Beauty Store Business

AUG 2019

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24 August 2019 | beautystorebusiness.com EXPECT CHALLENGES The Economist Intelligence Unit report lists the Top 10 challenges businesses encounter during international expansion, as rated by the surveyed businesses. Challenges range •rom price stability and supply chain, to internal and external logistical issues, and environmental •actors. The Top 5 issues stated by these businesses were: • Socioeconomic circumstances in the target country . . . . . . . . . . . . . 23% • Exchange rate volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21% • Security and personal sa•ety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19% • Political climate in the target country . . . . . . . . . . . . . . . . . . . . . . . . . . 18% • Setting up a distribution network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18% Some o• the pit•alls o• international expansion can be avoided, however, with insight, •oresight and the right connections. Pro•essional services •irm EY's Global Capital Con•idence Barometer report on international expansion highlights issues such as not establishing a Plan B to limit risk, choosing a market based on personal contacts or geographical pre•erence, and •oreign tax and regulatory ignorance (including domestic rami•ications) as avoidable pit•alls. Furthermore, some risks may be mitigated via the right advisers, which relates to one o• the other pit•alls listed by EY: not properly recruiting, managing and integrating an e••ective management team and local work•orce. Choi, Belk and Raminella all agree that it's o• utmost importance to speak to as many experts in the territory as possible to •ind the best consultants and human resources. "Finding a person who is knowledgeable in that country is crucial and the greatest asset in terms o• the business," says Choi. "Without that person, you don't know where to start. [And beware], there are a lot o• people who say they're experts. So speak to as many people as possible and narrow [the choice] down with research and background checks." Remember that many tasks will take more time and cost more money than expected. Raminella suggests starting with the easy products and gradually moving into the ones involving complex legal and compliance regulation. She adds that it's not just the complex matters that will constrain you but the seemingly simple ones too. "Answers to even basic questions, such as, 'Can I use this symbol on the packaging?' are not readily available," she says. "Launching globally is not a part-time job." Choi concurs, saying that certi•ication can be an uphill battle in some countries. And in certain cases, you may even need to create separate SKUs or make modi•ications to products to •it the country's usage and standards. He adds that even trademarking costs can be drastically di••erent between countries, ranging •rom a couple thousand dollars to tens o• thousands. Even marketing is no easy task. "Marketing is the biggest challenge because I can't control how my product is advertised, [as] I don't know the language. I have to rely on the distributor or business that is representing our brand," he explains. "[For] your brand to thrive, it must connect to the people, the culture and the history o• the countries [in which] it wishes to build connections," concludes Belk. ■ Manyesha Batist is a reelance editor and writer based in Denver. "Launching globally is not a part-time job." –Francesca Raminella, Chie Commercial Oicer, JD Beauty Group,

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