International Marketing: 1 Should You Enter Emerging Markets?
Should you market internationally? The United Kingdom, United States of America, Australia, South Africa, Zimbabwe, India, and Hong Kong are all representatives of a successful policy of British imperialism. With the spoils of this extension of influence came much conflict - think of Ghandi when considering India, remember 18th century battles with France over land an ocean away in what would later be called Canada, and consider war with Germany when the latter expanded a navy in the early 1900s. International domination is indeed a risky endeavor, but the rewards can be staggering.
Successfully establishing a first mover advantage can open new worlds of opportunity, as can leveraging a geographic competitive advantage. Americans reign over the Internet - 60% of our nation's 280 million people are online (as are nearly half of Canada's 40 million), and U.S.-based OEM providers such as AltaVista, Google, Lycos, Microsoft, and Yahoo! have already captured key market share internationally. However, as growth rates in the American Internet user base have regressed to single-digit numbers, North America is becoming less critical when considering online audience reach. After all, "The US is still the largest single Internet universe, but with a total of 371 million people with Internet access across 21 countries, the US Internet population accounts for only 43 percent of the world Internet audience. This is a clear indication that the Internet must soon shift from a largely American medium to a truly global, multi-lingual medium to accommodate this significant global audience."2
Consider this fact-filled spiel of international trivia:
* Diamonds primarily from South Africa continue to sustain the 60-65% diamond market share ($50 billion) enjoyed by the British/Dutch De Beers corporation.5
* A large amount of the British staple tea comes from India, as do textiles and access to more than one billion people for commercial markets.
* Any English-speaking tourist will find friendly street names and familiar businesses in Hong Kong, China; Victoria Peak and Western Market are top attractions, and Hong Kong's nearly 7 million residents are the second most-wired population in the world (behind the United States) when comparing modem penetration rates.3
* Although originally a far-fetched outpost for dumping British criminals (nearly half of the original colonists were exiled felons), Australia's nearly 19 million people now offer a highly urbanized market, and the traditionally encumbersome 8,000 mile distance gap between the U.S. and 'down under' isn't so costly when selling information over an inexpensive medium like the Internet.
If you're an American firm, utilize the incredible diplomatic framework already installed by our British and American business ancestors. Think about the 30,000 U.S. soldiers currently stationed in South Korea. 50 years of heavy-handed American influence has opened an underdeveloped market. More than half of Koreans use a broadband connection when surfing the Internet.1 That's five times the rate for U.S. surfers! And don't forget that the Republic of Korea's 46 million people are coming online faster than the dying U.S. growth spree. Koreans spend nearly twice as many hours on the Internet as the average U.S. user, too.2 But beware: when exporting products to South Korea, you may experience border difficulties. This is what happened to one marketing firm: "One Korean translated our site and marketed it for a couple of weeks. He sold more than $10,000 of our product, but the customs officials seized and destroyed the shipment." ...when it comes to the Internet, Europe is just a couple years behind.
And what about the European continent? The Euro has made recent inroads on the supremacy of the American dollar, leaving no question of the importance of a united Europe to international trade. However, when it comes to the Internet, Europe is just a couple years behind. Economic powerhouse Germany is also behind when it comes to Internet penetration - only 27% of the Deutschland's populated actively surfs the Web compared to 60% in the United States.3 France is even more remedial than Germany - 18% of the population is online, and only 2% have broadband access.
So why move in to these markets? France's socialist government "has defined plans to make sure that all the country’s population has access to high-speed internet links within five years. The project strategy, whose details are yet to be unveiled, is aimed at allowing local communities to make use of cheap loans worth about $1.3bn (E1.53bn) to construct high-speed web connections."4 Will Internet usage in France take off like it did in South Korea after implementing an "if they build, they will come" philosophy? Only time will tell, but expect the gap between the U.S. and Europe to shrink considerably over the next several years.
This was just the first in an on-going series about international marketing. Future pieces will expand upon the depth of international markets, address payment collection problems, and discuss international business risk reduction strategy. Expect new installments each week!
David Wolf has worked in the adult industry for three years. He specializes in international marketing strategy and web spider creation. David holds a BS in Business Information Systems, is currently pursuing his MS in Strategic Intelligence, and can be reached for follow-up inquiries at Wolf@adultwebmasterconsultants.com or through www.adultwebmasterconsultants.com.