Once you’ve done some research and determined where your product or service best fits in the Asian market, it’s time to test it on a smaller scale.
“One example of how to test your product before exporting is by going and participating in international trade fairs and exhibitions in overseas markets. Sometimes it’s also possible to establish a relationship with importers from the region for testing the product overseas,” Amarasena says.
By going to international trade shows and exhibitions you’re not only able to witness first hand people’s reactions to the product, but also gauge the local competition and determine if your product or service could be price competitive.
After conducting the initial research, Mace says trade fairs are a good testing ground to see how your product compares to others on the market.
“You need to see who else is out there, initially this is desk research and visiting and attending trade shows and seeing what people are selling and what they’re selling it for. But it can also be done by going to the country. For example, if it’s a grocery item, you can go to the local supermarkets and see how much other similar products are selling for,” he says.
Amarasena says a product does not need to be successful in a domestic market, for it to be received well overseas.
“Market conditions overseas can be very different, so testing locally doesn’t help you to gain the required knowledge. I think it’s much better to test the product in the market itself,” Amarasena says.
According to the Australian Trade Commission’s Austrade website, if a product is successful locally it’s got a greater chance at generating a profit internationally.
“In most cases, solid domestic sales form the basis of a good exporting business. A successful domestic business gives overseas buyers confidence in you as a supplier and will ensure that your business processes are in place and well tested. Importantly, strength in the domestic market will also provide you with cashflow and the working capital you need to invest in developing your export markets,” Austrade says.
In some respects, Asia is a whole different ball game to Australia. Businesses wanting to export to Asia need to learn about the array of different written and unwritten rules which dictate behaviour and business conduct and arrangements.
Amarasena says “business diplomacy” is needed when exporting to Asia.
“Different cultures have different ways of doing business. Understanding other ways of doing business and adapting to a different system is all about showing respect for each other,” he says.
The book, Kiss, Bow or Shake Hands: Asia by Terri Morrison and Wayne Conway details some of the cultural differences which, if you remember, will give you a leg up in the Asian markets.
In China, understanding name orders and titles will immediately give you an advantage and set you apart from others who haven’t done their research. Age is also respected more so than in Western cultures and the oldest person is expected to be respected and elder representatives at business meetings or conferences are expected to enter and leave the room first.
Handshakes also differ greatly between Asian nations and if it’s not done correctly, it can be seen as a sign of disrespect. In India, a two-hand shake is common, where the person offering the handshake places their left hand over the top of the other party’s left hand. In Japan, handshakes are not common, as traditionally bowing is the accepted greeting and they are often repeated multiple times. In China, handshakes have become more commonplace, particularly when dealing with Westerners, but unlike in Australia where a firm grip is preferred, a limp hand indicates humility and respect.
Businesses should also be aware in China the use of the internet is subject to far stricter government controls and websites and the media are censored.
Legally, there are also a number of things to consider, such as intellectual property rights, bribery and competition laws.
Mace says legal agreements and entitlements in Australia do not necessarily apply overseas.
“Agreements made here under state or Australian law might not apply in overseas court systems. Agreements and court documents also need to be made in the local language, so it’s important to make sure the translation is correct,” he says.
Mace says time in overseas courts can be costly, but there is an alternative.
“Arbitration procedures through the International chamber of commerce offer internationally binding agreements subject to enforcement worldwide. This process is much cheaper and quicker and sometimes more effective than going through the courts,” he says.
When exporting overseas, it’s also worth reading up on the World Trade Organisations TRIPS Agreement, which provides some international intellectual property agreements for countries belonging to the WTO.
Mace says it’s important to receive sound legal advice throughout the entire exporting process in order to ensure you’re compliant with local regulations such as custom requirements and bribery.
“Just be aware that you need to be careful and seek good legal advice. The Chinese government is quite keen to cut down on all the bribery and corruption going on, but in regional centres people tend to have a fair bit of local power and some business people go in there a little bit naïve,” he says.
When entering a new market, clever marketing tactics can be used to make your product or company a household name from the outset (for all the right reasons).
Amarasena says knowledge of the local language is crucial when translating product names between cultures, in order to avoid embarrassing or negative connotations with the brand.
“There needs to be sensitivity in translating the language. I used to promote for Ceylon Tea and the logo was a lion. But when ‘lion’ was translated into Arabic, it turned out it meant ‘Asad’ or ‘Assad’ and this had connotations of the Syrian president,” he says.
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