The urge to seek new opportunities in foreign lands has shaped the sweep of history, and while the modern world is far more crowded and lacking in uncharted waters, opportunities still exist for those with the drive to seize them. That said, there is no doubt that the bar has been raised, as most pithily summarised by the inventor James Dyson: “In the past, the UK got away with selling things that weren’t unusual. Now it’s no use trying to export without having something that’s unusual and better.” It therefore makes sense to think long and hard about your ‘comparative advantage’ – what can you bring to a new market that will allow you to compete with established players, who are likely to have better knowledge of it and its local customs as well as strong relationships with the existing customer base? Innovative new products, strong technical and/or vertical specific expertise, and economies of scale, are the obvious candidates.
Putting this generic advice aside, let’s shift to a more industry-specific perspective. “Two-way radio is relatively straightforward,” says Leigh Hope, managing director at Airsys. “Right across the globe the same two-way radios get sold and you don’t have to change the product a huge amount from one country to another.”
That said, the availability of spectrum and variations in the effort and cost required to obtain the equivalent of Business Radio licences have great influence on which radio technologies and products are in most demand. Let’s take France, for example.
“The French market is very different to the UK, German and Italian markets,” says Robert Bosman, business development manager (Europe) at Syndico Distribution (France office). “The PMR frequency spectrums are different in terms of their costs and how they are used, private licences – which are quite scarce these days – can be quite expensive as well, and that’s why [PMR446] is a very popular sector in the French two-way radio industry because it is licence[-exempt]… especially hospitality, even factories and things like that or outdoor arenas and events and so on.”
It's also worth noting that cultural differences can have a marked impact on different sectors’ need for two-way radios. Bosman says: “Where we are successful in certain verticals in the UK, we cannot replicate that in France. For instance, there are no Pubwatch [schemes] like we have in the UK because the French have a completely different drinking culture compared to the UK or Germany. In shopping malls in the UK, you’ll see security guards walking around with radios and things like that; in certain parts of France you don’t have that at all.”
In addition, some of the other products the UK two-way radio channel sells can run afoul of country-specific legislation. Body-worn video cameras are the prime example of this. “There’s quite a lot of legislation that says you cannot record somebody in France without their explicit permission,” says Bosman. “It’s the same in Germany and some other countries, but this is starting to change [in France] due to the security situation.”
Bosman adds that PTT over Cellular (PoC) adoption in France is “very much in its infancy”, but “we are starting to get more and more PoC inquiries [and it’s] slowly but surely becoming an option for the French channel. If you speak to some of the Italian radio dealers, they’re not familiar with PoC at all.”
Hit the books
Given the above, it’s perhaps no surprise that Adam Liardet, managing director at Audax Global Solutions (a company specialising in body-worn video cameras), emphasises the importance of doing as much research as possible beforehand and that this should “include market research, competitor research, customer needs, wishes, wants, desires, pricing strategy, ensuring your product meets the needs and provides benefits to the customer in that particular country. Don’t assume because your product has ‘flown off the shelves’ in one country that it will in another.”
Liardet also highlights the importance of respecting your new market’s culture and the difference between it and your own. Airsys’s Hope makes a similar point: “You need to adapt to the place where you’re selling, as opposed to expecting it to adapt to you.”
Fortunately, there are plenty of books written on the subject of doing business across cultures that can help you avoid making some of the more cringeworthy mistakes. Aside from matters of etiquette and understanding the extent to which opinions are stated directly or indirectly, it’s important to understand attitudes towards decision-making, hierarchy and the flow of information. For example, Cameron O'Neill, Riedel Communications’ director – APAC, says that at some of the Chinese events he has worked on, radios may as well be ‘one-way’ rather than two-way, as they tend to be used by managers/supervisors to speak to their workers and not the other way around.
While research can definitely help, it can only get you so far – especially given the problem of ‘unknown unknowns’ – if there is an issue that you need to understand but aren’t aware of, it can be easily missed. For this and other reasons, it is important to get as much help as possible from local experts and agencies and the UK organisations that are there to help companies like yours expand into overseas markets. Examples of the latter include the Department for International Trade (especially its www.great.gov.uk website, which has a great deal of export-related advice and allows you to access several export services) and TechUK.
Entering an overseas market can be done in a number of ways and these require varying levels of commitment and resources. Airsys’s Hope says the simplest and most straightforward approach is to set up an online shop as this only requires you to “know the rules and regulations” of the country you’re selling into. He adds that creating a subsidiary is a much more complex affair, requiring advance planning, a proper business plan and a “myriad of advisors that are based in the country – experts that understand local tax law, employment law, and export/import regulations”.
At a minimum, he highlights the need for an export/import agent, given the potential to run afoul of licensing laws. He adds that a “classic” potential pitfall to be aware of are “huge withholding taxes” that can wipe out your profit when you try to take money out of the country you’ve expanded into. It’s worth noting that it’s possible to have an office abroad while still just being a UK company (more on this later). There is also the need to localise your IT systems, invoices, order conformations and tax-law-associated documentation for your new market – the way in which many radio products come with multi-lingual instruction booklets means this doesn’t always extend to the products you are selling.
