Thinking about international expansion, particularly when first starting out, can seem overwhelming and premature, but it could be crucial to the overall success of your startup.
New Stripe research shows a direct correlation between the speed of a business internationalising and its overall success. Firms that expanded internationally during the first year of existence grew 141 percentage points more quickly in revenue and 15 percentage points more quickly in headcount than those that were slower to reach new markets.
Correlation doesn’t necessarily imply causation, but businesses that feel global expansion is too far out of reach may want to think again. Seventy one percent of online businesses in Australia selling internationally plan to further expand into new markets in the coming years.
This particularly makes sense in Australia, where, with a relatively small market, Aussie startups need to weigh the opportunity cost of not internationalising. Australian businesses themselves cited an influx of new ideas and products, better long-term prospects, and access to a wider talent pool as key reasons for expansion.
International expansion can therefore be the catalyst businesses looking to scale and to solidify their growth. Luckily, going global from day one is completely possible. By utilising infrastructure tools businesses today can support operations, manage challenges and cultivate a strategy for international expansion much more easily than in the past.
While the experience of managing international expansion ㄧ from having to navigate local regulations to website localisations and logistics ㄧ is different for every business, there are three key focus areas.
Managing complex regulatory hurdles
One of the most challenging aspects of global expansion is managing the regulatory complexities that come with establishing a business in a new country. Government tariffs, tax laws and other market-specific regulations are all barriers businesses need to navigate.
More than a quarter of Australian online businesses selling internationally spend an estimated AUD$68K-$139K on regulatory issues and compliance annually, while a further 29 per cent spend $139K-$689K annually.
Before entering a new market, it’s critical you familiarise yourself with the local regulations, particularly, any restrictions you might face. Connecting with other companies and founders that have expanded into the market is one great way of learning how to navigate some of the potential pitfalls.
Money is cultural
Money is oddly cultural. Like languages, payments and payment methods vary from country to country, so in addition to presenting prices in local currencies, you should consider providing shoppers with different payment options.
In China, for example, mobile commerce and mobile payments dominate, with Alipay and WeChat Pay accounting for a over a billion users between them.
Offering the right payment methods for the market is essential to cross-border success, particularly in a market like China, which has leapfrogged credit cards entirely.
Maximising developer resources
With technology transforming industries across the board, developers are fast becoming the driving force behind product development and revenue. Developer time, however, is growing more and more scarce, with 69 per cent of Aussie companies reporting limited developer resources, and 66 per cent saying that their developers spend more time on technical debt than strategic projects.
This underscores a crucial point ㄧ it’s not how many developers companies have, it’s how they’re being leveraged. Maximising developer time to focus on higher-impact projects that driven genuine business value, can make international expansion a more efficient, successful process, particularly for a lean startup team.
Consider embracing the cloud to give developers time to focus on what makes the business unique. Eighty-seven per cent of companies say that implementing and maintaining a modern technology stack is now a priority, helping them maintain an edge over competitors, stay relevant in the market, maintain speed and even recruit new developers.
There’s no doubt globalisation is crucial to Australian businesses themselves, as well as the broader national and global economies.
Technology is the key lever for this, helping Australian businesses navigate these challenges — more than half of Australian businesses selling overseas noted internet and technology services like Stripe have helped remove barriers to going global. Businesses need to utilise technology now in order to prepare for tomorrow’s challenges, and ultimately, drive long term success.
Mac Wang is head of Australia and New Zealand at Stripe.