Expanding to the Asia-Pacific gives rise to a range of unique challenges that differ from expanding to America or other countries. These challenges range from difficulty obtaining regulatory approvals, establishing a physical presence, connecting and marketing effectively to the local market and securing funding.

Within the Asia Pacific market there are a range of different cultural considerations account for meaning a tailored country-by-country strategy is often required.

Localisation of services

One of the most significant challenges European and UK startups face when expanding into the Asia-Pacific region is the need to localize their service offerings. Each country in this vast region has its unique preferences, languages, and cultural nuances. You need to understand:

• The consumer behaviour of the local market.
• The preferred marketing channels of each country (for example, in China WeChat is a lot more popular than WhatsApp) and country-specific social media platforms in Thailand are very popular. In addition, in Australia and New Zealand, different demographics use Facebook than the demographics in Europe.
• Region specific marketing. Some of the countries in the Asia Pacific market are vast. Various regions often have their styles and characteristics. For example, on the Gold Coast (a coastal city in Australia), there is a strong surf and skate culture whilst in Melbourne it’s a little more coffee and European-focused. A tailored marketing campaign is needed to localise your marketing strategy to each individual market.

Techniques and strategies European Startups use to localise services include:

Conducting localised market research in each individual country and sub-region. In your market research, be sure to cover cultural, religious, and other factors that are unique to the local market. Make sure to keep an open mind, cover all demographics and look at potential applications for your product or service that may not be applicable in Europe. For example, shared bikes and e-bikes may see a higher take-up rate in Asia Pacific cities with robust bike lane networks and a young student population. Some Asia Pacific cities are built flat with long distances between suburbs. This is generally different to the design of European cities.

Tailor your marketing to the local market. For example, Thailand is a religious country and your marketing needs to be reflective of that. In New Zealand, there is a strong Indigenous/Maori presence. As a result, both languages are generally used in marketing, and you need to tailor your implementation strategy to all markets.

Capitalising on Government Grant and Tender opportunities

Most startups are innovative by definition or have some kind of innovative product or service to offer a new market. As a result, there are often various grants that can be accessed. A country-by-country review of the potential grants and funding from the government for that sector is a great first step when deciding on which region and country to expand into. Researching and assessing any tax and research and development incentives is also a great idea.

In addition, government tenders are often a perfect opportunity to expand to a new market. These come on from time to time, and therefore, global tender monitoring for tender and contract opportunities in their respective sectors are critical for startups to ensure they stay abreast of any opportunities. 

Regulatory Approvals:

For many European startups, especially those in the financial sector, navigating the labyrinth of regulations and compliance requirements can be overwhelming. Regulatory approvals are essential for gaining trust and operating legally in the Asia-Pacific. The stringent regulatory landscape in the Asia-Pacific region can be particularly challenging to navigate, particularly in some companies with language and bureaucratic culture can be an issue. Given the complex regulatory environment and the associated cost of navigating it in some countries, startups need to carefully select the countries to which they expand to.

Strategies company employ to meet these challenges include:

• Entering into a Joint Venture with a local company. For some countries in the region, there are rules in place that require you to have a local subsidiary and local directors. Partnering with a local player in the market with the regulatory approvals in place can fast-tracks this process.
• Take advantage of mutual recognition laws. This can help where there is a less burdensome regulatory approval process in one country compared to another, but there are mutual recognition laws in place between the two countries. You can apply for approval in one country and have it recognised in another.
• Purchasing a shelf company with the licences in place. This is common for example in Australia if you require a real estate licence, however, it can also apply to a range of industries such as finance and health / medical. Where an existing company has the appropriate licenses, but it not actively using them, you can purchase the company or enter into some other agreement that lets you leverage those licenses and save the regulatory hassle.
• Joint Venture with a local government entity. This is not common in Europe, or any countries in the Asia Pacific, however, in some companies, particularly in Asia, this is possible. Many local government entities have existing licenses and regulatory approvals in place for a range of activities, and joint venturing with them is nothing unusual or foreign in those specific jurisdictions. It is standard business practice.

Operations establishment and market penetration:

Establishing a physical presence in a foreign market and penetrating it effectively is no small feat. European startups often struggle with questions like where to set up an office, how to advertise to a local audience, and what marketing strategies to employ. The Asia-Pacific region is known for its competitive business environment, making it crucial for startups to develop a well-thought-out market entry strategy.

Some strategies to overcome these challenges include:

• Finding Joint Venture Partners: Collaboration can be a game-changer for startups entering the Asia-Pacific market. Finding suitable joint venture partners can help them leverage local expertise and networks while sharing the risks and costs of market entry. However, identifying the right partners and negotiating terms can be a daunting task, especially when dealing with different cultural norms and business practices. You need to look into a potential partners track record, any existing government contracts they have, and their ability to penetrate the local market.
• Leverage media: The media in the Asia Pacific love talking about new startups expanding to the region. This includes startups and unicorns from Europe and America. In the initial stages of your expansion, this represents an excellent opportunity for free exposure in the media if leveraged correctly.
• Use a pilot market. Australia is often a pilot market for companies looking to expand internationally. It combines a broad range of demographics into one market and a broad range of sub-demographics and sub-cultures. In China, for example, another interesting market is Shanghai. Although it is in China, it is a large cosmopolitan city with a very strong middle class. Other potential pilot markets are simply where the government is open to your product or service. For example, an e-mobility startup based in China was expanding into the Singapore market. They entered the market by applying to the Sentosa Island government for the provision of e-mobility scooters. They did not specifically choose Sentosa Island for any reason other than the fact that the government had a tender out for the provision of e-mobility scooters.
• Integrate your European online presence into the country or region. Developing a sub-domain for your existing website helps greatly. In addition, where you have a well-established Instagram and Facebook presence (as well as other social media particularly for Asian countries) these can be leveraged upon in order to quickly gain credibility in the Asia Pacific.
• Social media needs to be leveraged in a community-oriented way. For example, in the Australian market, mothers' groups and local community Facebook groups are very well respected and great avenue for advertising products or services. They leverage on the additional credibility of these community groups. This is often not the case in Europe.

With startups from across the global expanding into the Asia Pacific market almost monthly, they would be well advised to careful plan their market entry. With a well-researched, localised, and highly tailored plan startups can successfully tap the Asia-Pacific market and find scale and profitability.