but trade between Asia and Europe is now larger then trade between these two continents and the USA. Trade between Asem countries (Asia-Europe meeting, 30 counties in Europe and 21 in Asia) is now half of world trade and is likely to grow much more due to deregulations and active trade promotion. This is not very strange as both Asian and European people both live on the same island!
How can Asian companies expand in Europe? A few tips:
1. Europe is diverse
There is not one Europe and several languages are spoken. In general terms an Asian company will most likely be most successful in it's early stages of European growth in regions where English is widely spoken en business is open to Asian companies. The UK, Germany, Netherlands and Scandinavia are potential markets. In general these are also the wealthier and most densely populated parts of Europe with the best logistics infrastructure. Focus on 1 or 2 markets to test the waters.
2. Work with partners
Also a generalization but it is a good idea to involve local distribution partners in your business development. They know the market and local culture, they have access to potential clients. They are there 24 hours per day without time difference. There are several models of cooperation, from one man consultancies to agents, distributors and licencing partners.
3. Investment needed
Prices are often much higher in Europe than in most of Asia. Office space, advertisement, staff, travel. You have to realize that in order to become successful in Europe an upfront investment needs to be taken into consideration. Europe on the cheap is not possible, and if you do not invest and show commitment it will not work. A good start is to set a budget for, let's say, a first year of business development and testing the waters. Evaluate after that first year. We have seen several companies not making this investment, not spending enough and therefore also not becoming successfull.
4. Use the public connections
In the early stages of growth contact local embassies, trade associations, bilateral chambers of commerce and start up support agencies. They can support you and know local markets quit well. They are not always as well connected as locals to the local business community in your sector as a local business representative would be, but can help you connect to them. Large international banks also may have relevant connections if they also have an office on the ground in Europe.
5. Don't just go once
Expanding in Asia is difficult for an Asian company. Expanding in Europe is even more difficult. It takes time and a lot of effort.That said, if you can make it you have access to one of the largest, most wealthy and densely populated regions in the world. So don't just come to Europe once, if your business trip felt disappointing, put effort into growing your knowlegde and network for a second or third visit.
6. Pick the right event
If you have a reason to come to Europe to meet potential clients or partners, try to plan around a relevant event in your industry. These events can lead to good additional connections and help you understand the development and structure in the market. It makes your trip much more efficient.