Tom Miller, who manages our Government-funded UK-APAC Tech Growth Programme, spoke to our market expansion specialists and asked them for their top piece of advice for a UK company wanting to do business in the region.
Where in the world do you have massive, advanced, industrialised economies AND massive, fast-growing developing economies, both equally keen to integrate and deploy UK-developed technologies?
APAC.
The business opportunities in APAC are enormous. Chances are you are now or have recently discussed an APAC strategy, but where do you start? And how do you minimise your risks and optimise your time and effort?
Securing customers and partners in APAC requires the right mindset and preparation. Nobody knows the region as well as someone who lived and worked there, so I spoke to seven of my colleagues who have been closing deals between the UK and APAC for decades and asked them for one tip each for a UK business considering the APAC market:
1. In Korea, the right partners are key
Soyeon Kim has been selling and licensing technology in Korea for a decade and is Head of our Aerospace & Defence Practice. She highlighted the importance of an on-the-ground partner - especially in highly technical and regulated industries.
“For UK companies to participate in the Korean aerospace and defence sectors, the first step is to form a strategic partnership with a Korean counterpart.
“The Korean Defense Acquisition Program Administration (DAPA) has a ‘Buy Korea Defense’ programme. UK tech is highly regarded but UK companies must form a JV with a Korean company or become part of a Korean consortium to be considered as a supplier – you can’t do it alone.
“For example, London-based OneWeb received a £230 million investment from Korea’s Hanwha Systems to build an Asia-specific product combining the former’s software stack and services with the latter’s satellite antenna tech.
“Another example is a consortium formed to develop the Korea Positioning System. The lead company, LIG Nex 1, is constantly on the look-out for international firms with a track record from the GPS or Galileo systems.”
Jonathan Cleave, our Seoul-based APAC Managing Director, agrees with the importance of partners in Korea, but urges caution.
“When deploying a channel sales strategy, it’s important to scrutinise the competency of your partner, support their efforts in-market and not be dazzled by big names.
“Recently, we’ve had a few international clients who have come to us with partnerships in place with large Korean corporates’ subsidiaries – but disappointing sales results.
“We see this particularly for industrial digitisation and process optimisation solutions.
“Consider this: a conglomerate is well-established in a traditional industry and decides to set up a value-added reseller business based on our western client’s SaaS solution. There’s a clear synergy with other parts of the conglomerate’s business, so it plans first to sell the product to its subsidiaries where they should, in theory, face less resistance. Then they’ll target the broader market once they’ve established reference cases.
“The problem is that the conglomerate typically transfers salespeople from other parts of its organisation with no relevant sales experience nor network in the business units they now need to target, and little experience in generating a sales pipeline from scratch.
“It's essential to understand your Korean partner’s true capability before signing a channel agreement – especially an exclusive one. This means interviewing the sales teams, not just the managers, and providing external business development support for an initial period to help the Korean partner gain its first foothold in the market.”
2. Taiwanese companies take risks
In Taipei, instead of Korea’s preferred channel partner or consortium approach – technology rules.
Stewart Randall, our Director of Operations for China & Taiwan, put it like this:
“While in many countries in Asia Pacific relationships are as important to winning a deal as your product’s performance, this is rarely the case in Taiwan. While relationships can help, your technology is vital.
“And large Taiwanese corporations are generally willing to be the first to try new technologies.
“We once licensed a client’s technology to a large Taiwanese company after only two meetings with the engineering team and a few email exchanges with purchasing. This technology is now running in the background of all 7-Eleven convenience stores throughout Taiwan.
“Another client partnered with a Taiwanese company to produce tech evaluation kits when companies elsewhere in Asia hesitated. Taiwanese companies are simply less risk-averse.
“It's also important to remember that, although Taiwan is a small consumer market, many of its companies are global. Foxconn, TSMC, MediaTek, Asus, HTC, Pegatron and Wistron, amongst others, are huge global businesses – and strategic decisions are usually made at the HQ in Taipei.
“Finally, while the intense customer and partner management that’s essential elsewhere in Asia is less important in Taiwan, you still need a team on the ground to spend valuable face-to-face time with the decision-makers.
“So, if you’re a promising, young tech company – especially in semiconductors or electronics – but are still building your commercial track record, consider Taiwan. You’ll find customers keen to try out new things, which might just be what you needed to gain a foothold in APAC and other global markets.”
3. Singapore is an important tech hub – and Southeast Asia is catching up too!
Singapore needs no introduction as Asia Pacific’s trade and finance centre – but its image as a high-value market for high-end technology may be a bit less obvious.
Vanessa Chong from our Singapore office gave these insights into this highly focused, regulated and influential regional hub.
“Despite its relatively small market size, Singapore plays a central role in APAC and is often described as the ‘marketplace’ for business in the broader region - especially because of its high concentration of regional influencers and decision makers. But, before you take the plunge, consider the following points.
“Singapore has a government-driven, long-term technological and economic agenda – and understanding its key initiatives will meaningfully help your expansion plans.
“For instance, the Singapore Food Agency (SFA) rolled out the “30 by 30” initiative in 2019 to develop a more resilient food system. This includes regulatory support for cultivated meat and, in fact, Singapore was first in the world to approve the sale of lab-grown meat. So, innovators in the foodtech and agtech spaces would do well to put Singapore on their radars.
