International Trade is expensive: international trips, certification, consultancy, sample delivery, etc. You name it.
Every company, especially an SME that has limited access to resources, tries to be careful while expanding internationally because the price for each mistake is very high. However, representatives of famous Trade Promotion agencies in Europe often mention that “90% of exporters expand opportunistically” and make a lot of mistakes.
In this and the next articles, we summarize the most common mistakes and how to avoid them.
Part 1
Mistake #1: Choosing the wrong market
“We want to sell in Egypt because our competitor is there!” or “We want to expand is Saudi Arabia because this market is booming” or “Someone from Japan is buying my product at Etsy and Instagram, we need to be there”.
Companies start to choose the market applying all sorts of logic, but don’t back up their decision with data or experience. Traditional Market Research is too expensive, and even initial market selection is complicated. As a result, SME might find out that the firm’s capabilities don’t match the expectations of the target country. It might happen too late, when the company has already invested dozens of thousands of dollars in the local consulting or trade shows.
What should be done?
Market selection is a challenging decision-making process and has to be backed by data. At least understand what is important for your product and company and apply the criteria.
Generative AI tools e.g. [ManatexGPT] can help you do a basic screening of different markets. Deep Research function can help to collect data about competitors, prices, and regulations.
AI agent [Manatex.digital] – digital export assistant, built by our company, studies the company, collects international data from many sources, and makes reliable decisions prioritizing and validating markets for specific companies.
Mistake #2: Not defining what “Good Partner” looks like.
SMEs often approach anyone who shows interest or appears reputable. As a result chosen partner can be unprepared to deal with the product range, miss focus, or even be a fraud.
What should be done?
In fact, the same idea of partner selection criteria can be applied. There are a number of things to be prepared in advance:
- Ideal Client Profile. Generative AI tools, e.g. [ManatexGPT] can help you to screen the chosen market and understand what type of customers prevail locally and what kind of capabilities they have. Do you expect a distributor to put the product on the shelf of their retail chain (can be the case with watches, e.g.)? Don’t hesitate to mention it. [Manatex.digital] can build an ICP for you for a chosen market and entry mode.
- Background check. Don’t save on it. If you have short-listed clients, run due diligence and collect local feedback around the company. Example: an author was matching a British company with a distributor in Eastern Europe, the distributor was also the owner of the premium pharmacy chain, and seemed very professional. However, the reputation in the local market wasn’t positive because of payment issues, etc. Modern digital tools can proceed with a background check.
Mistake #3: Relying only on events and referrals
This is a very common mistake: “I met someone from India during the trade fair, and this person offered me commission-based agency service in India”. Popular trade fairs like SIAL (food industry) or Cosmoprof (cosmetics) obviously can help to understand the trends, industry, etc., and help with face-to-face contacts. However, many leads lose interest, stop to follow-up while the cost of trade fair participation is relatively high. Also relying only on these contacts might mean the key opportunity on the target market is overlooked.
What should be done?
In 2025 can build the audience and awareness on the local market with a minimum cost
- Social Media presence. SMEs are often not proactive. But it’s worth building awareness online with inbound activities like webinars or conferences in the target market. This strategy can be beneficial if the product or service has unique selling points (e.g. scientific research, product unique features/innovation).
- Partnership with other SMEs. This strategy can be efficient if there are some common resources to share/exchange
- Digital Tools. Modern digital platforms and lead generation tools can help to identify and target customers in the local market. [Manatex.digital] has an integrated module of B2B partner search and also calculates the best market entry scenarios for each specific company.
- Local Consultants. Nobody knows target markets and culture better than local consultants. Also, some type of customers (government agencies, retail buyers, etc) need to be approached personally, and these are people with a local network and competence who can do that. Make sure to avoid mistakes #1 and #2 before you approach a local consultant (you’re in the right country for your company, targeting the right type of clients).
TO BE CONTINUED…
