The coronavirus pandemic has changed the world. In addition to its significant health implications, COVID-19 has caused massive disruption to businesses and the global economy.
As the situation continues to evolve, companies are being forced to operate within new and unforeseen constraints. Those who succeed during this period will be the organisations that respond with agility to uncertain and unpredictable circumstances and look for opportunities to use the situation to their advantage.
COVID-19 has certainly reshaped and redefined the challenges of doing business in a foreign country. With many countries either closing their borders or enforcing strict travel and entry restrictions, international business travel has effectively ceased, with no clear view of a return date.
Given these constraints, many companies are hitting pause on their international expansion aspirations. However, while pursuing global expansion has undoubtedly become more complicated, organisations that are genuinely ready to expand shouldn’t necessarily back away from setting up operations in a foreign country or expanding their footprint internationally. While there are additional aspects to navigate just now, the fundamentals remain essentially unchanged.
The new business as (un)usual
Savvy companies with cross-border operations adopting creative approaches to work effectively in the ‘new normal’. With business travel and international in-person meetings generally no longer permitted, organisations are discovering cheaper and safer ways of doing global business. Technologies like video conferencing are emerging as an accepted and effective alternative to face-to-face meetings, and companies are realising that you don’t need to travel to conduct business in other countries.
Restrictions on in-person visits to overseas destinations undoubtedly make it difficult to get a comprehensive ‘feel’ for a country. Likewise, building relationships and forging deep connections is trickier when face-to-face networking isn’t an option. Yet, with organisations globally embracing new ways of working, it’s still possible to build relationships and trust with business counterparts (including customers) digitally.
Information, ideas, personal messages, and content such as photos and videos can be shared via apps such as WhatsApp, WeChat, Line, Facebook, Snapchat, Instagram, LinkedIn and Twitter. The custom of giving (the right) gift as a token of appreciation also never fails to strengthen a relationship, whether it’s exchanged in person or not.
The global economic slowdown and cross-border complexity
Since the coronavirus outbreak, Asia Pacific nations including Australia, China, India and Japan have tightened their foreign investment regimes. While this adds complexity to international trade, these changes are intended to protect domestic targets from opportunistic takeovers, not close the door to foreign companies. Many countries are emphasising that they still welcome foreign direct investment and will only intervene where a case gives rise to real concerns.
While the COVID-driven slowdown of the global economy is discouraging, countries across the Asia Pacific region have introduced an array of economic incentives and financial support schemes. These measures are designed to support businesses and households during these challenging times, limit the adverse economic consequences of the pandemic, and set the foundation for economic recovery.
It’s thought that some countries who manage COVID and their economies prudently may emerge from the pandemic in better shape than expected. As Albert Einstein said, in the midst of every crisis, lies great opportunity.
Getting back to basics
Amidst this period of exceptional disruption, the basics of cross-border business haven’t changed that dramatically. When considering a new business venture, always do your due diligence. Know your company - the infrastructure, finances, strengths and weaknesses. And research the local market - partners, suppliers, workforce, targeted customers, competitors, economic conditions, local laws and regulations.
Business leaders will need to reconsider their operating models; particularly how they can grow and capture new markets by leveraging:
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technology and innovation – this might include looking for opportunities to capitalise on automation, artificial intelligence, virtual reality, digital transformation and remote working approaches.
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shifts in customer psychology and behaviour – how can your organisation pivot to support customers with a renewed focused on health and hygiene, digital socialising and social accountability?
Ultimately, going global is going local, albeit in a different local market to your home country. In COVID times, it’s never been more important to seek advice from a trusted local business advisor who can help you navigate this evolving situation with confidence.
For companies looking to expand in the Asia Pacific, the Moore Australia Asia Desk is your gateway to a successful venture. We offer a team of culturally diverse, well-connected professionals who have a genuine understanding of the region and strong relationships with a global network of respected business advisors.
Moore Australia’s Asia Desk has the practical experience, local insight and international networks to support your organisation with embarking on an exciting new chapter.