The SME opportunity in a connected world

A look at Pakistan’s declining export trends may suggest that there is not much that can be exported. As the situation stands, our exports have largely focused on three sectors; textile (and allied products), vegetables and leather products, which put together contributed nearly 78% of the total exports in 2015.

For many years and especially post 9/11, Pakistani exporters faced a lot of perception challenges. Although these challenges have not completely gone away, following the CPEC initiative, there is a renewed global interest in Pakistan’s economy.

A number of international brands are keen to enter the sixth largest market in the world. At the same time, importers around the world are looking at what Pakistan has to offer. Having worked with Pakistani brands in diverse categories, as well as with international business houses, I believe that there are a lot of untapped opportunities.

Despite the challenges, a number of Pakistani brands have posted steady growth in the domestic market; they have also ventured into international markets and established a substantial footprint. Among these brands are English Biscuit Manufacturers, National Foods and Shan. Recently, brands such as Khaadi and Sana Safinaz have also carved a niche for themselves internationally.

Digital has opened up a lot of opportunities for SMEs and start-ups around the world. It is a great opportunity for them to leverage this with the right product offerings. It would be great to see more brands doing Pakistan proud in the international markets.

These brands started to look outwards, having firmly secured their home base and achieved scale locally. Now, with the evolution of digital platforms, small and medium enterprises (SMEs) can also look at going global even before consolidating in the domestic market.

In terms of categories where SMEs can have global ambitions, agri-based categories, such as fruit and vegetables, packaged FMCGs (food and non-food), consumer durables, fashion and clothing, as well as B2B categories, are a few examples.

Over the past few years, the rise in e-commerce based businesses has levelled the playing field and a technology-based brand can be developed anywhere in the world – and this is a great opportunity for SMEs and start-ups. A good example is Skype, which was developed in Estonia, gained worldwide acceptance, and was acquired by Microsoft. Uber and Careem originated in the US and the Middle East respectively, but quickly expanded around the world with a mobile app powering a successful on-ground business. The opportunity to quickly scale up is huge in this area.

Irrespective of the category, once a brand has done the necessary groundwork in terms of market potential assessment, and decides to enter a market, some key considerations need to be taken into account.

1. Get the product offering right

Although your product may be doing well in the local market, you need to be brutally honest about how the product will stand the test of competition in the international market. Product features may need to be tweaked or revamped.

2. Good packaging is worth a thousand words

In the case of packaged consumer goods, having world-class packaging in terms of visual appeal, as well as functionality, is critical. There are regulatory guidelines in different markets which require companies to display key information such as ingredient and nutritional information as well as descriptions in the local language.

3. Selecting the right route-to-market model

This is a make-or-break decision. Getting the model right is the foundation on which the business will be built in the international market. Depending upon the stage the brand is at, options can range from setting up operations to appointing a distributor, a franchisee (in case of a retail brand), a joint venture partner or a drop shipping arrangement. The latter is very popular with international e-commerce portals as they do not carry inventory but fulfil customer orders through a third-party which holds the inventory. E-commerce websites like Alibaba also work very effectively for all kinds of product categories and in connecting exporters with buyers around the world. The route-to-market choice needs to be made extremely carefully, taking into account all the pros and cons.

Over the past few years, the rise in e-commerce based businesses has levelled the playing field and a technology-based brand can be developed anywhere in the world – and this is a great opportunity for SMEs and start-ups. A good example is Skype, which was developed in Estonia, gained worldwide acceptance, and was acquired by Microsoft.

4. Consumer segments: Look beyond the diaspora

So far, Pakistani brands that have done well internationally have usually achieved their success by effectively targeting the Pakistani diaspora, or at best, consumers from the region. While this will always remain an attractive segment considering their association with the brands, it is just the tip of the iceberg in terms of the opportunity. In this context, digital products and services in particular have a huge opportunity to target different segments with their offerings.

As for leveraging the digital platform internationally, here are some of the areas SMEs should focus on. These indicators apply to building a business anywhere in the world, but assume much more importance considering that the brand may not yet have a physical presence in these markets.

The first step: A professional website

Irrespective of the type of business you are in, when you look at international markets, a professionally-designed website is worth its weight in gold; it lends credibility to the business as this is (more often than not) the first point of contact between potential customers and you. The website should be SEO friendly, with the right keywords included in the content. Make sure that there is a mechanism to promptly respond to queries. It is also important to pay close attention to website analytics to understand where the hits are coming from. Here, I would like to give the example of a client company we work with, based in Kenya. This client had visited the website of a Pakistani personal care brand (which was not into exports). Once we connected our Kenyan client to this personal care brand, the latter was eventually able to extend its business to a new export market.

Leverage social media and e-commerce power

Based on the type of product, the selection of an appropriate platform can contribute significantly in building the brand. Platforms like Facebook and Instagram can be effectively used to share content relevant to the local market and build engagement; platforms like YouTube can be used to share video content. It is also a great platform to share demos and information for B2C brands. For B2B categories, LinkedIn has made life significantly easier for exporters.

Quality of content matters

Whether it is your website, YouTube or Facebook accounts, attention needs to be given to the quality of the content, because this is what creates engagement and builds the brand’s perception. It can be tempting to cut corners here, but going the extra mile and spending a little extra will pay off in the long run. A well-designed visual, an infographic or a good voice-over describing a product can make all the difference.

SEO your way to success

A well-designed SEO strategy can be a true game-changer and brands which invest in focused SEO initiatives can dramatically improve their rankings in the search results.

Digital has opened up a lot of opportunities for SMEs and start-ups around the world. It is a great opportunity for them to leverage this with the right product offerings. It would be great to see more brands doing Pakistan proud in the international markets.

Afzal Shahabuddin is Managing Director, Resource Edge, an international business and marketing consulting company.
afzal.shahabuddin@resourcedge.com.pk