Nearly every business wants to be big business. A company’s growth isn’t just a sign that it’s doing things right, it’s an essential component of long-term competitivity. But it turns out every silver lining has a cloud, and the process of expansion can entail more than a few complications.
New markets have an annoying tendency of not being exactly the same as established markets. It’s vital to consider the particularities, such as preferred methods of payment and average spending rates, before making the leap. As a growing business, failing to consider the payment specificities of new areas of operations carries the risk of revenue loss, so what should be taken into account?
Meeting demand is imperative to business growth
It might sound obvious, but before selling to new customers, it’s essential to look at what they actually want. Working smart is a prerequisite to working hard, and figuring out consumer trends is an absolutely vital data point for growing companies looking at expansion. For example, a company hoping to make inroads into market segments dominated by younger generations wouldn’t do too well with a product that carries a negative environmental impact, as increasingly eco-conscious millennials and Gen-Zers are finding themselves more and more repelled by products and companies that don’t have a solid set of green credentials to show off. Likewise, a tech business looking to develop its presence in Asia might struggle if it can’t tie its product to mobile devices, as mobile in Asia surges from ‘common’, to ‘prevalent’, to ‘inescapable’. Identifying consumer desires is a fairly important item on the to-do list before trying to supply demand.
Pinning down payment preferences
Where it gets a bit less obvious is that keeping track of trends applies to payments, too.
Those omnipresent mobile devices in Asia? They’re transforming the payment landscape like a hurricane, leaving slow-adapting companies dazed in their wake. Being able to function and grow as a business in Asia is to an increasing extent dependent on your ability to handle and process payments from mobile-based payment services like WeChat Pay and Alipay.
Expanding into Asia in 2020 without a comprehensive and intelligent approach to mobile payments is asking for trouble. It’s not that Asia’s a strange outlier, either, every market has its unique payment foibles. Moving into Latin America? Boleto Bancario is a must. Looking at Russia? Better be prepared for e-Wallets and payment kiosks.
Going online or standing in line?
And those payment preferences are deeply tied to how customers in particular markets actually prefer to shop. Card payments might be big where people predominantly shop online, but in cities where people are physically nipping in and out of shops there could be a big mobile payments preference. More rural locations, where technology has yet to penetrate the traditional shopping experience, might still prefer to conduct most of their payments in cash (it has the benefit of working even when the electricity goes out).
Not only is a familiarity with the shopping preferences of particular locations and demographics vital to determining the expansion strategy for growing businesses, but it’s an important piece of the payments puzzle. Understanding how and where consumers prefer to shop in markets of interest is key to developing an effective payments strategy for those markets, saving resources that might be wasted on irrelevant payment methods, and maximising customer satisfaction.
Understanding the wants and needs of a potential new customer base is crucial to crafting an experience that will keep them coming back. Every data point on trends, habits and preferences is a piece in the bigger puzzle of a successful expansion.
A company looking into expanding into, say, Russia and the CIS, and hoping to market itself primarily to younger consumers, might find itself embarrassed and struggling if it approaches them with a pollutant-ridden product and only accepting card payments. While a company moving into Asian markets, and that does the legwork of figuring out what consumers there want in terms of products and payments (the data would suggest mobiles and mobile payments, respectively), stands to write itself a smooth expansion success story.
Business growth is (hopefully) inevitable, but it doesn’t have to be painful, and a strategic approach to payments is the answer to expansion without the growing pains.