These days, start-ups are just as likely to find a supplier, or even a customer base, in Asia as they are in Australia. The exploding Asian marketplace has seen Australian businesses flock there in huge numbers, often with an ABN gained just weeks previously.
However, while the opportunity in the continent may be huge, many Australian start-ups are failing to connect properly with it.
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According to recent research by the Australian Industry Group and Asialink, although 74% of Aussie companies are keen to expand to Asia at some point, many are deterred by fears over the language, business culture and legal issues.
Australian businesses, the report claims, need to improve their ‘Asian literacy.’ But what, exactly, should you expect if you do business in Asia? What are the common hurdles and how should you overcome them? Here are some of the key ways to become Asian literate.
Find a trustworthy on-the-ground presence
Indian-born Ruchir Punjabi immigrated to Australia six years ago to study at the University of Sydney and having completed his degree and established a successful software design business, he now calls Australia home.
Founder of Sydney-based Langoor.net, a web-based application which allows anyone to easily create their own website or mobile application, he is now attempting to tap into the huge economic opportunity offered by his homeland.
The business already utilises a development team in Bangalore but is looking to expand its customer base there.
Despite his Indian heritage and connections he still experienced the same difficulties as Western businesses trying to set up in India.
The most important resource is to have a trustworthy contact to represent his business on the ground, he says.
“I think having a local partner is perhaps the most important thing you want to do in India for your business,” Mr Punjabi says.
“The importance of a local partner is for them to share your business values and help you apply them in the local context, relevant to the market.”
They will ensure that things get delivered on time and manage the bureaucracy and red tape that India is famous for, he says, and these middlemen can be located through forums such as the Australia India Business Council.
Treat relationships with respect
Once this box has been ticked then businesses can get down to the main challenge of recruiting the right staff to represent your business overseas, a task that was underestimated by Punjabi.
“Having someone advise you on your recruitment strategy is critical in a market you haven’t had much exposure to before,” he says.
“Businesses have to factor this in as a major threat when evaluating opportunities.”
He overestimated the talent pool available and said it was hard to find quality people in a country where “people treat job-hunting as a sport”.
They would leverage a job offer for a better position with another firm which meant he always needed to be prepared with a counter offer.
He also offered bonuses for staff that stayed with the business over longer periods of time.
This last measure was also utilised by Matt Barrie, founder of Freelancer.com, which has a huge overseas presence. Barrie says it’s critical to use tangible outcomes to manage expectations.
“Put a contract in place if necessary,” he says. “Set expectations upfront. Use milestone or progressive payments as deliverables come in to protect yourself rather than pay upfront.”
Barrie also stresses the power of word-of-mouth, which has driven the popularity of the Freelancer.com online outsourcing marketplace in Asia.
“Enabling entrepreneurs and skilled freelancers around the world creates a win/win situation for both sides of the equation, which generates buzz and hype about us,” he says.