Global business opportunities play a very imperative role in boosting the world’s overall economy. International Retailing is one of a big contributor to a global economic boom in past two to three decades. Thanks to the globalization for crafting a chance for the retailers to come beyond the home boundaries with all their set up to serve international customers. But how to enter into an International Retail Market? Let’s first begin with the meaning of international retailing:
What is International Retailing?
International Retailing is a business practice conducted by the retailers to serving the customers across the national boundaries by selling products or services for their personal use. Simply, it is an international trade between the retailers and the end users of the product or service.
The process involves planning, identifying and analyzing the business opportunities in the international market and setting up all the retail activities with own management to serve globally. There are many core factors involve in this process in which retailers must have look into such as, finding and analysing a lifestyle and needs of people, product modification or packaging, global marketing research, and tactics, location to set up, legal procedures, international business ethics and laws, transportation and export procedures and the list go on. But in how many ways the retailers can enter the international market? Let’s have a look:
How to enter into International Retail Market???
There are several ways to crossing international boundaries with business interests. Below some of the choices of internationalization:
· Individual Start-Up:
Individual start-up in the international market is one of the bold steps for the retailers to take. This involves the opening a new store in outside of national boundaries with using existing brand or come up with a new brand. It has a direct control on management and operations of the store in this process. However, it has a risk to enter individually with lack of experience, study or intelligence to understand international market also, it has low rate of growth and ROI.
· Direct Export:
Direct exporting can be only applied for the products and not suitable for offering the services. Exporting the products to already established stores in a targeted international market is one of the easy ways to enter the international market through a merchandiser or an agent. This option of entering internationally has low risk of failure with high rate of growth to expand the business once the product get popular into the market.
· Take Over and Mergers :
Buyout an existing international store or company with its liabilities and risks is one of the popular way to enter into the global market. Take over the well-known and reputed store can be beneficial and easy for the retailers to set up the business as it has readymade goodwill and awareness among the local population. However, it has a high risk as there is a direct control on the management after own a store. Also it become a very expensive to take over the establish store or company. Merge into another internationally established company is one of the best way to get an access into global market. In merging process retailers cannot use the own brand name for expanding the sales.
· Joint Ventures:
This is comparably less expensive but more complicated process to enter into international market. It is an agreement between two companies whether it is international or national to invest the resources and capital for the mutual purpose of entering into the international market to expand the business. This is commonly featured by sharing the risk, ownership, returns and management. It may become more complicated practise as there may be two or more persons involved into the decisions making process.
· Franchising:
Franchising is much popular and useful way to start the business entity initially. It is best suitable for international retail business model. Majority of the franchise retailers are engaged in food and fashion brands which is easier to move. In this process, retailers buy a franchise of some popular brands and open a store internationally under single brand with certain conditions. For more expansion, retailers need to choose the best franchiser who is already well established in international market.
· Licensing:
Licensing is very easy and appropriate option to enter into global market to those who are at early stage of business and lack of knowledge, information, capital and resources. Taking authority of the store to run with owners’ terms and condition is called as licensing the business. It has no direct control over the management and operation. Licensing is advantageous to gain the overall knowledge of foreign market first and start your own after become an expert.
The above-mentioned ways are not the only options to start internationally. There are several more options are available such as project undertaken, land investment etc. retailers can adapt any of the above suitable options for their business expansion.
