Top Tips for doing Business in Asia in 2020 and beyond

Top Tips for doing Business in Asia in 2020 and beyond

By Siddharth Shankar

Asia is an increasingly important market for British business. It’s predicted that its share of global GDP will increase to 35% by 2030 – which is equivalent to Europe and the United States’ share combined. Furthermore, it’s estimated that by the end of the next decade seven of the world’s top ten economies are likely to be in Asia.

British businesses are already benefitting from the growing market for British goods in the region. Last year was a record-breaking year for British exports. UK firms sold more goods overseas in the 2018/2019 financial year than at any other time since records began – worth a total of £639.9 billion. This was in part helped by a significant uplift in exports to Asia.

Exports to Taiwan increased by 40% in the last financial year, to India by 19% and to Thailand by 17%. Nowhere is the demand for UK exports growing faster than in Asian countries.

However, doing business there can be a daunting prospect due to the cultural and language barriers to surmount and distances involved. Here are some top tips to help smooth the way.

• Don’t treat Asia as one homogenous market

Asia is made up of fifty different countries, categorised as five major markets – namely China, the Indian Subcontinent, ASEAN countries, the Middle-east (GCC) and East Asia.

Each has it’s own very specific cultures and customs, demands, risks and legal systems. Never make the mistake of treating the region as one homogenous market. This has led to many a business coming unstuck. For example if you’re launching a product in China, Western branding is appealing but in India, Western products must be given an ‘Indian touch’ to be successful – making it generally easier to launch a product in China than in India.

• Location is paramount

Many businesses, when exporting to Asia for the first time, make the mistake of automatically launching a product in the capital city. Be warned, this is not always the best policy. Pick the city you launch in carefully, based on thorough research, no assumptions.

For instance, if launching a fashion brand in India it may be prudent not to launch in a city that is politically sensitive or more traditional in its customs. Instead, pick a more commercial, modern city that is likely to be more open to a Western brand.

• Local knowledge is essential

Without in-depth knowledge of local customs and traditions it can be very easy to make cultural mistakes. Even the smallest details in a product can make the difference between success and failure.

Take hats, for example. You might have huge success selling a blue baseball hat in China, but try and sell a green version and it will likely end in failure. Why? Because in Chinese folklore, if a man wears a green hat it means his wife is cheating on him – never a good look! Make sure you enlist a strong, trustworthy team on the ground to avoid making simple mistakes.

• Know what’s on trend

It’s crucial to do your research into the emerging trends in the region before you embark on a costly launch. These are the products tipped to be in high demand next:

• Pharmaceutical-related skin care products and make-up brands that are good for your skin
• Beer is already huge in Asia but wine, gin and rum are set to be hot on its heels – especially amongst the younger generations
• Home appliances are an area Asian households are spending a greater chunk of their budget on – the newer, fancier and more efficient the design the better
• Asian consumers are increasingly on the look our for healthier, conveniently packaged foods, offering greater nutritional benefits.

• Don’t be blinkered by China

China holds huge potential for British products but if businesses direct all their focus on China they miss out on the myriad opportunities across the rest of Asia. India, Taiwan and Thailand are the fastest-growing markets for British goods in Asia and offer increasingly lucrative opportunities for growth.

Siddharth Shankar is a leading expert in trading with Asia and CEO of Tails Trading, an innovative new solution helping UK SMEs to export their goods to Asia. Visit www.tailstrading.com to find out more.

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