The ability to be flexible and think local is vital to success when doing business in Asia Pacific for travel companies looking to make a move into this exciting region.
We hear it often—the Asia Pacific (APAC) region is the future. Its growth continues to be considerable, even with a slowdown in China, which makes it a very attractive market to enter. But, there are challenges. As a team from Bain Insights wrote in a forbes.com piece, “For too many brands, the APAC region has become a quick place to fail. The game is changing at an ever-increasing pace, and many multinationals struggle to keep up.”
Bhavya Sehgal, an APAC Strategist, explains that one of the challenges of doing business in Asia that global companies need to understand is that strategic plans are valid for about three years. “No strategies will be relevant for the next eight years or 10 years, because the market is changing and evolving so much. The frequency of multinationals revisiting their strategic plans has increased rapidly.”
Doing Business In Asia, Local Teams Know Best
One key to success in the APAC region is keeping things local. During the recent Phocuswright Europe 2019 conference panel, Lessons, Insights & Truths from Asia, Jeff Lewis, Vice President For Technology And Strategic Initiatives at TripAdvisor, recommended that global players looking to get into APAC empower local teams and have local customer service expectations. A local team will understand their own market and their own consumers.
It’s also critical to realize that the technology and marketing model in the headquartered country may not work in a local market. Lewis noted that local staff can struggle if they’re not given technological and operational capabilities to adapt to the needs and culture of doing business in Asia.
Strategist Sehgal agrees, “Either they will start localizing from day one or they will eventually have to do it because they cannot succeed here without localizing.”
Forge A Relationship With Local Government When Doing Business In Asia
Government regulations within the region can be a challenge too. Global organizations outside APAC may expect to find a regulatory environment like that of their home country, but that won’t necessarily be the case. To be successful, companies need to be open-minded since the process can be loose. Working with a local partner makes all the difference.
Companies in large countries, like the US and China, can find it difficult to understand the variances in these smaller markets, according to Mieke de Schepper, Executive Vice President For Online Travel Companies and Managing Director for Asia Pacific at Amadeus and formerly with Expedia. Speaking at Phocuswright Europe 2019, she explained, “Governments want companies that aren’t just looking to extract but to give back. They’re looking for partners to develop the local tourism market.”
It’s Not One Big Market
Respecting individual countries and their differences versus treating the region as one uniform market is another hallmark of businesses that do well in the region. In a WEX Travel Insights piece last October, Richard Cogswell, Commercial Director APAC, wrote, “Looking at the dynamic APAC travel market as a single entity would be a mistake. This diverse, and fragmented, region offers incredible opportunities, but it’s important to tailor strategies for specific audiences.”
Travel company strategies need to consider intra-APAC variations when doing business in Asia. For example, a Sojern report on the region explains, many APAC countries have their own travel sites–Ctrip (China), Rakuten (Japan), Makemytrip (India), Traveloka (Indonesia), which dominate their local markets.
Marketing plans for the region need to include different social media strategies for each country because countries within the APAC region have a wide range of usage. Indonesia is ranked fourth in the world in terms of Instagram usage. Yet, in fellow APAC country, New Zealand, Instagram usage is very low.
PCMA suggests that those looking to enter the APAC region would do well to look at countries individually, as part of a whole (like a portfolio). There will be times when they’re succeeding in one location, but not in the neighboring country and the next year it’s the reverse.
Local Payments, Global Experience, Vital To Doing Business In Asia
Travel companies need solutions that can support their strategies in this diverse region, and that includes supplier payment solutions. The one-size-fits-all strategy won’t work in this space either.
WEX offers a card scheme-agnostic virtual payments solution on a single platform, letting you choose from Mastercard and Visa to suit the requirements of each country and even each supplier when doing business in Asia. Our virtual payments solution gives you more choice of issuing locations and currencies in Asia and globally.
In addition, access to our local travel payments experts on the ground in the APAC region provides direct support to help you manage market and regulatory differences.
Appreciate Diversity When Doing Business In Asia
The vibrant, growing APAC region attracts many companies. Those that will succeed need to approach this diverse area with a local focus, rely on local expertise, build local relationships and understand and appreciate the local nuances. As Jeff Lewis told the audience at Phocuswright Europe 2019, “The only consistency is inconsistency.”