For companies to thrive in a competitive market, exploring new sales channels and expanding their customer base is essential. When they feel that they can no longer get any more out of their domestic market, expanding to new markets is the right path for them.

A demanding process that bears fruit

Companies expand for several reasons:

• Growth in sales and profit 
• Expansion of the customer base
• Building a brand and raising awareness
• An opportunity for innovation

Without expansion, companies risk stagnation and decline due to insufficient market demand, a lack of flexibility or competitive pressures.

With expansion, companies obtain new sources of revenue and increase their share of the global market.

OpiTip: When planning your expansion, you might be interested in our blogs on expansion, where we go into detail about entering different foreign markets.

How to choose the right country?

Identifying the current state of the market in which the e-shop wants to operate is a key step for its successful management and future growth. A comprehensive analysis includes several important aspects that help create an overall picture of the situation and identify opportunities for improvement.

“First of all, it is important to determine two things: 

1. What works for e-shops in individual markets: An analysis of the success of competing e-shops in individual markets with regard to suitable distribution channels and their customer profiles.
2. Determining the criteria for differentiating markets: 

• Analysis of general demand: Identify the demand for products/services based on search volume or marketplaces. Or simply look at emerging players in a given market and find out how they are doing.
• Size of the public: Analyse the size of the target group to obtain more detailed information about its scope and characteristics.
• PPC advertising costs: Analysing the costs of online marketing campaigns using PPC advertising provide you with information about the effectiveness and return on investment in individual markets.
• Geographic localisation (offline analysis): Identify regional economic trends and specifics, as well as geographical restrictions on trading and distributing goods and services; this is valuable information that will help you better understand the local economy and its dynamics.
• Political and regulatory factors: An analysis of political and regulatory factors, which includes monitoring legislative changes and political decisions, will help you anticipate potential changes, allowing you to adjust strategies and operations to minimise risks.
• Macroeconomic indicators: Don’t forget to analyse macroeconomic indicators, such as GDP growth, inflation, unemployment and interest rates. You will better understand the broader context and improve your ability to respond to external factors affecting your business.”

OpiTip: If your business is declining or stagnating, it is advisable to consider opening a new market. Based on this step, expansion could reduce the risk of further decline or stagnation of the company’s performance. If you do not dare to expand on your own, using external help is a proven step. At Makes you Local they will help you do everything needed to be successful in international waters.

What do you need to ensure before entering a new market?

“It is important to remember that success depends on the specifics of the company and its owner. Based on the initial analysis, our consultants are capable of predicting the results that we could achieve in a given market.

If we were to focus on achieving zero EBITDA, I would recommend a more aggressive approach to the market and a faster launch of business activities. It is advisable to set objectives aimed at increasing turnover rather than achieving profit. Once we gradually establish ourselves in the market, we the redirect our goals to the profitable side.”

When entering a new market, it is necessary to ensure several basic matters: 

1. Legal and administrative requirements – Each country has its own requirements for doing business and operating an e-shop. For example, nutritional supplements may fall under different regulations and standards in different countries. Failure to satisfy these requirements can lead to legal problems, fines or even a ban on operating. Don’t forget to protect your brand with a trademark, which is absolutely necessary when exporting.
2. Payment gateways – When providing services or selling goods online, it is crucial to have payment gateways that are already popular and trusted in the target market. This makes it easier and more convenient for customers to make payments. Different countries may have different legislative requirements in regard to payment gateways, and these also affect the choice of the right payment gateway.
3. Communication channels – Each country has its own preferences and customs when it comes to communication and obtaining information. Knowing these differences allows companies to adapt their communication strategy to effectively achieve the desired goals. Also, don't be afraid to use local influencers, who have already built trust with customers.
4. Marketplaces –These platforms offer companies access to a wide range of clientele without high marketing costs. In addition, marketplaces offer complete sales management tools, including the ordering process and customer support, which simplifies the processes associated with sales.
5. Competition –You’ll find out a lot of useful information directly from your competitors. When analysing the competition, it’s important to monitor which products are preferred and have the best response with customers. Customer reviews can also tell you a lot. Thanks to reviews, you’ll get a clear overview of what customers prefer or, conversely, what hinders or even discourages them from buying. 

OpiTip: AIf you don’t know how to effectively use marketplace data to identify product demand, don’t hesitate to contact us contact us. Our consultants will help you with data analysis and processing.

“When exporting, it’s necessary to localise as much as possible. Customers from different countries prefer information in their native language, including support for payment gateways. These steps will help you guarantee a comprehensive solution for buyers.”

Don’t forget about collecting data

Export analysis will never be completely accurate, but with the help of established criteria, it becomes possible to calculate a result that allows comparing markets and prioritising them.

When collecting all relevant criteria, try to identify important factors and then compare individual countries. This process depends on the data available, whether it is information from Facebook, Google, general data or data from different marketplaces. When deciding on export goals and strategies, it is important to take several factors into account, including the availability of logistical solutions such as delivery speed. 

With the quantitative analysis of a market, you can identify customer preferences and needs, which allows you to optimise and prioritise your products. It is also important to focus attention on an analysis of the competition, where you focus on the best-selling products. This information will provide you with valuable insights into market trends and help us adapt to customer needs efficiently and competitively.

A qualitative analysis is also a key aspect, where we focus on how competing players are performing in a given market. Monitoring their performance and successes will provide you with important insights into market dynamics and the potential benefits or risks associated with entering a given market.

And what about the brand?

A decision to expand is often associated with rebranding. This requires careful consideration.

Think about the brand from the very beginning – also because of the trademark.

Check that your proposed brand is in harmony with local customs and regulations. For example, if you have a brand that has a certain meaning in Slovak, this may create problems in other countries.

Carefully review each brand name you propose:

• What does the proposed word mean abroad?
• Does the new brand have a negative connotation abroad?
• Did you check the availability of free domains in all countries where you are expanding?

What are the current trends in expanding into a new market?

Don’t worry about suppliers

It is important to rid yourself of fears about using suppliers and openly embrace the possibility of working with local suppliers. This will eliminate the complex and expensive logistics operations associated with international transport and customs processes, ensuring faster and more reliable delivery of goods to customers.

Investment injection

If you need to take a new step, but you don’t have the financial means, be aware that investment money is currently a big trend. Think about what your goals are, however.

If you are striving to build a large company worth tens of millions, financing through loans can be difficult.

Investment financing may be a better option in this case, because it offers greater flexibility. Investors often bring not only financial resources, but also their experience, contacts and know-how, which can only help you.

Enter a new market with confidence 

If you are considering whether to launch in multiple markets at once but don’t know where to start, our consultants have experience with such important steps. Contact us and together we will look at the best path for you to set off on.