Tag Archives: social media for international business

Japan-EU Free Trade: Opportunities and Challenges for New Market Entrants

As CNN reports, Japan and the EU have agreed on an historic new free trade agreement which covers one-third of the world’s economy and includes 600 million people

Expected to come into force in 2019 after being approved by lawmakers on both sides, the agreement, as CNN reports (citing World Trade Organization Statistics), will eliminate nearly all current tariffs on EU products of 1.6% when they arrive in Japan – and 2.9% on Japanese products entering the EU. CNN also reported that the EU said current Japanese tariffs “cost its companies up to €1 billion ($1.2 billion) per year”. Notably, as The Economist reported last year, “the deal could raise the EU’s exports to Japan by 34%, and Japan’s to the EU by 29%.”

Ankit Panda, reporting for The Diplomat, detailed Japanese Prime Minister Shinzo Abe’s statement following the signing of the agreement: “The EU and Japan showed an undeterred determination to lead the world as flag-bearers for free trade”, Abe stated.  And European Council President Donald Tusk, Panda reports, stated “the deal was the ‘largest bilateral trade deal ever.’”

The agreement is important as it comes at a time when both the EU and Japan, staunch allies of the United States, face increased tariffs on exports into the U.S. as a result of protectionist trade policies of the Trump Administration.

The EU Economy

The EU’s economy was ahead of the United States in 2015 with a GDP in 2015 of €14,600 billion. “With just 6.9% of the world’s population, the EU’s trade with the rest of the world accounts for around 20% of global exports and imports.”

The Japanese Economy

And as the BBC reports, Japan’s economy is the world’s third largest — with economic growth (according to the OECD) projected to edge up to 1.4% in 2017, aided by increased international trade in Asia and fiscal stimulus.

7 ways to avoid risk and capitalize on opportunity in new foreign markets

While EU-Japan Free Trade will reduce tariff barriers, making it easier for EU and Japan-based companies to do business in these respective markets – there remain significant challenges which must be understood and addressed on an ongoing basis for any firm to succeed in a market entry strategy.

Lauren Maillian, writing in Forbes, details essential strategies (1 to 5) companies should consider before developing a presence in a new international market. And Marco Calabrese, writing in Trade Ready Blog, details additional prime risks (6 and 7) to companies entering a new international market:

  1. Educate yourself on the customs and business etiquette of the international market.
  2. Gather historical data on the country’s currency value fluctuation and import/export timelines – Maillian explains how deal values can change based on currency fluctuations between the time the deal is agreed until it’s finalized.
  3. Become an expert on the country’s laws governing business.  Maillian underscores the importance of local legal counsel to navigating the export markets unique legal and regulatory environment.  (I would add to this public affairs, financial advisory and local market entry advisement).
  4. Conduct focus groups to test the waters in the prospective international market. “A new approach may be needed to make your product or service suitable to the needs and expectations of the potential foreign market”.
  5. Find out what your competition has done in the same territory.
  6. Protecting your business from political change – Calabrese cites how “the current global economy has been undergoing significant changes that have had major effects on international business.”
  7. Identify and avoid corruption – “Companies entering certain regions may be confronted with unorthodox ways of doing business. In several nations, bribery is required in order to complete trade”.

Henry Tan, Representative Director of Tricor K.K has outlined 5 Challenges Of FMNs (Foreign Multinationals) Entering The Japanese Market. And Donagh Kiernan, founder and CEO of Tenego Partnering, details some of the unique challenges foreign companies face when entering the EU market.

Looking forward

The EU-Japan free trade agreement (FTA) will provide significant new opportunities for Japanese and EU companies seeking to expand into each other’s sizable markets. As both markets are highly developed and complex, however, they’ll pose a variety of challenges to any business seeking to capitalize upon the newly agreed FTA. Despite these challenges, companies can seek to secure the assistance of local experts in market entry, legal and public affairs advisement and other specialisms tailored to the needs of a new market entrant. By securing specialized market entry assistance, companies can successfully meet the challenges they’ll face when entering the EU or Japanese market.

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Social media has made international trade more accessible

“Social media has made international trade more accessible”, says Tuck Shop Trading Co.’s Founder Lyndsay Borschke, in an interview with Jeff Brownlee of ExportWise, a publication of EDC, Canada’s export credit agency.

96% of consumers are outside the United States

This easier access via social media is important for U.S. exporters in particular — because — as Sarah Mitchell writes in ContentMarketingInstitute.com — 96% of the world’s consumers live outside the United States.  But to effectively reach overseas markets via social media, content needs to be produced for a global audience, as Mitchell details, citing an earlier article by Scott Abel.

Global internet market in excess of 2.5 billion

Mitchell details an interesting figure, citing John Yunker, “who claims the global market for international domain names (IDN) is greater that 2.5 billion people.   The same number, (⅓ of the world’s population) is active on social media, as Esther Curiel writes.

Content marketing helps open international markets

Curiel recommends, therefore, “that brands [should seek to] find their audiences in those [social] channels, where they are already spending a good portion of their online time.” And content marketing to global audiences, she details, will increase brand awareness, trust, likeability, accessibility, and engagement, and ultimately, new business leads.

Global audiences: Uniquely challenging to reach

Global audiences bring unique challenges to brands, Curiel notes. Brands, she writes, “have become adept at adapting their messages for global audiences” with the help of localization partners and translation. In order to accomplish more in international markets, therefore, brands “need to go one step further and be able to listen, react and engage” with local audiences in their language and in ways that elicit interactions.  Adapting for local business culture is also vital.  While “the challenges are significant”, Curiel explains, “so are the opportunities social media can create.”

Implications for your international business

If your business is seeking to expand in international markets, the opportunities social media presents are well worth noting.  It’s also important that the localization practices Esther Curiel details be employed as a means to expand the scope of international social media efforts.  The need to customize social media initiatives in international markets might seem obvious.  However, ensuring these efforts also always change to adapt as well as utilize best practices (while at the same time working in concert with your already existing marketing and business development efforts) is imperative if they are to realize their full potential.

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