International Market Expansion Strategies
Most entrepreneurs I know are only focused on selling their product or service to American consumers and companies, and have not considered international market expansion strategies. However, there is a large and growing potential consumer base around the world. In this post, I’m going to discuss the profitable opportunities in India. This is particularly applicable if you are selling digital goods.
To begin, there will be unexpected challenges if you sell to Indian consumers. Cultural barriers, conversion rates, and willingness to purchase are only 3 of these barriers. However, there is also a tremendous and untapped market.
The 2 primary reasons I am focusing this article on India are because of the rising middle class and the number of shared interested that Indians have with citizens of the US. As a note, in this article I am referring to citizens of India and not Indian-Americans. Here are the reasons why I believe India is an attractive market:
1. Large market size: The population of India dwarves the United States. Although 42% of India falls under the international poverty line, there are many areas with well educated, well paid citizens who would make a great target market. A number of these individuals also share common interests with those in the United States. From my own experiences this has been very relevant for 2minuteGMAT because in 2009 GMAT test’s taken by citizens of India totaled 30,633. This number continues to increase every year and because of my marketing focus on India this has been a profitable market.
2. Attractive segment with disposable income: There are a large number of Indian’s pursuing programs in the US, particularly educational programs, who have disposable income. Many of the programs they will be attending will cost over $50,000 per year + living expenses.
3. Opportunity for market positioning: I believe companies developing products can position themselves well in this market. To those in this target market, a firm can not only promote its services, but it can also cater specifically to the Indian market. For example, a company could specifically emphasize the benefits received to Indian citizens.
4. Marketing outreach: From my experiences, there are many media outlets, blogs, and forums in India that are interested in collaborating with American companies.
5. Lack of competition in a specific space: Although there are many competitive spaces in US markets, there is less competition in certain Indian markets. I think this is a great opportunity for a company to differentiate itself.
The purpose of this article is not to recommend that a company only focus on India, but to advise companies to consider India as a potential market for their products and/or services and to consider international market expansion strategies. Although there are additional challenges you may run into, the potential upside is too large to ignore.