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This article is an extract from LegalVision’s Online Business Manual. Download the full Manual here.

When you’ve worked hard and reached a point where you need to expand, it’s worth considering overseas expansion. Matt Jones, CEO of Honee, created a booking platform for beauty and wellness, and he’s successfully expanding overseas. He gives tips on market validation and how to go about expanding with minimal risk and maximum value.

Expanding Overseas After Finding Product Market Fit

Honee is a discovery and booking platform for wellness, beauty and fitness services in Melbourne — think Zomato for the beauty and wellness industry. When we first started approaching service providers to sign up to our platform, we realised more than 60% of venues had no web presence.

Before we could even consider international expansion (which was crucial to our growth plan), we had to first validate our product and create a playbook for the
local market.

Market Validation in Your Home Country

When determining product-market fit, you should ask – do enough people in the market want my product?

We embedded ourselves in salons, attending team meetings and speaking with their customers to understand how the business worked. For Honee, venues saw us as an essential partner to promote their business. There was a need that our platform was directly addressing in the beauty and wellness industry.

Prepare for International Expansion

After you have tested your product and recorded some success in a local market, international expansion may be a suitable option depending on your model, budget and growth ambitions. It is important not to assume that a product or service offering in one geographic market can be easily replicated to operate in another market.

Because Honee works with beauty and wellness providers, we have to recognise that different markets will have different ideas of beauty. For instance, in Kuala Lumpur, high-end salons rarely take bookings.

Hire Locally to Develop Product-Market Fit in International Markets

Avoid relying on fly-in-fly-out talent to build your business locally. Each city is different, with its own customers and early-adopter clients. This means that product-market fit will look different in Sydney compared to Singapore.

If you are considering breaking into the Asian market, there is no substitute for getting on the ground. Get to know local talent by visiting incubators like MaGIC in Kuala Lumpur and meeting with founders of companies like Gojek in Jakarta.

Fortunately, Australians can rely on the support of a huge expat community in Singapore and Hong Kong, as well as take advantage of the government grants offered to new startups. There are no excuses for overlooking Australia’s closest neighbours when considering expansion.

If you launch overseas, take every opportunity to collect feedback from your customers. Sending short surveys to customers on your email lists can help you tailor your product offering in a new market. If you are an e-commerce business, you may also need to establish warehouses abroad and engage local couriers to ensure timely delivery of your product.

Quick Tip: Managing Risk Overseas

Managing an overseas operation from Australia can seem daunting — what if the manufacturer doesn’t deliver or the goods are poor quality? You can help avoid this scenario by taking these steps:

  • Meet suppliers in person to assess the quality of the product. If this is not possible, order the product yourself to check quality and order times.
  • Make sure your contracts include a clause that states that you own the rights to any intellectual property that the manufacturer creates before the start date of the contract. Any intellectual property created as part of the contract should be assigned to you.
  • Specify quality and delivery. If the quality of the good is poor or the delivery is slow, you should be entitled to a refund, redelivery or the right to terminate the contract.
  • Your contracts should also include a clause stating that when dealing with faulty products in Australia, the overseas manufacturer agrees to refund you or pay the cost of any damage you suffered.
This article is an extract from the ‘Setting Up Your Online Business’ chapter in LegalVision’s Online Business Manual. Read the full chapter here.
If you have any questions about starting and growing your business online, or your legal obligations when marketing on social media, you can contact LegalVision’s online business lawyers by calling 1300 544 755 or filling out the form on this page.
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