Sniping for beginners

Homing in on your ideal target is better than biting off more than you can chew

Nobody exports to Asia, or even to China, for the simple reason that you can’t do deals with an enormous land mass. We do deals with specific people, who probably live and work in a single city. This goes double for New Zealand businesses, which are so small they could never hope to dominate any sector or market in Asia in its entirety.

However, according to Gourdie, there are still some inexperienced firms that don’t seem to have realised this.

“They are trying to do too much in too many parts of the Asian theatre and not being clear about the seeding strategy,” he says. “Larger companies are more focused on a single target consumer and driving that wedge in before going further.”

He cites the example of Methven, which is going after the high-end hotel and multiple occupancy appartments in Shanghai. It’s all about careful selection of where you are going in.

Gestro has similar advice: Focus on areas where you can see an opportunity.

“They might be in small cities or small regions. You can’t go in and try to conquer the world, or double your business. You might think you have the capacity to do that, but the market will only take what it wants, it may be a small amount or more than you can possibly provide. You possibly can’t scale the business to match, so at the start you have to think of it as infinite, and that gets you thinking about how you’re going to fund that growth.”

It’s not just about biting off more than you can chew and then chewing like f **k, as 42 Below founder Geoff Ross once advised, but more about avoiding trying to take a bite out of a large moving animal and ending up with a mouth full of broken teeth.

‘You can’t go in and try to conquer the world or double your business. You might think you have the capacity, but the market will only take what it wants’

Getting in on the ground

So how do you pick your target? You do a lot of research, get good advice, and then you, or somebody senior in your team, jumps on a plane. “There’s no better way to find out than to go to the market,” Gestro says. “You see and understand the scale of it.”

Gourdie outlines the ideal plan.

“Invest in one of your senior people who has seen your proposition succeed so that they can go into that market and lead the organisation, that is critical. Don’t outsource that too quickly, no matter how accomplished the people you outsource it to are. A lot of what drives success is belief in the company, so the ideal is to have somebody to organically transfer that into the overseas business in the initial stages. There are many more dimensions to success that can only come from having somebody there with that confidence and understanding of the brand.”

This usually means bootstrapping your way around one Asian city after another to gather the intelligence you need for the next step, so dust off your passport.