GigaOm: When it comes to new markets, one size does not fit all

SUMMARY: Before you expand globally, be sure you know the technology, demographics and culture differences of those new markets.

he 1958 novel The Ugly American was a fictionalized study of American jingoism in action. Its Americans didn’t embrace other cultures or try to understand them and then offer better solutions. Rather, they took a preconceived solution, put the culture ‘in need’ in a bear hug and tried to bend that culture around the existing solution.

Fast forward to now. The same dynamic is at work as American tech companies try to expand into international markets. Historically, internet-driven technology has radiated outward from Silicon Valley. Some of this is due to the difficult reality of scaling an internationalized application or service. But much of it is driven by projection bias and its partner in crime – false consensus bias. To put it another way – if people like it in Silicon Valley, they’ll like it everywhere.

akamaiglobeBut, that dynamic is no longer true (if indeed it ever was.) The next 1 billion new internet users will be located all over the world in cultures and economies with quite different and diffused needs compared to North American and European early adopters.

Silicon Valley is now looking to emerging regions like China, India and Brazil, where mobile usage is skyrocketing, for their new consumer-base. In this dynamic, the one-size-fits-all-model fails more than it succeeds. It fails for the simple reason that each market has different mobile usage needs, habits and demographic drivers that require a localized approach to product, acquisition and retention.

The winners of the next wave of the web will be those who best balance the product, marketing and strategic tension between standardization and localization.

Start with the following 3 steps.

Know your tech differences

Start right here. Your product must comply with market-germane needs around privacy, data handling and regulations – they often differ widely from country to country. Consider Brazil. If you’re a web browser trying to grow in Brazil you’ll need to implement the G-Buster plugin. G-Buster is designed to prevent any malicious code from running during the authorization or transaction process. This mechanism is the only security measure used by Caixa and Banco do Brasil to protect their customers.
Heard about Amazon’s trouble in India? Indian laws won’t allow Amazon to sell and stock products themselves. Amazon has to do it through partnerships with Indian-owned and operated middlemen – like Croma and Vijay Sales.
If you’re Android, are you working in the Android gray market? Or white? Gray market Android is shipped or modded Android that usually has Google services removed or hidden. Better for you, gray market Android gives you better screen real estate and discoverability.

Know your demographics

Understand your market’s demography. For example, the median age and reasons spent on the internet differ dramatically per region. In the U.S., the average age for internet users is 41 with shopping and e-commerce driving the majority of the usage. China’s median age is 24 and the bulk of what this cohort does online is around social sharing and casual gaming. Head to India where the average age is older than China.

In Moscow, a smaller 30 percent of total internet time per capita is spent on social networks. In a city like Volgograd, 40 percent or more total internet time per capita is spent using social networks. For Russia, the smaller the city the higher the percentage of internet time is spent using social media. Adjust accordingly or accept that you won’t be optimized in one or more markets.

Know the culture and localize your brand(s) accordingly

You’d be surprised at how many companies don’t take the time to really know their market when localizing their brands. One notorious example is Gap’s 1969 Jeans’ marketing campaign in China. 1969 was a year that most Chinese want to forget. It marked the peak of Mao’s Cultural Revolution – where intelligentsia and political enemies were being tortured, executed and/or sent to countryside labor camps. For China, 1969 was the furthest thing from the Gap’s vision of 1969 – a free-spirited period of personal empowerment and self-expression. So, know the history. Know the culture. Hire for your market. Conduct outreach to potential customers. Then, run your entire brand architecture and product set through your newly-developed cultural filter.

The challenge is balancing localization against standardization, and this applies to all companies. To win, you’ll have to move away from the “cookie-cutter” model and go local. But the balancing act is not solely limited to product and branding. You’ll find market-by-market differences in every part of your organization. Outside of product and branding, balancing local vs. global in your partnering/business development strategy is crucial. The right mix of global and local partnerships gives you the targeted credibility and user experience that melds “I have a right to be here” with, “I understand and serve your specific needs.”

 
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