It is important to remember that success doesn’t come overnight, as Liardet makes clear. “Adapt and remain flexible, but most importantly have a passion about what you do, your brand and the people around you. Go as a short-term volume ‘box shifter’ and you will fail. I have focused my efforts on four countries/regions, two of them have taken over two years before I started to see success; [I have invested more than eight years of effort in the other two] and I haven’t given up.”
Another factor that you need to consider is that of currency fluctuations. Airsys’s Hope highlights the current weaknesses of pound sterling against the euro and the US dollar, which makes UK exports more competitive than would otherwise be the case. However, it is important to consider the extent to which your input costs are priced in other countries’ currencies.
Destination France
Now that we have looked at the factors that need to be considered when looking to sell abroad, let’s take a more in-depth look at one company’s efforts in this area. Back in March last year we reported that Syndico became Hytera’s official distributor in France – and the company’s Bosman says that when this contract was awarded, “we started to look at the various options, [and] as opening offices outside your normal territory of operation brings a lot of challenges in terms of cost, regulations, leases and the local laws of the country, the quickest way for us to enter the French market was to look at our existing partners in France”.
He adds: “It just so happened that Andy Wilson [Syndico’s managing director] had a long-term relationship with a company called Mobile Team, based in Dijon. Andy asked [it] what was involved” – and Mobile Team said that it had spare offices within its building and could rent Syndico office space for a year, allowing it to test the waters without entering into a long-term contract with an unknown landlord.
“Once we moved into our office in Dijon, we needed to set up, we needed a French website – we’ve just launched a LinkedIn page in the French language too – and then the third step was to introduce ourselves into the French market and start making the case for why Syndico is in France [and] what our goals and [strategy] are.” It’s worth noting here that Syndico France is a UK company with a UK office in France, rather than a registered French company – as the latter approach would have been more complex– “you [would] have to start employing local accountants and things like that,” says Bosman.
Winning hearts and minds
“[We then had to introduce ourselves] to the French channel,” he adds, before explaining that there was some confusion in the market as a pre-existing French distributor had previously held the contract – and “when a new player comes to the market, everyone starts asking lots of questions”. This was especially the case, given the historical rivalry that persists between our two nations (for more on this, I recommend 1,000 Years of Annoying the French by Stephen Clarke) and the language barrier – in the French two-way market, English is not widely spoken, and while Bosman speaks German and Dutch fluently, French is something he “battles with”.
So, faced with these obstacles, how did Bosman respond? “I’ve turned this negative atmosphere into a win-win situation and I’ve done that by showing them that they can trust us, I’ve done a lot of lead generation which has led to them expanding their customer base, I’ve supported them from a technical point of view, [providing a] very quick turnaround as far as questions are concerned. My philosophy is to try and be in front of the dealers or our customers as often as possible and to show them that we are there to help them support their businesses. We carry a large volume of stock so our deliveries are very quick; we try to deliver within 48 to 72 hours, which we’ve made a big noise about, and we’ve proved to the channel that we can deliver within 72 hours.”
He credits the “significant” and “profound” growth that Syndico has seen in France to this approach and the face-to-face time he has spent with French two-way radio dealers. So far so good, but what about Brexit? “[It’s] a bit of an unknown for everyone,” says Bosman. “In terms of dealing with the paperwork and the bureaucracy, we’re well set up to handle that. The only thing that concerns us is potentially if we need to ship large volumes of product over to France and we have to send them by road, we could get stuck with delays at maybe Dover or Folkestone and we don’t know what tariffs might be imposed on goods coming into the EU from the UK in future. I believe that any prospective or planned tariffs on radio equipment [will] not be very high. Obviously, there will be an impact on the RRP price and that could impact on the margins that dealers make, but it’s very much a case of let’s wait and see what the UK decides to do.
“We’ve had some scenario discussions; [if] Brexit really gets bad for [our] business, [would] there [be] a case to open up a Syndico warehouse in France or [in Europe] that could service the EU, whereby our products would come direct from our suppliers straight into the warehouse in the EU? But until we know what Brexit is going to look like, it’s all just speculation at the moment. It is important for us to think about though, we are of course Hytera’s authorised France distributor but we’re also Savox’s European Master Distributor. We currently supply Savox Vigilite products (low-cost audio accessories) to most countries in Europe.”
While Brexit is perhaps less of an issue for France than the UK, it does have problems of its own, as Bosman explains: “France has unemployment of more than 10 per cent at the moment [and it has] all sorts of social issues; every weekend we have protests around the country, even the police are out protesting, so it’s quite challenging.”
I hope that this has given you a feel for the practicalities of selling abroad, and if you’re now considering doing so, I wish you the best of luck; just remember – you don’t have to do it alone.
