Expanding markets for your products is the goal of any serious business. The ambitious may have considered or are working on the idea of expanding beyond our borders. There are many forms this can take and how you pursue will depend on your goals and capabilities. Let’s take a look at some of the methods of expansion that are available. We’ll later examine the resources that are available to make this possible.
Online direct selling
Depending on your type of product there is an opportunity to sell it online directly to customers. This works well for various products. The barriers to entry are fairly low and it does have the advantage of getting straight to the point. Online retailer wish.com made great success using only Facebook advertising. Businesses that offer services or skills are especially able to take advantage of this method.
Registration for an export permit may be required for your business. The online infrastructure has become easier to handle with services like Etsy.com and Shopify. Tariffs such as import duty may apply to your customers in order for them to receive their goods. So this may add to cost and make your products less attractive.
Distribution as a business model is a big business. Another way you could expand abroad is to engage the services of a distributor. This company would be based in the target country and have good industry knowledge and the ability to leverage both wholesalers and retailers. The biggest advantage of engaging a distributor is their knowledge of the market.
Initially distributors may want to test the product and the market’s reaction to products. Some cases distributors may bear the risk or the risk would be shared between the parties. The downside of this may be a drawn out process.
Partnerships, Joint Ventures and Collaborative structures
Partnerships, joint ventures and other collaboration structures are another widely used method of expansion. These involve the coming together of businesses in different countries to create a common business to exploit a particular opportunity. DSTv parent Mutichoice is a good example of this. They partner with local business to create a Multichoice unit in the countries they operate.
A partnership is an equity ownership based concern between two or more parties. Liability can be limited. Partnerships are less highly regulated and scrutinized. This means they are much easier to put in place and get running.
Joint ventures are collaborations that are created with a finite time horizon to deliver a particular objective. Joint ventures do not involve equity sharing and are more inclined towards sharing of ideas and innovation.
Creating subsidiaries and sharing equity as in the Multichoice case is another collaborative method. It allows access to markets for the foreign party who usually has a product or intellectual property. Zimbabwe until recently had a contested law that mandated that any such companies must have 51% of the ownership be local citizens. It is not unheard of have similar laws in other countries. These deals may also be scrutinized and that means regulation and a longer process to operation.
Having talked about the different collaborative structures let’s talk about how we can find these partners or opportunities.
Trade fairs and expos
This one may seem a bit obvious but attending industry expos and fairs. Either attending your local one as an exhibitor or attending foreign ones as a guest. This provides networking opportunities with people in your industry or relevant industries to you. The opportunities are not automatic of course but networking is an essential first step.
ZimTrade and trade missions
Countries operate trade missions that are created to foster trade opportunities. Trade missions offer connection portals to other parties who are interested in working with people from our country and even in our industry. Our local trade organization, ZimTrade also lobbies government on behalf of exporters. Their website is a hub of exporter resources. The ZimTrade website also caters to people outside the country who are looking for products in Zimbabwe.
For businesses which are closely related to arts or cultural activities embassy sponsored cultural exchange programs may be a viable avenue to pursue. These are dedicated to culture sharing between two countries and provide links with interested parties.
It is important to always consider your product and that all information may not apply to your product or business. Expansion is a big adventure and must be taken on with proper planning and relevant advice. Governments have bilateral agreements in place to assist parties in their countries who want to work together .There are opportunities for those who seek to expand outside of the country but relevant information for intended markets is fundamental. Are you interested in exporting or expanding to foreign markets?