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International Expansion: debunking the myths

By Lindsay Hong, Head of Locaria

March 21, 2016 | 6 min read

The internet means that overseas markets and their opportunities are just a click away for most brands. However in recent years there have been many examples of companies who despite significant investment have either failed to impact overseas markets or chosen to exit.

Lindsay Hong is head of Locaria, an affiliate agency of Forward3D.

Lindsay Hong is head of Locaria, an affiliate agency of Forward3D.

This blog, the first of a two-part series from Foward3D, aims to debunk five popular myths relating to international expansion:

Myth 1: Big is best

When deciding which new markets to target first, it is common for companies to look at information such as population, GDP per capita, sector value etc. to help decide where to invest. However there is truth to the old cliché that size isn’t everything.

In APAC, China offers a huge consumer market, but as a consequence it is hotly contested by both international and local competitors, so achieving brand awareness can be an expensive business. The Chinese consumer also requires a highly localised experience both off-site through Chinese search and social media platforms, and on-site through bespoke payment and shipping options. By comparison a market such as Korea offers less competition, high internet penetration and familiarity with international payment methods.

In Europe, France and Germany often top of the list for expansion, due to their large populations. Norway by comparison is a much smaller market, with a population of just over 5 million. However it is less competitive, with a large number of affluent, English-speaking consumers who enjoy a very similar online experience to the rest of Western Europe and the US, where Google, Facebook and Twitter dominate. It can be relatively easy to make returns in this market without huge up-front investment.

Myth 2: Everybody knows us

Many brands are alerted to the opportunities in foreign markets as they begin to see overseas orders or enquiries occurring organically. It makes absolute sense to take as many learnings from existing activity as possible, but always keep in mind the statistical significance of any data you may have, if it is based on a small sample.

For example, European luxury retailers will likely already have traffic and revenue coming from Japan. However this does not mean that they have enough brand awareness to allow them to scale there. Japan is a key market for luxury and heritage goods, and as such it can be hard to get your brand message heard without supporting activity such as display advertising or content marketing.

Myth 3: Translate everything

Poor content can be a huge barrier to engagement and conversion. This is equally true in foreign languages - the quality of your foreign language content has a major impact on performance. Many marketing leaders were keen to ensure an optimal on-site experience and so committed to translating their entire website into the target market language, setting up and maintaining a process to translate thousands of new products every season. Such intensive up-front investment inevitably puts a huge amount of pressure on the new markets to perform immediately.

In truth, you don’t need to localise your entire site to enter all markets successfully. Several markets have a significant number of consumers who are comfortable transacting in English. All markets will show improvement once a website is localised, but not to the same extent. Where you do need to localise, do it strategically. A single landing page in the local language welcoming the customer, sharing some simple information about the brand and providing contact details can be enough to inspire confidence and support conversion. Likewise, if you decide to invest further into a market, start by localising key pages that may otherwise present a barrier to conversion such as shipping terms, payment pages, site navigation. Then pick your top products/ services and go from there.

Myth 4: Translate nothing

It is true that some markets have good levels of English, or share languages or cultural norms with other countries. This can mean that brands can already grow in some markets without localizing their site. However this thinking cannot be applied to online advertising content.

Even in countries where English is widely spoken, users rarely search in English, as apart from it not being a natural reflex, it can be irritating to have to change language settings on their device. Creating quality local language content is as important as having excellent analytics backing up your marketing spend. However localisation spend need not be a bottomless pit of expense. The key is to keep localisation focused on the channels that drive performance.

Myth 5: The social channel should only be used once fully committed to a market

In APAC, group consensus is often sought through social media before a purchase decision can be made. In Russia and the Middle East the ability to publicly display your purchases is an important cultural need which is being digitally satisfied through social channels. Failing to support social activity with localized content in these markets allows others (often with fake profiles in local language) to control your brand message and neglects a key part of the demand funnel.

Obviously brands want to make sure they can provide ongoing management of any social profiles they establish, and do not want to take this step too early in their new market expansion. However many social platforms provide biddable advertising products which can help support brand awareness and other paid activity without a huge commitment to ongoing content creation.

In my next blog on the subject of overseas expansion, I’ll outline a framework for selecting, testing and growing internationally, which helps build the case for investment in iterative steps.

Lindsay Hong is head of Locaria, the affiliated international and performance linguistics agency of independent digital marketing agency Forward3D. The agency has released a whitepaper on this subject, Going Global, which can be downloaded for free here.


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