Over the past few years, the markets in Asia Pacific (APAC to some, or APJ, specifically calling out Japan) have expanded at a tremendous rate. With large, growing markets, strong consumer and enterprise demand, and skilled workforces, APJ represents a significant growth opportunity. For this reason, we've complimented our 2019 Go Guide on Expanding to Europe with strategies for jumping into APJ.
Expanding your SaaS company internationally can boost revenue growth significantly
"As companies hit maturity in their primary market, one of the first places they should be looking to expand into is Asia because of its strong market growth and skilled workforce"
- George Mathew, Managing Director, Insight Partners
Prioritizing Within APJ
There are several promising markets within APJ that industry experts point to. Each sub-region has a unique composition. Click into each sub-region in the map to learn more!
One of the biggest questions we receive when thinking about expansion into either Europe or APJ is: How do I choose the right country and the right market for GTM expansion?
Onsite's framework for prioritizing expansion within Europe holds true for APJ. Details below.
International Expansion Prioritization Framework
To decide which country or city to "land" in, a number of evaluation criteria should be considered. Feedback from industry experts led to the development of the criteria below:
- Market Size ($) and Customer Concentration: Where are my lead generation opportunities based, and where will my lead gen opportunities be the strongest?
- Cost: How much will talent and physical space cost?
- GTM Reach: Which other countries can we sell to from that location?
- Product Localization Required: What language, payment, and workflow nuances will we have to solve for?
- Language / Cultural Requirements: What selling nuances will we face in our selling motion?
- Access to Talent: What kind of reps do we need to hire?
- Complexity of Labor Laws: What laws do we have to consider related to fair and unfair dismissals when hiring talent?
- Travel Accessibility: How easy is it to get to this new outpost from HQ? How easy is it to get to customers from this new outpost?
Each dimension should be weighted differently to account for its importance to your company. Leaders we canvassed on this topic noted that market size and access to talent have been most indicative of a company's success. An example weighting of criteria is below.
Prioritizing within APJ
To decide which country to expand into, industry experts weighed in on the key countries and how they grade these markets against the framework.
To view the entire framework in detail, click to enlarge the image above or download it here.
For US and UK-based companies, the seemingly natural first step into the region is to expand into Australia and New Zealand because language and approach are similar. However, this sub-region is not necessarily the best stepping stone into the rest of APJ as it is geographically isolated and culturally dissimilar to the rest of the region. Market participants agreed that once you have made the first jump to ANZ, your next location should be Singapore as a strategic starting point into the rest of APJ, followed by Japan.
Australia / New Zealand
- Australia and New Zealand are attractive markets for ease of doing business. They are most like the US/ UK in culture and language. ScaleUps do not need to invest heavily upfront in product or marketing localization.
- Selling the product as-is through a partner is the easiest first step into ANZ as it requires very little investment of time and money.
- As your product begins to gain traction in the market, you can start to build a boots on the ground team
- The main obstacle of ANZ is geographic isolation and cultural dissimilarity to the rest of the region make expanding beyond this sub-region difficult.
- Headquartering in Singapore is the most efficient way to break into greater APJ. Friendly international business laws and a relatively large English-speaking population make Singapore a strategic landing point.
- Singapore makes for a solid testing ground for your product with low commitment due to the nature of its legal structures.
- Located within greater Southeast Asia, Singapore opens a gateway to selling across a broader market where strong channel partners exist, and its central location makes travel possible.
- Japan provides a lucrative market for SaaS companies due to Japan’s affinity for tech advancement and its large market size.
- Strong intellectual property laws and access to new, skilled talent provide attractive opportunities to expand here
- Language and double-byte character translation require an upfront investment. Working through resellers and partners in Japan is important for success - these partners have existing relationships and market knowledge.
While we provide recommended grading for each country based on our framework, the landing point that makes the most sense for your ScaleUp will be company-specific. If you are seeing customer pull from South Korea, that country may be first. Each company will be different based on product-market fit and corporate culture.
Wherever you go first, Insight has created a ScaleUp Guide to help our portfolio companies run at this strategy successfully. This guide is geared towards companies that are $10M-$30M ARR in size and executing a B2B Mid-Market or Enterprise GTM motion, though findings can be leveraged for companies in all stages of growth. The Guide helps teams think through project plans, geo-strategy, land locations, talent strategy, landing execution, team governance, as well as guidelines around targets and ownership to ensure onward and upward success.
If you are an Insight Partners' portfolio company, you can download our GO Guide: International Expansion ScaleUp Guide on Insight's GO portfolio platform. If you haven't joined the community and portfolio networking platform, you can register here.