Expert analysis by Marina Korobeinikova, Head of Business Development, New Markets Launch
Businesses work, businesses grow, they create new stories and products, generate revenues. At some point, every successful company or product reaches its limits on the domestic market; the growth plateaus, and this means it is time to look at other markets as the source of new growth – and new revenues. However, the road to market entry is paved with difficulties, doubts, and risks.
My name is Marina Korobeinikova, and I am a Business Development executive with more than 10 years of hands-on experience in leading business expansion into new markets. Throughout my career, I successfully launched tech and media products in such opportunity-rich regions as EMEA, LatAm, and APAC and negotiated favorable agreements with business giants like Samsung, Huawei, Microsoft, and Facebook. Today, I would like to share with you my expertise and some useful insights that, hopefully, will help you find your way on the path to alluring new markets.
In this article, we will discuss the challenges companies face expanding into new markets, and local partnerships as the solution to these challenges. We will see how businesses use the power of collaboration to boost product launches and pave the way for long-term success. We will look at a real-world case in which a synergetic collaboration helped the newcomer to make a successful entry, and its local partner to strengthen their position in the market. Finally, we will examine the best practices that will allow you to establish a productive and mutually beneficial partnership while minimizing the inevitable risks.
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The Many Challenges of New Markets
A new market entry holds undeniable potential in reaching untapped audiences and capitalizing on emerging economic opportunities – but it brings its set of challenges. Perhaps the most important one is the cultural differences that await businesses in new territories. Business customs and consumer behavior vary from region to region, demanding more than just tactical marketing; it takes a genuine understanding of the local specifics to build a marketing strategy that will allow you to connect with the consumer.
Another major factor to consider is regulatory requirements. Every country has regulatory bodies that issue specific rules for businesses, from product standards to advertising constraints. To succeed in a new market, newcomers must balance their business ambitions with compliance requirements.
And even with the local specifics taken into account and a team of hardened lawyers hired to tackle the legal challenges, there is a problem that any company, no matter how established globally, faces when venturing into new grounds – the hurdle of brand unfamiliarity. Building trust, understanding local preferences, and overcoming inherent skepticism demand significant time and resources.
And finally, a critical concern that has burned many a careless entrepreneur: new markets are rarely untouched. Local competitors, deeply rooted in the market’s history and traditions, and global contenders present in the market challenge a new entrant’s positioning.
So, how to deal with these issues?
The Strategic Advantage of Local Partnerships
One of the best approaches to tackling the challenges of a new market is forging strategic local partnerships. I have successfully employed this strategy in various geographies and verticals and recommend it to every business planning a global expansion. Granted, this is not a cure-all and may not suit every case, but if you have such an opportunity – seize it!
Local allies may bring to the table working market strategies and vital insights; they have existing customer trust and will act as credible brand ambassadors; and most importantly, there is a good chance they will be interested in finding a strategic partnership that would allow them to strengthen their position. After all, they are going through the same hurdle of competing against global mammoths like Google or Facebook as well as local competitors. Allying with a newcomer allows them to offer to the market new or superior products, improving their own market position.
And it is much easier for an expanding business to find a strategic partner on the local market than to ally itself with a global player like Google; for the giants, it is just another market they have to conquer, and they have enough resources to do that on their own.
Of course, any partnership introduces its own set of challenges. Aligning visions, ensuring transparent communication, and sharing control can test the strongest of alliances. However, in my experience, the rewards far outweigh the risks. With the right choice, the combined strength of global expertise and local fosters mutual growth and shared strengths.
Follow me to the next part, and I will give you an example from my personal experience that allowed Yandex to successfully launch a product on a new market.
Case Study: Yandex Zen’s Vietnam Entry
In recent years, Vietnam’s digital market has soared, driven by a youthful, tech-inclined populace and swift urbanization. By 2018, Internet Penetration in the country reached 70%, while the online media sector leaped to $2.2 billion from $600 million in 2015. International players flock to the rapidly growing market, while local entities, in turn, seek global partners to further elevate the nation’s digital horizon.
