Building a global presence is imperative for a business’s success. Expanding beyond the confines of a single country—whether physically, virtually, or both—allows for new customers, networking opportunities, marketing strategies, endless connections, and ultimately, skyrocketing sales.
For Shopify-powered brands, scaling across borders offers access to diverse audiences, new revenue streams, and strategic partnerships.
But where do you start?
Understanding the types of international expansion strategies and how to master them can be tricky, but follow along in this article to learn more about how to grow globally.
Why Should Brands Consider Global Expansion?
Expanding globally can be daunting and yet there are countless benefits to taking this rather risky step:
- Increased revenue opportunities: Expanding beyond your domestic market allows you to tap into a larger customer base, increasing potential sales, support avenues, and revenue.
- Brand recognition: A global presence enhances brand credibility and positions you as an industry leader, driving trust and loyalty.
- Diversified customer base: Operating in multiple markets reduces dependence on a single economy, providing more stability.
- Access to new talent: It also opens doors to diverse talent pools, strengthening your team with unique skills and perspectives.
- Innovation and learning: Engaging with new cultures, customer needs, and trends fosters innovation, driving your brand’s evolution and staying competitive.
Strategies for International Market Entry
Entering the international market can be done in various ways that cater to different demands and capabilities. Understanding how to satisfy and cater to different business and customer needs can help you better assimilate in new markets.
1. Understanding the International Market
The first step is to research and analyze your target markets. This typically includes:
- Understanding market demand: Identify if there’s demand for your product in the target region by analyzing competitors, demographics, customer needs, and buying behaviors. Local market research can help with this process to know what the next steps look like. What is trending in these spheres at the moment? What have competing companies been successful in? Is there an element that’s missing that your company can provide? Find answers to these questions and let them guide your plan.
- Assessing cultural and political nuances: Investigate cultural preferences, language nuances, and shopping habits. Adapting your approach based on local culture can make your brand more appealing. Additionally, educate yourself on the political climate within your target countries and even the ones surrounding it.
- Regulatory and economic landscape: Different countries have distinct regulations, compliances, taxes, and import restrictions. For example, local regulations may impact how you advertise or package your product. Researching these factors thoroughly ensures a smoother entry process and helps you identify any necessary adjustments for the market.
2. Choosing the Right Market Entry Strategy
For every unique business, there is a different international expansion strategy that suits its needs. These types of strategies can vary in effectiveness depending on budget, time, networking capabilities, etc.
- Direct exporting: This low-risk approach allows you to sell directly to consumers in a foreign market. You can test demand with minimal commitment, using local fulfillment partners if necessary. How successful is your export strategy in this area? Does your export strategy generate enough revenue? If so, this may be the global expansion technique for your company.
- Licensing and franchising: Licensing lets another company use your brand and products in exchange for royalties. This is ideal for brands with strong intellectual property that want to expand without extensive operational control. For instance, a multinational business may hire a local team in a separate country to use its intellectual property, including licensing, trademarks, or patents. This is an optimal strategy for businesses that have a market for their product in one place and the means to produce such in another.
- Joint ventures and partnerships: Partnering with a local company helps you gain insights, navigate regulations, and establish brand credibility quickly. Joint ventures share risks and rewards and can create a strong local presence.
- Establishing subsidiaries: Foreign direct investment (FDI) is an ownership stake in a foreign company or project made by an investor, company, or government from another country. For brands with sufficient resources, establishing a subsidiary offers full control over operations in a foreign market, but it requires significant investment and commitment.
3. Adapting Operations for International Markets
From product design to marketing and support, you may need to make localization and customization changes when expanding to a new country. This can range from a simple phrase translation to a change in ingredients to meet government regulations.
Common ways to localize and market your business in new markets include:
- Redesign product and feature names to meet local expectations.
- Leverage marketing strategies like local SEO, local ads, and content marketing so your website appears in local search engines.
- Adjust your advertising and content to reflect local culture, languages, and social norms.
- Use popular local platforms, influencers, and ad networks to reach your target audience effectively.
- Consider local holidays, events, and cultural milestones for special promotions.
- Set up local phone numbers or toll-free numbers in your target regions so customers feel more comfortable contacting your business.
