Leveraging on technology and “virtual market entry” potential
Guest writer, Bolaji Sofoluwe imagines a market landscape that just got a little bit more real for a lot of people…
Let’s start by stating the obvious: these are unusual times! COVID-19 has shown us how fragile the world is to invisible, unpredictable factors that no amount of strategic planning can predict. It has thrown rock-solid supply chains of balance and they have challenged the way we see and interpret global trade and the merits of expanding into new markets.
In the world of global business, deciding how to enter a market can be one of the most complex strategy decisions organisations can make. Selling online to international markets is a valid strategy, but very different from deliberate market entry. Most online customers will stumble on your products through digital promotions or other marketing strategies that you have employed, whilst some of them may hear about your product or service through the friends and family of your customers.
The traditional market entry models have been developed for good reason. Variations in local regulatory policies, logistics arrangements and representation in crucial markets, leads customers to use methods such as licensing, distributors, joint ventures, acquisitions and direct selling through local, online platforms or selling directly through the website. Quite often, business leaders are reactive in their market entry strategy when they’ve noticed an increased demand from certain geographical centres, whilst others rely on market research and planning, to decide where to target their focus.
Virtual market entry by definition, is a means to enter a new commercial territory with limited local structures.
This is different from e-commerce or participating in virtual marketplaces. Virtual market entry, by nature, is deliberate. Setting up the necessary infrastructure to sell effectively and efficiently in a chosen market, is extremely important to this market entry model. Search engine optimisation and ‘globalising’ the website to promote e-commerce is only part of your virtual entry strategy. In addition to creating a product or service that can be sold internationally, you will need to consider the following:
- Is my product/service legally compliant in my target market? Do I need to get local certifications in order to sell in that market? Bearing in mind that you are ultimately responsible for your product or service in whichever market it is sold.
- Is the pricing right? Can I be competitive in a specific territory or am I happy to sell to a restricted target group?
- Are there local/cultural nuances that I need to be aware of, which could improve my chances of scaling up in that market? Will I need a local marketing/sales strategy?
- Can cost effective logistics solutions be put in place for the efficient delivery of products which would benefit both company and customers?
Considering these elements of your entry strategy will change the way you execute your current e-commerce strategy. You can seek help from an export specialist, to help you navigate this market entry model. This kind of thinking is needed now, with uncertain economic times ahead. It is, however, certain, that diversification of markets may be essential for business continuity.
About our guest author:
With sixteen years of expertise and experience in Africa and the UK, Bolaji has a proven track record of strategically positioning businesses—from start-ups to established corporates—to thrive within complex African markets. Her focus has been helping these companies overcome the challenges of the unique business landscape of the continent; achieving scale while developing mutually beneficial relationships.
To learn more about approaching new markets, get in touch.