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Guide to Growth: How do we go about entering new markets?

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When considering entering a new market, businesses first need to consider exactly why expanding into a new country is the best course of action for them. Some enter markets on a purely opportunistic basis rather than first developing a fully formed strategy, according to KMPG’s UK head of retail Paul Martin.

“We often hear that brands make the decision [to enter a new market] because of someone contacting them with an offer, but you need to be really clear about why you’re going into a new market,” he says. “Deciding where to go is often what businesses spend most of their time on, and it’s the easiest part. Most teams can do research on where is a growing market and how much [local consumers] are spending on that specific category.”

Businesses then need to carefully consider what form this expansion will take – whether it be a licensing agreement, franchise deal, joint venture or full ownership. The key is discerning how much control you want to have over your proposition versus how much investment you are willing to put in, says Martin.

For smaller brands who cannot yet afford the aid of international services providers such as KPMG, Martin advises utilising the Department of International Trade’s free resources. Among other expertise, it can offer local market research, help identify possible business partners and provide support during overseas visits.

Ray Clacher, retail consultant and former executive vice-president at Hong Kong fashion group Trinity, also recommends making the most of government resources, including the UK Trade of Investment (UKTI).

“This government body has one sole purpose – to help brands do business abroad and to help open up markets to SME’s and large brands into new territories,” says Clacher. “In my experience, the UKTI has been a great thinktank and sometimes a source of funding for new markets I have tried to enter, such as the United Arab Emirates, South Korea and Japan.”

Alongside bodies such as the British Fashion Council, he also suggests contacting the International Chambers of Commerce in the respective countries, “as they have names and email addresses for all the leading department store buyers, online pure players and major independent retailers”.

Gathering information and advice from other industry insiders is also a top tip.

Trade fairs, such as Micam for footwear and Pitti Uomo for menswear, are worth a visit to help build brand awareness and international contacts, says Clacher: “They continue to be a good source of meeting brands, buyers and retail consultants able to help you with key contacts.”

Conferences, such as the World Retail Congress and Drapers Fashion Forum, also offer value for money, says Clacher, and are a great place to meet brands, buyers and CEOs offering advice and sharing experiences.

Our new advice portal for retailers and brands, Guide to Growth, aims to solve the problems and challenges fashion businesses encounter as they grow. Email your questions to associate editor graeme.moran@emap.com and we will get them answered. 

Plus, read our Growth in a Changing Economy report here to learn how fast-growth brands and retailers are overcoming barriers to growth. 

Drapers’ Guide to Growth programme is produced in partnership with Clipper.

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