{"id":12170,"date":"2019-09-21T16:52:00","date_gmt":"2019-09-21T14:52:00","guid":{"rendered":"https:\/\/gbp-international.com\/?p=12170"},"modified":"2019-09-21T16:52:00","modified_gmt":"2019-09-21T14:52:00","slug":"sales-challenges-in-asia","status":"publish","type":"post","link":"https:\/\/perfectoholic.pro\/gbp\/sales-challenges-in-asia\/","title":{"rendered":"What challenges do European SMEs face while establishing sales in Asian markets? The limitations of the distributor-driven market expansion into Asia."},"content":{"rendered":"\n

As the world\u2019s most populous continent, the countries within Asia can vary much with regard to environments, growth rates, cultures, level of maturity, etc. The government systems also look often different in the countries. Therefore, a clear understanding of each market\u2019s characteristics is essential. The same business model with a uniformed approach may not be effective in all markets.<\/p>\n\n\n\n\n\n\n\n\n\n

Which sales challenges companies face in Asia?<\/h2>\n\n\n\n
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The pattern for expansion into Asian markets by European companies is often done in a more opportunistic and less structured way. Apart from the long-distance from Germany or Netherlands, for example, to Asia, cultural differences, language barriers and local bureaucracy can make it more difficult to reach the Asian market. Due to these obstacles, the most common go-to-market option for SMEs entering Asia is via indirect sales channels, i.e. a distributor-driven model<\/a> through local agents or distributors.<\/p>\n\n\n\n

\"International<\/figure>\n\n\n\n
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Although it is the most popular \u201cfirst\u201d choice of starting the internationalization process into Asia, this distributor-driven model is actually showing a number of limitations, negatively affecting the results. In the remainder of this article, we will discuss these limitations of the distributor-driven model.<\/p>\n\n\n\n

In our next article, we will present the key success factors for SMEs in Asia to overcome these limitations.<\/p>\n\n\n\n

The limitations of the distributor-driven model <\/h2>\n\n\n\n

Choosing the right distributor\/agent
<\/strong>It often happens that European SMEs are not happy<\/strong> with their current distributor<\/strong>\/agent due to poor sales generation. One of the most important reasons behind this, is a common mistake\u200bthat European SMEs make during the selection process of the distributor\/agent partner in Asia: not doing the proper homework.

For example, quite often SMEs found partners spontaneously during a trade fair or other events, which is in itself not a problem, but what is often missing is a thorough analysis of the chosen partner.
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No direct customer contact
<\/strong>Passive approach to local sales by not having your own feet on the ground entails a risk that your distributor is less focused on your product. Especially if they are working with other companies or brands as well. In many markets, there can be common client expectations, such as quick after-sales service or technical support. A distributor should have the capabilities to meet these common client demands.
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Limited business development
<\/strong>Distributors typically sell within their existing distribution network and industries. They can be strong in their current segment but have difficulties in evaluating new business potentials and expanding horizontally to other business segments.
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No knowledge of building in-house
<\/strong>Utilizing a distributor’s local knowledge, contacts and networks, market insight will remain second-hand sources and the potential for developing in-house capabilities and market knowledge is limited for the European SME.
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Communication Issues
<\/strong>Unsuccessful cases often have lacking communication between the SME and its Asian distributor. This can be due to language barriers, but also differences in corporate cultures, etc.
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Other considerations <\/h2>\n\n\n\n