Establishing a Global Business in Asia
The only criterion that qualifies a company to talk about ‘going into Asia’ is actually doing it. Five years ago, we took SI Partners into Hong Kong, with the aim of evolving the products and services we had developed in an Asian market and capitalising on the growth we were seeing in the region. We found that our consultancy and transactional services were very relevant and in demand across the region, so we expanded into the more complex markets of Greater China, Japan, Korea, India, Southeast Asia and Australia. This required time and attracting some great people who quickly expanded our knowledge and language skills.
There are two main reasons for taking your business into Asia. Firstly, to provide a service to existing clients with requirements in the region, and secondly to reach new clients. But whatever your rationale, it is critical to attract the right talent on the ground. You need people who are culturally aligned with local skills and are willing to absorb the values and culture of your business.
In your existing domestic market, you have an established network, knowledge and experience that guide your decisions. Asia demands a lot more effort because for most European and North American businesses, it is an unknown with a bewildering commercial culture. Having already overcome these challenges to establish ourselves in multiple Asian markets, we are in the perfect position to support businesses entering the region . We can provide the crucial local business insights that can smooth the process of market entry.
The market in Asia is structured in quite a different way. As a potential market entrant, what you envisage as your ideal acquisition or partner in Asia is often unlikely to exist, so expansion demands an imaginative approach. This could mean hiring individuals or buying a successful smaller business and growing it. An acquisition can often act as a talent proposition to obtain the good people and skills you need in a particular location.
Due to domestic M&A, other buyers entering the market and the level of market maturity, there are few independent agencies of scale to acquire in Asia. Whilst there are complex obstacles to navigate, working practices, visas, employment laws and taxation, the basic rules still apply when acquiring a company and what is really needed is some local experience to guide you through each market’s differences.
For all the challenges, entering Asia can bring enormous benefits. It diversifies risk and gives you access to vast new markets, and once inside Asia, its access to multiple markets is in some ways easier than Europe. There is real value in internationalisation whether via M&A or organically. The results can positively transform business operations and perspective. For us, it has worked well, and having a truly multinational team is proving to be an enormous resource for our clients and our business. By entering into new markets, you are forced to learn, and it invigorates the core of your business. Asia is a great energiser.
Alistair is a co-founder and Partner at SI Partners. He leads the firm’s global M&A practice, advising creative and technology businesses on growth and commercial improvement and connecting clients with global investors and partners. If you’d like to discuss expanding in Asia or global growth with Alistair, don’t hesitate to get in touch.
