International Law

It's Time To Export To China (And The Other BRICs). And Here's How.

By Dan

The Portland Business Journal just published an article by my long-time friend, Alexander Aginsky. Alex is a Thunderbird MBA who for the last ten years or so has been assisting American companies going into emerging markets and emerging market companies coming into the United States, through his company Aginsky Consulting, "a boutique market entry consulting firm." 

Alex's article is entitled, "When it comes to exporting goods, there's gold in the BRICs" and it sets out the basics for exporting product to and selling product into the BRIC countries, including China. For the full article, go here. 

Alex's article starts out by noting how the BRIC countries are getting wealthier and more appreciative of American goods. Alex then notes how "too many companies sell themselves short" in wrongly assuming their products will not stand a chance overseas.  

Brazil, Russia, India and China "are sprouting new billion dollar companies and millionaires ... who want the products and services that American companies offer" and the days of "America buys and BRIC sells" are being replaced by 'everyone buys and everyone sells.' Local companies often overlook the export potential of their products and do not realize that their products can "command premium prices as luxury products in BRIC economies." 

The article then lists goes on to point out that going international takes "research, planning, and commitment 

The article then sets out the following tips for those looking to sell overseas: 

• Be prepared for a serious commitment. International trading holds small rewards for one-time transactions. The economies of scale of marketing and shipping make high-volume shipments over a long period of time more profitable. 

• Research your target market. While mass culture and the Internet are bringing distant cultures closer together, tastes and preferences still vary incredibly from country to country. 

• Adjust your marketing for your target market. Beyond simply changing the language on your packaging, try to adapt your entire marketing and branding to fit with the culture of your target. 

• Research the potential barriers to entry. The BRICs are not known for easy access. A maze of permits, approvals, quotas, and tariffs may be the first things to welcome your products when they reach these new markets. These barriers may be troublesome, but once you overcome them they can act as a deterrent to future competition.

• Determine your competitors. Besides getting to know your local and foreign competition, analyzing a competitor can provide you with a case study to determine what works and what does not.

• Consider logistics. The cost of shipping is a serious consideration for exporting and must be factored into your financial projections. Also, you must consider how well your products will fare in a shipping container going across the sea for weeks.

• Have a local presence. Whether it's a complete office staff or a single part-time employee, it helps to have someone on the ground to represent your products and to keep you updated on your performance. Moreover, having a permanent physical presence in your target market can simply add credibility to your company and demonstrate commitment to potential clients.

• Look out for assistance programs. The federal and state governments have a wide array of programs to encourage American companies to export. 

• Have the right partners. Whether it's a lawyer, a consultant, or a distributor you can trust in your target market, it helps to have the knowledge and experience of an expert on our side.

All good advice....so read the full article and get selling.  

What do you think?

9-21 UPDATE: A reader sent me a very interesting WaPo article detailing how German companies are moving ahead of American companies in selling luxury household goods to China's consumers.

Full post as published by China Law Blog on September 22, 2010 (boomark / email).