If you’re an OEM or selling physical products, this one’s for you (sorry, SaaS folks).
A global crisis can feel like a smart time to pull in and close down anything not central to a business’ operations.
But that might mean overlooking a golden opportunity. As the world is starting to reopen, there is likely room for your products in new markets, if you understand the complexities and risks.
At the heart of 2020’s changes is a realization that e-commerce is about more than buying household goods from Amazon. It’s a driving factor for how the world gets work done and where future sales potential lies. Your customers want to buy online more than ever, whether that’s for a $10 million system or a last-minute birthday present.
Expansion to new territories is never easy, but the coronavirus is providing a wakeup call for enterprises and established companies to start looking at how customers say they prefer you to sell to them. Determining if the time is ripe relies on answers to a few fundamental questions.
Are New Opportunities More Receptive to Your Now-Digital Push?
Expanding internationally always requires significant investment and research. Your efforts before a global crisis can be especially helpful at the time by showing you what the market may return to, or beneficial areas relative to the crisis itself. Unfortunately, the opposite is true. Markets most negatively impacted by the black swan event could no longer be viable if the crisis inhibits stability.
The US market during COVID-19 is one such market where global expansion, and the need for some local workforce or partners, is both a risk and opportunity. In 2020, US consumers spent nearly $710 billion on e-commerce, a year-over-year increase of 18%.
While that can feel like a B2C trend, your B2B shoppers and targets are doing much the same thing. McKinsey notes that B2B decision-makers are pushing to e-commerce and e-commerce-like sales cycles, and up to 80% prefer either digital self-service tools or to contact teams remotely. As they move further down your sales funnel and process, these preferences grow.
The digital push has changed many markets, bringing some in-line with the sales channels you can make available to them. According to that same data, Brazil has grown significantly more receptive to digital sales techniques and may now require a greatly reduced local, physical presence compared to 2019.
Now that we’re in 2021, you’ve got data from at least three quarters of the COVID era. Analyze your specific sales and market, then look across the globe. Match your expansion goals with regions that are performing well generally as well as those more receptive to a new digital push. Keep an eye on the B2C trends that are driving many B2B market shifts.
As a final note here, don’t neglect world events outside of the pandemic. Brexit, for instance, is creating a major headache for freight forwarders and companies in Europe because of confusion and new requirements as UK goods move to the continent. Delays there will further compound any pandemic issues you’re still facing.
Can You Meet Regulatory Opportunities and Advantages?
One surprising expansion note is that it can sometimes become more accessible for companies to do their prep work, in terms of paperwork and regulatory compliance, with new countries during and shortly after a time of crisis. Economies looking to regain strength often wave, postpone, and adjust paperwork requirements. Some offer incentives for practices that can also be cheaper for you, such as filing information electronically.
The TMF Group, which provides compliance and global expansion administration services, says COVID-19 created incentives and benefits for companies that could file paperwork electronically as nations and new markets quickly adopted digital processes.
You may also have implemented new technologies and capabilities during 2020. Anything from a cloud warehouse or transportation management tool to traditional ERPs and digital document capture may make it easier for you to meet regulatory requirements in new markets. Or using live video for sales activities, which is being tied to an increase in sales rep activity and customer company engagement since COVID-19, can encourage inter-department communications and streamline how you prepare for new regulations or required risk-mitigation efforts.
The digital push that occurred as many offices and leaders went remote often included digitization of records, receipts, payments, and more. If you’ve made any digital moves in the area of transportation, insurance, or financing documentation, there’s a chance you also minimized barriers to entry. Plus, these changes make you a stronger partner for carriers and 3PLs if you’re looking to go global.
International expansion can potentially be simplified and more beneficial if your potential market is making such a shift, and if you’re prepared to meet its regulatory changes.
Can Your Expansion Be Simplified?
A time of crisis can create opportunities if your business matches the changes experienced on a local level. Significant health crises like pandemics change the way decision-makers interact during and after the event.
In recent memory, we’ve seen the shift come with a surge in technological adoption, such as increased online purchases and the digitization of traditional sales catalogs even in areas like heavy industry, not just the more obvious reliance on video conferencing.
Cross-border commerce has been simplified, and the rise in remote work has expanded opportunities for people as well as products.
If your business has the funds to expand, explore how they can be used. Securing e-commerce partners with bulk freight orders and shipments may enable you to secure warehouse space and logistics support because of your ability to pay ahead of a move. You may be able to secure local talent and expertise at reduced rates if there is high unemployment in regions you’re considering. Or if your country is performing well, there could be a rise in expats that would allow you to find market insights with local staff.
It may no longer be necessary for a B2B outfit to secure a physical presence in every new market or country. Partnering with distributors and outsourcing regional fulfillment may be simpler than before thanks to all of the other steps you’ve taken to deal with the ongoing crisis. Business process outsourcing opportunities are scaling, allowing your customers to experience working with your brand while the behind-the-scenes service comes from local partners.
The future of this space is digital and streamlined. The efforts enterprises and large companies undertook as internal responses to COVID-19 are preparing them for this future. From go-to-market strategies and commercial expansions, pandemic-related changes are expected to become permanent.
COVID-19 Lessons Will Serve You Well
Large-scale black swan events can seemingly derail most economic plans for companies, especially in terms of international expansion. However, those fears are not necessarily well-founded. According to one study on such expansion during COVID-19, most businesses maintained their pre-crisis planning or delayed efforts by less than one year.
Expansion is often a protracted process, and the full range of services and partners that support it can create a competitive market for your business. E-commerce retailers and marketplaces benefited from growing their supplier base during the pandemic. In the same way, sellers looking to expand would benefit from creating partners and redundancies in the business side of their expansion.
The planning you likely did for COVID-19, such as adopting policies for remote workers and relying more on digital services, can help you define a culture suited to international growth and new opportunities. What your business did to protect itself locally in a recent crisis can be a healthy guide in how to prepare expansion plans, in good times or bad.
Among the most important issues, ahead of sales and product, is how well you can treat and thank your team. The companies succeeding in this unprecedented time are those with a strong foundation of people who were flexible and proactive enough to keep the doors open and the lights on each day.
Thank them, and thank your supply chain partners, too. It’s the best advice for understanding and valuing the relationships you’ll need for any international growth.