2020 has taught us that it is certainly possible for many people, across a multitude of industries, to work from home. Through the wonder of technology, we are able to share documents, access shared files, make video calls and host online conferences, all in a matter of seconds. The world has never been as connected as it is now. But with the shift to a greater online presence, the importance of physical interaction has not diminished and the value of having a local presence cannot be underestimated.
Sure, with all things taken into consideration, the COVID-19 pandemic has necessitated extreme measures to be taken. Many airports have restricted international travel and governments have imposed various levels of lockdowns, depending on the severity of local cases. The concept of social distancing threw a massive blow to traditional means of doing business.
Be that as it may, lockdowns are gradually being eased and a number of economies are on a path to recovery. While everyone did adjust to the circumstances caused by COVID-19, it may be time to start shifting our focus back to certain offline activities. Concluding deals, meeting clients and suppliers, and signing documents, could not indefinitely be replaced by virtual transactions. Companies should now start planning how to carry out their operations, in light of the changing situation.
Doing Business in Asia
Asia’s rise over the past few decades has been characterized by constantly developing economies, vast consumer pools and an overall increase in spending power, which makes it easy to see why many foreign businesses have expanded to the region. However, the business culture in Asia is vastly different to that of the west and so too are the norms and practices. While, in recent times, business has been concluded digitally, having a local presence in Asia is all but essential, especially with the fast recovery seen in the region, in order to maintain the success of your operations.
Why Does Your Business Need a Local Presence in Asia?
The Importance of Communication and Relationships
Effective communication is a key element to any business, especially business being concluded across borders. Effective communication also paves the way for the building of relationships. In many east Asian cultures, a certain amount of social interaction may be required for a successful business relationship to be built.
For instance, in Japan a task based approach is usually adopted during the day, while the building of relationships is done at night. This form of relationship building, in a more social setting, is considered highly important to business being conducted successfully in Japan.
In South Korea, a great deal of importance is placed on building personal relationships, in order to establish trust and ultimately a good working relationship. Often business people engage in social activities after work such as dinners or drinks, where they believe the trust is built.
In China, there is a specific word for the building of relationships and networks called Guanxi. Guanxi refers to the concept of building a relationship which is mutually beneficially and operates through mutual obligations and understandings.
The nature of these relationships and how they’re formed emphasizes how important social interaction is across Asian cultures, a characteristic that should not be overlooked.
Constantly Changing Regulations and Processes
Anyone who has done business in Asia for a continuous period will be able to tell you about the vastly changing landscape of regulations and processes. Unlike in many places in the west, where procedural changes are implemented gradually, in many places in Asia, modifications to regulations and procedures occur frequently, with little warning. Without having an employee or partner on the ground, it may be difficult to stay up to date with all developments, which could lead to administrative issues arising and problems caused for your operation.
Market Dynamics in Asia
If your business has previously or is currently operating in Asia, then you know that a ‘one size fits all’ approach cannot be adopted when doing business in the region. While most companies that expand do acknowledge this in theory, often their actions seem to adopt the position of western practices being universal. Not only is there a vast difference between eastern and western business cultures, but there are also stark differences between the business cultures across Asian countries.
The pace of Asian markets also tend to move at a faster pace than western counterparts and often assumes more risk. Having knowledge on the market is necessary, however having someone with experience in it is far more valuable. When doing business in the Asian market, businesses must be agile, alert and reactive to any changes that may occur or challenges that may be faced, which may be easier to achieve with a physical local presence.
How INS Global Can Help Your Business in Asia
When doing business in Asia, it is not just business as usual. There are distinct differences with the Asian market and your home market. Finding the right partner in Asia may be challenging, but with more than 14 years’ experience and having assisted more than 300 companies, INS Global is the right partner for you. We are able to assist your enterprise across a multitude of services including employment solutions, recruitment and company formation. Contact us today and let our consultants help simply your expansion.