Expand Asia sets its sights on bringing SMEs to Asia
Most SMEs from outside Asia realise the importance of pushing their products into this major market, but many lack the local knowledge and expertise needed to be successful.
That's where Expand Asia comes in. Set up in April by Hong Kong-based businessman Gerry Ball, the company aims to offer a helping hand to outsiders hoping to crack the Asian market.
Ball, a Briton, has set up three successful businesses in Hong Kong over the past eight years - all of which were acquired by listed companies - and decided he could best use his expertise by ensuring smaller businesses get the exposure they deserve in Asia.
"I decided that where I can add value is just to help other entrepreneurs to try and expand their business and help them have the success that I've had with my businesses," says Ball.
"All the businesses I have started, I've taken the idea from an already successful company in another part of the world and transported it to Asia," Ball says.
His last venture before Expand Asia was Benchmark magazine, which he founded in 1996. Ball had noticed that in the UK there were about half a dozen personal finance magazines, but in Hong Kong at that time there were none - with an economy that's based around finance, it was an obvious niche to fill.
"I took a concept from the UK and decided that it was a viable opportunity. And the other two businesses that I've started, one in publishing, one in training, were a similar situation - find a viable product in another marketplace and transport it to Asia. It's timing - does Asia need this? If the answer is yes, what is the competition? If there's none, then you know you're onto something good, so that's when you invest."
Benchmark was subsequently bought by Reader's Digest in 1999.
Currently, Expand Asia is targeting small and medium-sized companies in Australia and the UK, where, Ball says, "there are many very good companies that are very well managed with great products and services that we can bring here".
Ball says that despite the current economic downturn, it is still a good time to invest in Asia. "A lot of companies are concentrating on their own bottom lines in their own countries at the moment, but there's no better time to look at [setting up in Asia] than when your own domestic revenue is under pressure."
So how does it work? "We help them come here, set it up for them, give them the infrastructure and then it's up to them. One client has asked me to join the board of directors as an adviser to their company, that's great," Ball says.
"Expand Asia effectively acts as the intermediary between companies wishing to set up shop in Asia and financial/consultancy institutions. It can be a major step for small overseas companies to go to a consultant and say 'we need help running our business, we need help accessing the Asian market'. And a lot of people don't actually realise the value of utilising a third party," says Ball.
"You need someone you can trust when you're trying to buy into a market and that's what I'm trying to do here - try and help people from overseas come and look at Asia, find that they've got someone here who knows the markets and can hold their hand."
After doing a feasibility study, Ball might recommend that it might be more efficient to do a strategic alliance with another company. "For instance if a company is coming into a very competitive market and they need considerable capital to get off the ground, we would suggest an alliance with someone already settled who has the infrastructure.
"The main value proposition I can advise people is that I've been and done it and it's generally cheaper than going out and hiring one of the big four."
How do these companies get to hear about Expand Asia and its services? Mostly through personal referrals, although a number do come from inquiries over the internet, according to Ball, who adds that Expand Asia has never advertised. One success story is The Sales Training Consultancy (STC), which trains multinational companies how to sell - general sales management, presentation skills and negotiation skills. STC sales and marketing director Frank Atkinson says he met Ball via the internet. "My company is UK-based and we get contacted quite a lot by people wanting to do joint ventures. Gerry impressed me with his persistence and enthusiasm. Having looked at the Expand Asia website, Gerry obviously had an impressive track record as an entrepreneur."
Through Expand Asia, STC set up websites in Hong Kong and Singapore, then organised training courses in Hong Kong, led by STC sales trainers.
Expand Asia filled three open courses, which were attended by people from different companies, and also sold a course to real estate firm Insignia Brooke, which was run in Macau, in-house, for the directors.
"Without Gerry's support we would have been unable to work in Hong Kong and we are continuing to work together and intend running more sales courses in the future," says Atkinson.
"There is definitely a requirement in Asia for high quality training. If STC gets the strategy right over the next two years, it could become the biggest training company in Hong Kong," says Ball.
Being so new, Expand Asia is a small operation, with Ball in Hong Kong and one consultant working out of Australia. He is looking to hire more in the near future in those two countries where they know the market and could see which companies would be suitable to fill these gaps.
But it's not just about helping overseas companies - Expand Asia is also helping businesses already based in Hong Kong to grow. "Most small Asian businesses find it very hard to expand and are not sure how to go about it. Merchant banks rarely touch smaller Asian businesses, preferring to deal with large companies instead, and retail banks just do not have the commercial experience," says Ball.
"Originally I thought that 80% of my business would be bringing international companies to Hong Kong and 20% would be local businesses who want to expand in the region. It's actually probably more like 60% local companies, who want to expand but don't know how, and 40% overseas".
There are a lot of small businesses in Hong Kong that don't really have the knowledge to expand their business here, Ball says, citing the stumbling blocks of banks being unwilling to lend money to smaller firms and the high fees charged by the larger consultancy firms. A lot of the smaller companies, too, feel slightly "inferior" when approaching these larger companies, and prefer to talk to someone who's on their level, he continues. "Basically, I'm a small business too, at the end of the day."
And so what advice would he give to smaller companies looking to expand their presence in Asia?
"If you're not selling your products into Asia and you think you have a world class product, you should look at it - it may not actually involve as much investment as you think."
Expand Asia
7B Bonny View House
63 Wong Nai Chung Road
Happy Valley, Hong Kong
Tel: (852) 2526-2397
Fax: (852) 2526-0974
Email: gerryball@expandasia.com