For more on exporting your business overseas, read our digital edition article, ‘Time’s right to cross borders’.
At this year’s Abta Travel Convention, Travelzoo boss Chris Loughlin offered delegates two brief rules of thumb for overseas expansion of travel firms.
One was to target countries that speak English first, the other was to target beer-drinking countries. While the logic of the first tip was easy to grasp, the second took some explaining.
Suppliers in beer-drinking countries, he claimed, were less inclined to “stick their heads in the sand” and rein in marketing spend in difficult times.
There are no doubt many opinions about how best to break into new markets overseas, but the trend is certainly growing as technology opens up the possibility of finding growth outside of the UK.
Matt Cheevers, managing director of youhotels.com, said:
“We are operating in Turkey, Italy, Germany, Spain and Greece, generally taking the route of having a general sales agent (GSA).
“We have a website translated into seven different languages, but that’s the easy bit. The issues then come with localisation.
“The main companies that have done well out of internationalising their businesses are hotel companies; throw flights into the mix and it becomes a lot more complex.
“By using a GSA you are not going to earn as much, but while you are learning about the market it’s better than selling nothing.”
One of the key issues facing firms is the ability to take payments online and it was for this reason that Barclaycard developed Smartpay, which offers most local payment types.
Andy Simmonds, Barclaycard head of commercial management, said firms have a big challenge competing against local incumbents and large multinationals that already have a market presence.
Firms also have to decide whether to target more mature markets where online penetration is high, like Scandinavia or Germany or markets such as those in southern Europe where potential growth is greater.
“In terms of the competitive landscape the question is ‘what’s my proposition, how can I differentiate my service versus an incumbent?’.
“You only have to look at online travel to see how it’s grown. It’s one of the most significant sectors in a growing market across Europe.”
Although technically there are no physical barriers to overseas expansion Simmonds said it might be advisable for firms to look closer to home, because it is likely some form of local presence it needed.
“There is absolutely a requirement to localise your offering to be able to provide support in the local language and to understand consumer buying behaviour.”
Digital agency Fortune Cookie has taken on a truly global footprint, having recently opened offices in New York and the Far East to complement its existing bases in London and Poland.
Justin Cook, managing director, explained that for a tech company this meant it could “follow the sun” allowing it to develop 24/7 and bring product to market more quickly.
“The UK economy is the 147th fastest growing in the world – you have to go where the opportunities are.
“There has never been a better time from a currency perspective to sell your services abroad – we are cheap.
“The UK is probably the world’s most advanced provider of technology services, and growth overseas gives your people the chance to live and work in new places. We are living in a world without borders.”