Talenox’s Gordon Ng recently made his third trip to Hong Kong as part of the company’s expansion into a new market. Here’s his candid take on what’s required to set up shop in a new country when you have limited resources and manpower.
The first things that come to mind when considering expansion into an overseas market include:
But does it always have to be this way to enter a new market?
Conventionally, most companies will go through the above steps to start operating in a new market. For Talenox, our strategy has been quite different. We did not set up a local entity in every market we expanded to, nor did we have physical offices. We were also spared the need for local team members to run the business. This has been possible because we’re a technology company selling software.
Talenox travels best through two distribution methods – inbound marketing and partnerships. As we updated the software to calculate and process Hong Kong’s payroll, tax and leave requirements, we also spoke to interested partners in Hong Kong. In addition, we did research on inbound traffic, and studied the ins and outs of the local requirements. Finally, after heavy testing of the software for Hong Kong’s statutory requirements, we launched it in late 2016. From there we started to grow our inbound marketing traffic and increased the adoption rate of our partners. Within a few months, we managed to get a steady stream of traffic into Talenox, subscribing to our full suite of HR apps from Payroll to Leave management.
As we increased spending on online advertisements and built on our inbound marketing traffic, we held a series of seminars with our awesome partners, such as Cornerstone HK, in Hong Kong during the month of the launch. These seminars covered topics ranging from the benefits of an HR Software-as-a-Service (SaaS) platform, to increasing productivity with SaaS applications. As a startup, I felt we were in a unique position to educate others on how they could run a lean team and focus on their core business. Aside from events, we met quite a number of local businesses and partners. Getting our distribution model to work in Hong Kong was not easy at the start, but as we tweaked and improved our strategy along the way, adoption rate became better.
Making meaningful trips to your country of expansion
Since our launch in Hong Kong, we’ve been integrating our HR apps even more closely with Hong Kong’s tax and labour regulations. Meanwhile, our partnership team also started to make more frequent trips to Hong Kong. This helps us to build better relationships with our local users and partners. We’ve been really lucky to have great support from our partners, like Cornerstone HK and FastLane Pro. As for business trips, we’ve learnt a few “hacks” to planning and making the most out of each trip:
- Of all the sites we tried for flight and hotel booking, Expedia gave us the best rates. We were also able to book airport express/transfer trips on the site. You should try it, Expedia is awesome!
- Have a few important meetings or events planned first before making the business trip to ensure that your time is well spent.
- Aside from meeting potential partners and touching base with current users and partners, explore events that may introduce you to a different network.
Surviving Hong Kong 101
Event with Fresh Accounting and partner
For business owners going into Hong Kong, here are some of my survival tips:
- You can get pretty good mobile data plans from CSL, one of Hong Kong’s largest and most trusted telecommunications company.
- It’s actually pretty difficult to find cafes with good wifi, unlike most countries. I was pretty disappointed with the wifi connectivity in Starbucks and Pacific Coffee. Till today, I find McDonald’s wifi the most stable. Please comment below if you know any cafes with great wifi. Cheers!
- Instead of working in a cafe in between meetings, drop by Garage Society, WeWork or PaperClip HK to use their hot desking facilities!
No fixed way to making inroads
A couple of months on from our launch, we are still trying out different strategies to expand our reach in Hong Kong without getting a local office and without the need for having a local outbound sales team. Will Talenox eventually set up a local office in Hong Kong? I cannot be certain for Hong Kong, but for bigger markets that are five to ten times the size of Hong Kong market and have very high adoption rates, there is a very high possibility of growing a local team to forge strong network ties.
Remember to grab some local food during your trip!
Talenox’s growth model is not suitable for every type of business, not even for most of our competitors. Every expansion strategy depends on your business model, distribution model, cost structure and the objectives of getting into a market. If you are planning on expanding into a new market, we wish you all the best! Feel free to share your thoughts and experience in the comments section.