In 2019, I was leading the expansion of Yandex’s AI-driven personal recommendations platform Zen to the Vietnamese market. Yandex had to enter a completely new market with no prior exposure to the company’s products. Since awareness of the Yandex brand in the region was low, launching a content service in this market from scratch would have been extremely difficult. Besides that, Yandex.Zen is built on cutting-edge AI and a very cool technology stack, yet to produce solid results specifically for the Vietnamese market, we needed to understand the behavior of users there. And no amount of research would show a truly clear picture. The situation asked for finding a strategic partner who already had a substantial user base and a well-recognized brand that local users would trust.
I headed the search of the local market for a suitable partner and found one in Cốc Cốc, one of the country’s most popular web browsers. Serving nearly 24 million MAUs, Cốc Cốc successfully pushed against global giants like Google Chrome, but defending their positions was a difficult task for the local champion. The company was in need of a high-tech partner that would have helped them increase user retention, which in turn would have increased their advertising revenue. On the other hand, their deep-rooted understanding of the Vietnamese digital market and large user base made them the perfect collaborator for Yandex.
The companies joined efforts, integrating Yandex Zen’s personalized content feed into the browser. This collaboration brought a truly synergistic effect: Cốc Cốc received a ready-made tool that boosted the value of their product – a content feed that greatly increased their user retention; and Yandex got immediate access to a large audience, which allowed the company to successfully launch the product in a record time. Within six months, Cốc Cốc’s advertising revenue doubled while daily active users for the browser’s content feed jumped by 53% and average usage time increased by 10%; and over 23% of the browser’s desktop users regularly engaged with Yandex Zen.
The success of the Yandex Zen / Cốc Cốc collaboration underscores the immense potential of strategic local partnerships. How do you achieve such an impressive effect? I have some insights and tips for you in the following part.
Laying the Foundations for Successful Collaborations
Finding the right local partner is akin to solving a puzzle. First of all, it demands meticulous market research: you have to understand what you need to make a successful entry and which one of the possible allies is the best for you.
Here is a vital tip that will help you better understand your potential partner and lay the groundwork for lasting success: be sensitive to cultural differences. Understanding diverse communication styles and cultural subtleties is essential at every stage of negotiations. Respect local religious, societal, and business norms to avoid critical blunders that may jeopardize your entire project.
Another essential tip for your jar: after you have decided on a potential partner or partners, you have to understand what they need and what is important to them. I suggest reading news and media articles about them, carefully analyzing what KPIs or problems they wrote about, and how you can help them. This will help you sell them the idea of collaboration at your first contact.
Further, after you have identified and contacted your future partner and achieved preliminary agreements, the next step is negotiating the partnership terms. At this stage, it is absolutely necessary to clearly define the terms of the future partnership. Who manages what? How do you make final decisions? Who holds the Intellectual Property rights? These parameters, as well as all KPIs, deadlines, and expected results must be clearly stated in the agreement. This is especially important if the project has a commercial side.
Another critical element of a strategic partnership agreement is conflict resolution mechanisms. Implement an efficient system for resolving disputes, whether through mediation or periodic review meetings, and you will prevent minor issues from potentially escalating into serious problems.
To sum the above up, effective communication, especially in cross-border collaboration, mitigates potential misinterpretations. Establish clear channels of communication and feedback mechanisms, and you will preempt potential conflicts and lay a solid foundation for consistent alignment and growth.
In Conclusion: Embrace the Power of Strategic Partnership
On the way to global expansion, there’s a profound lesson to take from our exploration: partnership is power. Merging global strategy with local insights isn’t just smart business – it is a trademark of cultural respect and adaptability. While challenges are an integral part of these ventures, they pale in comparison to the rewards: trust, long-lasting impact, and profound market resonance.
So, as you stand on the precipice of your global ambitions, don’t merely seek to expand – seek to connect. Dive deep into local nuances, invest in understanding, and be ready to change. Let my advice become your blueprint, and remember, in today’s interconnected world, true growth lies in collaborative synergy. On your way to global presence chart your course not as a solitary entity, but in harmony with partners who can help turn your vision into a shared reality. Embrace the journey, and forge alliances that last!
