Alex Gover, Director of Business Development at Intralink, discusses the options for UK companies thinking about establishing a presence in the Far East. Oxford-based company Intralink works with Western firms to develop and implement business development strategies in Asia.
So you have a growing company, cash in the bank and Asia is the next big thing. But who to hire and where to locate your VP Sales APAC? Singapore seems sensible – safe, good standard of living, advanced infrastructure and high English levels. But wait – can that be right? It says it’s a seven hour flight to Japan which could well be one of your key markets. What about Hong Kong? All the benefits of Singapore, but a stone’s throw from China, which could after all be your endgame with billions of people itching to buy your product.
Come to that, why not China itself? Many people now see Shanghai as the natural centre of Asia operations, geographically central and more and more "user-friendly” for ex pats, returnees and their families. And then there’s Thailand with its growing manufacturing economy (and nice beaches), and, well, lots of places come to think of it.
When we hatch our plans for world domination, we all like to keep things simple: Americas, EMEA, APAC. Easy. The problem is that Asia Pacific can mean pretty much anything from Turkey all the way down to Australia. In fact the “Pacific” part in some cases includes Russia, and even America, which makes it all very confusing.
A term which you used to hear a lot is “APeJ” – “Asia Pacific excluding Japan”: in the old days pretty well everywhere in the region, apart from Japan, was an “emerging” market. The past 20 years has put paid to that notion: South Korea is now a leader in industries ranging from automotive to electronics; Taiwan now not only makes but also designs most of the household electronic brands we know and love, and China has over a million, millionaires and is the number one producer in a whole range of industries from wind turbines through to solar panels. The Chinese automotive market, for example, has doubled over the past five years, surpassing the United States to become the world’s largest market. Many European, Japanese and American car makers and their suppliers are building not just factories but whole R&D centres in China to take advantage.
OK, so a good chunk of Asia is now developed. Excellent, but one of the problems with “doing Asia” is that when companies decide to pursue business in “the Asian market,” the “China market” or even the “solar market” is that what they really want is a customer. There is a key difference between targeting a regional market or “market sector” and targeting specific customers and this distinction is often overlooked. Successful companies are generally not that concerned with which particular “market” their customers belong to and rightly so. Whoever said: “There’s no such thing as markets, just customers” was on to something.
So before making a decision, lets take a step back; you have some good leads, hot prospects even, but not many serious customers delivering sustainable revenues - yet. Wouldn't it make more sense to identify who and where your hottest prospects are and focus your efforts on them? In other words, rather than setting up shop in Singapore and then taking a long haul flight to Tokyo, interpreter in tow, to meet your key Japanese prospect, it’s worth thinking of the alternatives.
One option is to identify a local "in-country" organisation that can cost-effectively represent you on the ground. Naturally there needs to be a level of trust and confidence that they can understand and run with your product. But equally important is that it is someone who has the right local contacts, experience and language ability. And, by the way, that’s not just fluency in the local lingo but also the ability to speak your language in a way that doesn't leave you scratching your head. The key, in other words, is to be able to efficiently deploy feet on the street that can speak the local language, build relationships, drive your sales cycles and provide you with that crucial visibility, ensuring you remain in control.
So where does that leave you? Well the good news is that you now have a bit more in your budget: hold fire on your Singapore office and ex-pat package, focus on who and where your near-term revenue opportunities lie, find someone with local expertise, and develop a customer-focused approach to the region.
That’s not to say never hire your APAC guy, but your first job must surely be to establish revenue streams, whether that’s direct or through partners. Then, and only then, there may be a case for having a regional hub with a VP APAC to marshal and grow your business.