“In terms of the deep tech sector, and subsectors such as medical devices, regulations are rigorous compared with neighbouring ASEAN countries. So, it’s critical to connect with in-market experts to understand your opportunity and hurdles.
“Singapore knows how to promote itself through a huge number of events and conferences – and you should attend them to network with influential contacts and get a handle on the best approach to take. In addition to large pan-Asian conferences such as Asia Tech X Singapore, it’s worthwhile visiting the more targeted, deep-dive events frequently organised by innovation ecosystem players such as SGInnovate.”
Our work in Southeast Asia as part of the UK government-sponsored UK-APAC Tech Growth Programme is supported by our pan-SE Asia partner, Orissa International.
Orissa’s Managing Director, Sarath Menon, has over a quarter-century of experience developing business across ASEAN. His comments:
“In navigating the Southeast Asian tech market, remember that a one-size-fits-all approach won’t work. Precision is paramount in Singapore, so take a straightforward stance and highlight how your innovation delivers tangible benefits. This not only captures attention but resonates with Singapore's business culture, where efficiency is highly valued.
“However, when addressing emerging markets in Southeast Asia such as Malaysia or Indonesia, a more nuanced approach becomes essential.
“As technological adoption in these markets is comparatively less mature (though steadily increasing!), diving directly into business discussions might not be the most effective strategy.
“Instead, invest time in getting to know potential partners, understanding their needs and level of technology readiness, and demonstrating a genuine commitment to mutual success.
“This will establish a solid foundation for collaboration.”
4. Japan does things its own way
Japan is another country where cultivating connections is paramount – but the way to you go about it can be baffling to the uninitiated. Take the concept of nemawashi (根回し) – an informal process of decision-making where key aspects of a deal are agreed through back channels prior to the ‘handshake meeting’ to avoid any participant losing face.
But there’s another kind of relationship you should know about when dealing with Japanese customers.
Oren Bernstein, Head of our Software & Cloud Practice, says:
“Companies looking to enter the Japanese market must realise that a business model that has proven successful in the UK or elsewhere may not fly in Japan.
“For instance, software companies that engage in direct sales to their corporate customers will find Japanese companies don’t always have the in-house technical expertise you’d expect. And the teams you’re targeting at these organisations may not deal directly with the problems your services address.
“This is because Japanese enterprises form special partnerships with their system integrators, managed service providers and other technology partners. The goal is to have a high-quality implementation with a minimum of value-added costs borne by both the end-user and the service provider – achieved through the economies of scale of their partner.
“The organisations work in a ‘see-through’ supply chain, sharing responsibilities and decision making. Often these partners aren’t truly ‘third parties’ at all but affiliated companies or subsidiaries.
“So, while you may want to sell to Hitachi Ltd., for example, that deal may best be done via its subsidiary, Hitachi Solutions.
“This adds a layer of complexity as you need to understand which service providers have strong relationships within which industrial groups, and which have strengths within your key verticals.
“Your partners may end up being your biggest customers and you may need multiple channels to help you cover the whole market.
“So, before you attempt to sell your offering directly to enterprise customers in Japan, ask yourself, ’Would I be better off selling through a service provider that can capitalise on their established customer relationships?’
The answer is often ‘Yes!’”.
Alecia Thomson, Business Development Director for our Medtech & Life Sciences practice and a 28-year Japan resident, agrees that established market models need to be adapted to fit their new surroundings:
“Japan’s healthcare system, for example, diverges from the GP model of the UK and other Commonwealth countries – a fact that many of our clients overlook.
“What often goes most unnoticed is the fragmented nature of patient medical data.
“In Japan, patients can visit any clinic or hospital. But their medical records remain within a specific healthcare institution, only shared in exceptional circumstances. This decentralised approach sets Japan's healthcare system apart and underscores the challenges of introducing international solutions.
“While the UK boasts the NHS App as a comprehensive patient-to-healthcare provider platform, Japan relies on traditional methods. Prescriptions are written on paper and physically taken to pharmacies. And a considerable amount of data entry is performed by hand, burdening nurses.
“So, the country has a way to go in the digitisation of its healthcare system. But this has to change because of the growing burden of its fast-ageing society. Finding clever ways to apply cutting-edge technology is a big opportunity for digital healthcare companies – provided you’re willing to adapt your model and work with the local stakeholders and regulators.
“Healthcare is just one example. The message is you should shed any assumptions that the business model you’re familiar with will translate neatly to Japan – or any other APAC market. Do your homework and be ready to adapt.”
Summary
There’s a good deal here to digest, but the main takeaways:
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APAC isn’t homogenous - each Asia Pacific market has its own challenges and there’s no one-size-fits-all approach
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Working through trusted partners is key, especially in markets like Korea and Japan, but take time and spend the effort to find the right ones
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Take advantage of global tech hubs like Taiwan or Singapore – deals done there can have positive regional (or even global) spill-over effects
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The fact that you know the inner workings of your industry at home doesn’t mean it will work the same way. APAC markets have quirks and unique regulatory frameworks and are driven by diverse political and economic policies – so make sure to swot up
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Surround yourself with people who’ve ‘been there, done that’ to hone your strategy
Luckily, you may not have to look far for the support you need.
Our UK-APAC Tech Growth Programme can provide in-market business development initiatives and a host of other support. If you’re a UK firm and have APAC in your sights, sign up here.