International Expansion - Is it right for your brand?
International Expansion – Is it right for your brand?
The main growth levers for brands are to:
Offer more products
Sell into more channels
Penetrate deeper into existing channels
Reach more countries / languages
Picking the right areas to focus on is highly context dependent, and I’ve heard different strategies from different operators.
So, does it make sense for your brand to expand internationally? Let’s look at some examples.
Wild (Deodorant / Consumables)
Verdict: Yes ✅
Wild Founder Freddy Ward (acquired by Unilever) last month, mentioned on the Operators podcast that Hello Fresh expanded into 8 markets within their first year, and Wild.
Wild, founded in 2019, was already investing into international growth into the EU within 6 months of their launch.
Being a UK based founder, Freddy really emphasized the advantages of expanding early when your business is more simple. The larger your product line, the more of a headache it is to expand. At the time of Wild’s expansion, they likely only had a handful of SKU’s. Now, if you look at Wild’s website, you’ll see plenty more SKU’s. If they had decided to wait until now to expand, it would have been a much bigger operational lift.
They were able to conduct some low-risk marketing tests, and even though CAC’s were 2-3x higher than their core UK market, they knew with some investment in local currency buying options and localized ads, they could bring this down and build a profitable international business.
Important Caveat - If you’re a USA-based brand, the consumer market is so huge that you could just focus on that market. There are other considerations as well, so what Wild did is not a one-size fits all strategy.
Full Episode -> click here
Better Nature (Food)
Verdict: No ❌
Better Nature Founder Chris Kong on BoxSeat said, “You get far more ROI by going deeper in a territory than going really broad across different territories.”
They still see plenty of green grass across the UK still, and in an industry like food which is highly regulated and differentiated, international expansion at this stage likely doesn’t provide a good ROI for them.
At the time of this episode, their channel sales broke down to roughly 90% retail, 8% food service, and 2% DTC.
For Better Nature to succeed internationally, it would require more effort than a purely DTC company.
Freak Athlete (Gym Equipment)
Verdict: Yes ✅
Case Study – [link]
I led international expansion at Freak Athlete, and now that I’ve started my own supply chain consultancy, I’ve realized we had some unique advantages that make expansion right for us.
For starters, compliance was simple. Gym equipment is not highly regulated, so we could begin importing and selling with very little headache.
Second, we had a low SKU count when we decided to expand, making inventory planning a lot simpler for us.
Third, our products are big and bulky. The savings on cost of goods sold by fulfilling orders locally was a very obvious benefit compared to fulfilling international orders from the USA.
Strategic Considerations of International Expansion
Risk Mitigation
With global geopolitics constantly unfolding, it’s a great risk mitigation strategy to have an international presence.
Size / Scale
There is no rule for how big you need to be to start exploring international markets. It can really pay dividends for your brand to conduct low-risk tests to see if international expansion makes sense. Most brands don’t know where to start, but there are plenty of consultants and platforms that will make this easy for you.
Resources
Brand Access –The E-Commerce Leader’s Guide to Scaling Internationally – [click here]
Better Nature | Boxseat – Podcast – [click here]
Operators Podcast with Wild Founder Freddy Ward – [click here]
Iron Margin - If you want help discovering whether international expansion is right for your brand, you can book a free call with us here.
