Breaking into new markets can be a tricky business – but it can also be a hugely rewarding when you get it right. Asia is a diverse market and boasts impressive growth. In essence, it is made up of fifty countries, categorised as five major markets – namely China, the Indian Subcontinent, ASEAN countries, the Middle-east (GCC) and East Asia. From China, where the UK already has a good image for trade and education relationships, to India, whose population is almost equal to that of China but whose GDP growth rate – of over 7.5% – is nearly double, Asia’s major markets hold exciting potential for British businesses. There is increasing demand for British products in the region and exporting there is becoming easier – there’s never been a better time to consider exporting there.
So here are our top five tips for taking the market by storm:
- Be targeted
Be very clear about where in Asia there is a market for your product. Heavy industrial products are valued across emerging markets in Asia like India, China, Thailand and Cambodia, where huge infrastructure construction is needed and where the country’s own heavy industry manufacturing is relatively weak. Energy products, ranging from traditional fossil industry to all types of renewable energy equipment, are very competitive in ASEAN countries. Luxury goods are, as ever, popular in GCC countries and Japan. The demand for convenient, well-packed food products has spiked in recent years. The appetite for traditional UK beverages like whisky and gin has reached a whole new level in countries like China and India.
- Cash is king
Asian markets require a cash intensive structure. Make sure you have plenty of reserve cash to deal in those markets. It’s also worth noting that the average credit period and default rates for importers/distributors on payment of goods varies from country to country. Securing your transactions using trade credit insurance is a good investment for trading successfully in Asian markets.
- Be prepared
Neither the law nor the level of protection you can expect for your intellectual property is constant across Asia. In a few countries it can take up to four years to simply register a trademark. However, other countries are infamous for intellectual property theft and extortion. There is a real lack of control over counterfeit products and this is a reason for worry amongst old and new, big and small brands alike. Asia does not operate like a single market but, due to the rise of digital technology, new products and news of new products easily reaches neighbouring countries, thereby inviting trouble from a market you may plan to penetrate a few years later.
- Find the perfect partner
Markets in Asia have a tendency to favour their own national companies over foreign companies – so it might be an idea to partner up with an Asian company.
Make sure you carry out thorough background research and provide clear and enforceable paperwork and responsibilities before you sign up. The methods of conducting business in Asia are very different, so it’s important to be as clear as possible before you decide to become business partners.
- Tax beware
Every country in Asia has their own unique tax structure and method of payment. It’s a good idea to consult a tax professional to properly calculate all the taxes applicable to your product and the revenue that would be generated by its sale. Many Asian countries impose very strict penalties on tax-related crimes – even if their crime was an honest mistake.
If you’re interested in exporting your products to Asia and would like to find out more about how Tails Trading could help, please do feel free to drop us an email (firstname.lastname@example.org) or call us on 0203 709 5280.