- Provide global customer support in local time zones and languages.
- Ensure that you support local currencies and popular payment methods, such as PayPal, AliPay, or specific credit card types.
4. Complying with Local Regulations
Following regulations and standards in place is mandatory to operate business, however, being open and honest about your compliance can also attract customers. Especially when a company is just starting to make an appearance in a new location, potential buyers are looking for a trustworthy company to provide for them. This compliance establishes a sense of responsibility and reliability.
Maintaining protections for intellectual property such as copyrights, trademarks, and designs is important. Many countries, including those in the EU, have strict data privacy regulations (e.g., GDPR). Adhering to these laws ensures customer trust and avoids penalties. When looking to expand your business, be sure that your rights are enforced in all locations before mistakenly setting up a new branch in a place where they may not be.
You might consider consulting local legal experts to understand employment contracts, intellectual property laws, and tax obligations.
5. Growing Your Cultural Awareness
Expanding globally includes creating a healthy atmosphere for communication. After opening the doors to new destinations and interacting with new demographics, it is important to be aware of the climates you are now immersed in.
Something many fail to consider when pioneering a new market — and looking to increase revenue — is the human aspect to migrating into a new country: the culture. Teaching not only yourself, but your entire team, the cultural norms and common behaviors is important when assimilating.
This sensitivity training translates into positive customer experiences and makes newly onboarded local talent feel welcomed. This healthy bond opens the lines for clear and comfortable communication from both ends. This also gives your company an edge over competitors who fail to acknowledge this, especially when starting fresh and making a first impression.
6. Building Relationships with Local Partners and Stakeholders
Understanding the importance of local networks is an important factor. Consider hiring and working with local influencers or key opinion leaders (KOLs) to help you navigate the foreign market and learn the ropes. This is especially helpful if there is a language barrier between you and your target audience.
Along with this, you can consider partnering with already established local businesses to promote your products and services alongside one another. You can each provide benefits and solidarity between your companies and create a network. When choosing which companies to partner with, consider the following: Is this a trustworthy company I want to share my business name with? What benefits may come from this partnership? Is this a long-term networking opportunity or a short-term business exchange?
After ensuring your partnerships are worthwhile, sustaining them long-term will provide stability, advice, and protection for your company.
7. Overcoming Challenges and Mitigating Risks
Global expansion comes with risks, but proactive management can mitigate them:
- Language barriers: Are translators necessary? Do you need to hire staff that can also understand different dialects, nuances, and slang to help you better assimilate?
- Political and economic instability: Monitor local news and economic forecasts. A sudden political change or economic downturn can impact operations, so it’s vital to have contingency plans.
- Tax regulations: Stay up to date on how the foreign country regulates its taxes, protects data, manages contract obligations, manages intellectual property, and enforces employment laws.
- Supply chain adaptation: International logistics can be complex. Partner with reliable local distributors and maintain open communication channels for smooth operations.
- Foreign exchange management: Currency fluctuations affect profitability. Work with financial experts to manage currency risks and stabilize cash flow.
8. Leveraging Technology and Digital Platforms
Modern technology enables brands to scale globally with ease, whether you’re trying to communicate cost-effectively or ensure sign-ups go through. Here are key digital tools to consider:
E-commerce platforms with global support: Shopify and similar platforms offer features like multi-currency support, international shipping integration, and localized content management.
Payment gateways with multi-currency support: Offer payment methods that cater to local preferences, reducing cart abandonment rates and increasing conversions.
AI and data analytics: Utilize AI-driven analytics to understand customer behavior, optimize marketing strategies, and improve inventory planning for each market.
Centralize global communications: Cloud telephony services like virtual phone numbers and CRM integrations can provide in-depth insights into customer interactions, helping brands provide responsive support, no matter where their teams are located.
Take Your Business to the Global Stage
International expansion offers limitless possibilities for growth, but it requires careful planning, cultural understanding, and technological support. Taking a thoughtful and proactive approach to global expansion helps brands maximize profitability and establish meaningful relationships with international customers. Start with small, data-driven steps and build a scalable strategy to make your mark on the global stage.
