When is the right time to expand your business into new markets? In the UK we have one of the most advanced online markets in the world but it is also one of the most saturated. Bringing your business to a new market provides an excellent opportunity to reach out to new customers and increase revenues.

However, entering a new and unfamiliar market is rarely as easy as making a carbon copy of your current set up in a different country. Online audiences behave very differently depending on the region you are trying to enter and this will affect how you implement your digital strategy. It is folly to assume that what works in one country will work equally well in another.

Let’s take the electronics retail space as an example. You might already have a booming business in the UK selling computers, laptops and gadget accessories. Given the growing competition in the UK market and to spread risk you may seek to expand your business into new markets such as the US, Australia or Brazil. How are you going to attract customers to your website in these new markets?

Using clickstream data we can see very quickly that sources of traffic to electronics retailers varies massively depending on which market you are in.

What this chart shows is how each regional market relies on different channels to drive traffic. In the UK for example electronics retailers are heavily reliant on search to drive traffic with 40% of all clicks coming from a search engine in July 2012. In Brazil on the other hand only 23% of clicks come from search, but 10% come from social networks and 6% from email. Compared to the UK, Internet users in Brazil are almost twice as likely to come to an electronics website via a social network, and four times as likely to come via email. Put simply, a search strategy in Brazil is not going to have nearly the same impact as it would in the UK, so more investment would need to be put into social and email marketing in order to gain traction in Brazil.

On the other hand breaking into the Australian market would require more of an emphasis on your search strategy. Over 43% of clicks coming to electronics retailers in Australia came from a search engine in July 2012 – the most reliant market on search overall. Interestingly when we look at the paid rates of search clicks driving traffic to electronics retailers in Australia they are significantly lower than in the other markets.

You can see from this chart that the average paid rate of a search click in Australia is around 16%, compared to 31% for the UK, 34% for the US and a massive 49% for Brazil. Paid search would be an ideal opportunity to get traffic quickly in the Australian market and would also be less competitive than in other markets meaning the average cost-per-click would be much lower.

This is just one example of how using market analysis and insight can highlight the key differences between regions and countries. At Experian Hitwise we are launching a new Market Analysis: International Expansion Report which can be conducted on any online sector and provides you with tailored insights on your specified region. You can find out more about the report by downloading our one page summary.

There are many benefits to be gained from successfully expanding your business into a new region but if you are ill prepared it can prove a costly exercise. Understanding how different populations behave is crucial if you are to make your international expansion profitable for your business.

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