From the California Business Journal Tech Newswires.
Conquering a new region or market comes with its own set of challenges. However, the process of expanding internationally can be made simpler by finding the right market.
Finding the Right Market
Most businesses look at the potential revenue they can make by expanding into a new market, and this is arguably the most important factor to consider. This will also hinge on the region’s appetite for the business’s goods and services.
A business’s ability to penetrate, survive, and make money in a new market will be hampered or helped by that country’s local laws. Therefore, businesses must consider the legislative environment in the country, market, or region to ensure it is favorable to international businesses. Lastly, businesses must find out if there is enough affordable talent to support its operations in the new market. Importing or training talent is a very expensive undertaking, especially in tech.
Keeping all the above in mind, here are some of the best markets for tech companies.
Israel has emerged as a regional powerhouse with Tel Aviv a prime example of how much the country has transformed. The Israeli economy is one of the most successful economies in the world and is home to over 60,000 startups. Israel is known to be favorable for big tech companies, but it still makes it easy for smaller tech businesses to carve their own niches.
The appetite for the Indian tech market is slowing down, but it is still growing according to some reports. The market grew by 9% in 2019, according to a new report from Forrester, a global marketing research firm. Software and tech services still dominate this market, so if your company is in any of these areas, this could be a huge market for you.
With over a billion potential customers, favorable legislation, and a young demographic that is likely to take up your tech products and form a huge chunk of your customer base, India is still a very strong market for companies looking to expand internationally.
India is also rethinking its digital transformation for both the private sector and the government. This means that outsourcing and consulting will be huge revenue earners for tech businesses that enter this market in 2020 and 2021.
China is the second-largest economy in the world and has the highest internet penetration on earth. Those two statistics make it a prime market for a tech business. Looking further, China is one of the biggest consumers of emerging tech, which helps explain why there is so much innovation coming out of the country.
A good example of tech consumption in China is its use of mobile payments. Over 580 million people in China pay for goods and services using their phones. The country is undergoing an e-commerce revolution, and this revolution needs tech to support it.
In summary, China has over a billion people who can become customers, a favorable tech landscape, and a huge appetite for tech products.
The United States
The United States is a mature market and, therefore, can’t be deemed an emerging or new market. Its maturity and its people’s spending power are two of the reasons that make it an excellent market. Depending on the state you choose to focus on, you can expand into an area with very favorable laws and a ready market for your goods and services.
The United States is an interesting market because it is easy to segment, which makes it perfect for tech companies that focus on niche products and services. If you are looking to expand into the United States, you should talk to GlobalPEO. GlobalPEO helps companies expand into over 160 countries, making the process easy and painless. They are also able to give you a physical presence in any of the 160 countries in days and not months, which makes it perfect for companies that want to expand rapidly. You can learn more at globalpeo.com.
Romania has been enjoying robust growth over the last decade, and now tech companies are starting to take note. Its startup ecosystem is finally mature enough to attract the attention of international tech giants. Although Romania is a favorable market, you still have to navigate the tricky landscape of little to no government support and bureaucracy. Since this is a landscape that has not been traversed too much by international tech companies, you will still have to find your way as there is little information about the experience of other companies operating in the country.
So, what makes Romania so attractive? There is a wide availability of skills, good infrastructure, steady GDP growth, quality of connectivity, complex legal structures, and avenues of inward investment.
Western Europe is a tricky tech market because of the many countries found there, but its redeeming quality is that it accounts for one in every five dollars spent on technology in the world. Most of western Europe, particularly England, has flexible employment laws that make it easy to find and hire the right talent. London, for example, has over 400,000 people who work in the tech industry. London also has low-cost structures, which will reduce the cost of your initial investment. London also stands out due to its maturity, market size, and transparency.
Britain’s economy is doing better than expected, given Brexit fears. This means people’s purchasing power is still intact, and the appetite for tech products and services is as high as ever.
France is a hidden global force considering that it is the eighth largest economy in the world that has a very steady economy and exceptional business ethic. France hosts some of the biggest companies in the world and is a major recipient of direct investments.
France remains a good market for tech businesses because of its high GDP, with Paris, in particular, emerging as an important business hub in the region.
Another hidden gem, Chile is one of the fastest-growing economies in Latin America. It is also the entrepreneurial and innovation hub of Latin America, and when both of these things combine, there is always high demand and appetite for tech products and services.
Sweden has very little bureaucracy, which is a perfect condition for any business. Sweden has seen its economy continue to grow at about 4% per year for the past few years. The people of Sweden are resilient, open, and competitive. Sweden also enjoys world-class academic institutions, which has led to a diverse, globally-connected, and innovative population, which makes it perfect for tech startups.
Canada is often spoken in the same context as the United States. Toronto, in particular, stands out due to it being the financial and business capital of the country. Toronto has a free market that is dominated by private enterprises. The people have a high buying power that is comparable to that of the United States, and coupled with its low tax rates, low business costs, and lots of professional talent, it could become a good market for your business.
The technology landscape is always changing, with markets emerging and disappearing every day. That said, if a business can find a country or market that has favorable conditions and enough talent, it could benefit immensely.