Opportunities in Asia: 5 tips for crossing the Pacific

U.S. companies looking to expand into Asia are quickly dazzled by the booming economy, massive population, mobile adoption, and growing middle class that make it an alluring prospect for any tech-based business.

The mere prospect of accessing this vital market is very exciting. The region is a hotbed of innovation and cutting-edge technology, enabling American companies to tap into this fast-growing infrastructure, large new pool of consumers, investors and high-growth companies.

While expanding into Asia could make strong financial and strategic sense, a number of challenges make it much more difficult than jumping “The Pond” to Europe, for example. Pursuing opportunities in Asia takes careful and precise planning, established partnerships on the ground, and a clear understanding of cultural nuances. Here are five key considerations for any company that’s considering making the leap.

Tip #1: Wait until you are ready to fully commit.

The question of “when” is always one of the most often-asked, but most difficult to answer because the answer varies greatly from one company to another. It’s safe to say that no company should ever extend into any Asian market unless they’re ready to deal with the entirety of the commitment. Working in overseas markets takes a lot of time and nurturing, and if you lack the bandwidth and resources, it might be better to wait.

Just like building a campfire, it’s best to start with something you can more easily influence, like thin twigs, before you throw in a giant log. Once the kindling is ignited, you’ll be in a safer position to move forward.

For example, when digital video ad network YuMe first emerged in 2007, the company quickly drew the attention of several carrier partners in Asia. However, realizing they just weren’t quite ready to make the commitment, YuMe focused first on building its domestic ad network here in the U.S. for several years.

By 2013, YuMe had been approached by several device manufacturers in Asia ahead of their U.S. IPO. Having forged these manufacturer relationships, the time was right to engage more broadly, and YuMe was able to land several strong partnerships and solidify its Asian presence.

Tip #2: Target the right market as an entry point.

Asia certainly isn’t a single nation like the U.S. or Canada, and it’s even much more fragmented than Europe. Among the 45+ unique countries, each is home to different languages, distinct cultures and a multitude of ethnicities, as well as hundreds more dialects, norms, etc. found in specific regions.

For example, the telecom equipment market has been booming throughout most of Asia, thanks to the aggressive early adoption approach of most of the network and infrastructure providers, as well as very high bandwidth demand among consumers. Since the Japanese market is nearly six-times the size of Korea, it’s easy to see why most companies would make Japan their first priority. However, penetrating the market in Japan can be time-consuming. The Japanese take a slow and steady approach that can involve a long process of testing and trials. On the other hand, Korea is a much smaller market, but Korean enterprises and carriers work much faster. In many cases, it’s easier to establish a presence there before trying to conquer the larger market.

Following this approach, several now established telecom equipment companies such as Qualcomm, Juniper Networks and Starent Networks got their first reference customers in Korea, which enabled them to go after the larger opportunity in Japan with a proven, network operator-vetted technology.

Regardless of the technology or product, there is no room for a ‘one-size-fits-all’ approach in Asia and any kind of generalization is a slippery slope. Choose carefully which market is best suited for your product and company, and focus your limited resources on that specific market.

Tip #3: Manage your expectations.

Adding to the complexity of differing cultures, languages and business practices, working in Asia requires you to manage time and geographical differences. In the U.S., that means you’ll be working after normal business hours to meet deadlines and maintain communication.

Also, because face time is much more important and more common in Asian business than it is in the U.S., it’s unrealistic to expect a partnership if you’re not willing to travel. Building that relationship is critical. Once you’ve established that connection, perspectives become longer term. It’s less of a company-to-company partnership, and more of one between individuals.

Forging these relationships does take time, but the effort is substantially worth the investment. For example, looking to build on its U.S. success, the social media marketing company Wildfire (acquired by Google) began exploring opportunities in the Japanese advertising market. As expected, it took more than a year and multiple trips to meet with potential partners to educate them on the need for and potential of their solution. As a result of Wildfire’s persistence and patience, it landed a solid Japanese distribution partner and was able to generate substantial revenue from several leading Japanese customers.

Tip #4: Business is personal everywhere but more so there.

In most Asian countries, executives operate on a social system that is highly focused on relationships. Societies tend to be tight-knit, operating in a ‘micro economy’ where perceptions are formed very quickly. Ruining a relationship with one partner for short-term gain will certainly make it difficult to form other partnerships down the line.

It’s also important, especially for small companies or startups, to know the reputation of the potential partner. Corporations have their own personalities and legacies. Do your homework and be sensitive to who you partner with.

Here again, face time is critical. For example, the chief executive of Noom, a leading health and wellness app developer, is very energetic and travels frequently to meet with partners and hear from customers in Korea and Japan. His(at least) quarterly visits, have enabled the company to forge very strong relationships and develop a reputation as a trustworthy business partner.

Tip #5: Find the right partner, don’t cut corners.

Getting a foot in the door can be the most difficult challenge in making the Asian connection. Speaking the language is a minor hurdle; success requires securing an experienced, entrenched and committed partner to help you navigate the cultural and business nuances of this exciting new opportunity.

Finding the right partner you can trust to open doors, build relationships and act on your behalf on-the-ground, preferably with an extensive pre-existing network of companies, investors and business associates, is critical to closing deals. But, it must also be a two-way street—you’re looking for a matchmaker, someone who not only knows your goals and objectives, as well as what customers in Asia are looking for and what market opportunities exist.

Making the Leap

In considering any market expansion, every startup is, of course, looking for the most bang for its buck. But it can be difficult to know upon which opportunities you should strike while the iron is hot, and which to let simmer a bit before making the leap.

The key is to focus on quality, not quantity. Build momentum steadily by establishing critical mass, user traction, and adoption in the most promising markets—which may not be the largest—then build on as growth allows. Becoming a global sensation rarely happens overnight; it takes persistence, careful planning, and smart strategic partnerships to successfully orchestrate any global expansion.

Jay Eum is a co-founder and Managing Director of TransLink Capital. He is responsible for TransLink’s investments in Carbonite, Chartboost, Enterprise DB, Livescribe, nWay, Peel, Quixey, SoundHound and YuMe.