One of the most frequently asked questions Cameron Gordon gets from brands prior to doing work with them is ‘how long does it take to launch in a new Asian export market?’ Here, he explains the many factors that can impact on the timeline.
Although there is no guaranteed timeline, there are some important variables that can heavily influence the time it takes to appoint in-market distributors, secure retail listings and get the first purchase order in.
Make the commercial viability of the opportunity obvious for the distributor
One guaranteed shortcut in the distributor engagement process is to effectively pitch a cohesive business plan that takes local market dynamics into consideration, versus simply providing a generic price list and a standard pitch deck for review.
While this approach requires more time and local market expertise, relying on the distributor to undertake the groundwork for the commercial feasibility exercise takes a lot longer, if it gets done at all. If you can clearly map out the on-shelf competition, how your product will be positioned in the category, what is in it for the distributor and retailer from a margin perspective and how you will support the business, it makes it much easier to get a “yes, I’m interested” or a “no, this is not for us”.
Margins matter
The speed at which a pitch turns into a negotiation between a brand and a distributor is largely dependent on how financially motivated the distributor is. You must remember that there is a clear opportunity cost for any distributor in taking on a new brand; the time and resources invested in launching and growing a brand in a new market means that those resources cannot be directed to another brand that may be more profitable for the distributor.
The question that should be asked by the brand owner is, “how attractive is this opportunity in the mind of the distributor”? Does the business plan present a clear path to profitability and return on investment for the distributor? Is there listing fee and A&P support available from the brand owner? Is the margin value chain healthy for all parties that play a role in the distribution and sale of the product? The more motivated the distributor, the faster the negotiation and path to the first sale will proceed.
Dispatch samples promptly
Delays with dispatching samples that will be reviewed by target distributors can significantly lengthen the amount of time it takes to enter the market. Without product samples in hand for review, distributors and their downstream customers cannot assess key fundamentals (e.g. taste profile, texture, packaging and branding) that will convert their high-level interest into genuine commercial interest.
Unfortunately, this is a non-negotiable step in the distributor review process and timelines can be setback by months if the brand is slow to dispatch samples. In addition to the speed of dispatch, missing or incorrect export documentation can also create roadblocks in certain markets. A guaranteed way to avoid this is to prepare samples very earl with all the required export documentation on a market-by-market basis to ensure that samples can be sent as soon as they are requested by distributors.
Consider the regulatory requirements for each target export market
Regulatory processes and timelines differ significantly across Asian export markets. If a product is legally available for sale in it’s home market, in most cases it will be able to be immediately sold in Singapore and Hong Kong, for example. On the other hand in the Philippines, Indonesia and Thailand, once you have appointed your importer and distributor, they need to register your products with their local government food and drink regulatory body. In Thailand and the Philippines, this process can take up to six months, and in Indonesia twelve months. Export market selection should take regulatory processes and launch timeframes into consideration.
