A Step by Step Guide to De-Risking Product Globalization

English seems to be everywhere, from overheard conversations on the streets to social media and product labels. The truth is that 78% of Internet users do not speak English as their native language, and 75% say they prefer to use apps in their local language. This demonstrates that you need to localize experiences when you go global with your product.

Product globalization was one of the main themes during the 2024 edition of Netguru’s Disruption Forum Future of Finance. We had a fascinating discussion on the subject with Yael Barak, VP of Product Management at Worldpay, and Bernard Golko, GM & Acting Management Board Member at Solution One Fund.

Globalizing applications – what does it mean?

Globalization refers to the process where applications show information to users in line with their cultural conventions, across different countries. This means that a person in one region will see errors, interface elements, and text/video in the language they want.

Globalized products go through two phases.

The first one is internationalization, which accounts for multiple cultural aspects. The second one is localization, where content is translated and all features are checked for regional conventions (think of things like dates, scales, etc.).

Source: Medium

Pros of entering new markets

Access to new customer demographics

If you feel you have exhausted the potential of your local market, one of the biggest advantages of launching on a global scale is accessing a new pool of customers. You could either find a similar user group in a different market that previously hadn’t had access to your product/service or diversify. The latter means focusing on a more exclusive target audience. A larger market means larger profits – if you get everything right.

Diversification of risks and revenues

In the modern world, things don’t always go as planned. There are events we have no control over. For example, legislation might be put in place that will dramatically impact your business in one of the countries you operate in.

However, if you sell in multiple markets, you’ll be able to compensate for the loss by performing successfully in the global marketplace. Also, you could decide to introduce a completely new product or service, which you’ll sell to a different target audience to minimize risks, diversify your revenue, and improve your competitive advantage.

More sales and profits

Product globalization is a great opportunity for generating extra income streams. To make sure your products sell outside your local market, you might have to make some adjustments. These could relate to offering new payment options, modifying customer support, or adding a new feature. While it might call for additional investment, it will pay off in higher profits and client satisfaction.

Opportunity to penetrate a specific niche

Going for the global marketplace can play out in your favor regardless of the competitor landscape. How so?

If you offer something fresh, your name could become synonymous with your niche worldwide – picture becoming the Google or the Photoshop of whatever you offer. This would make it much harder for future competitors to ‘steal’ a part of the market from you.

Assuming you’re not launching a completely new product, you can still win by going public on an international scale. Even if you can’t dominate the niche in the most competitive markets, you might win on those that aren’t as saturated – or even lack what you offer.

Access to more investment opportunities and capital

From a founder’s perspective, this is probably the most encouraging benefit of all. When you decide to go beyond your market – or even business region – you boost your chances of securing funding.

For example, if you’re a European startup entering the MENA region, you might be able to find investors or potential partnerships from state-funded VCs in countries like Qatar, Saudi, or the Emirates.

And the more capital you raise, the more attention you can pay to creating the best localized experiences for users.

Key considerations when thinking about product expansion into new markets

Here’s a list of the few main questions that Yael Barak says every decision-maker needs to ask themselves before going international.

How similar is the customer in the expansion markets?

The more they differ, the higher the chances you’ll need to build your customer personas from scratch. This largely comes down to cultural context and what people, society-wise, assign the most value to. To put it more bluntly, your most popular feature in one market might have little significance in another.

A perfect example of this is how you would have to go about launching a financial app in Muslim-dominated markets. In Shariah law (Islamic financial law), interest on loans is considered haram (forbidden), based on the principle of riba (exploitative gain). Including such a feature could not only offend users but also get you banned from the market. As you can see, research is key before making any expansion plans.

Does my product need to be supported in different languages?

As of 2024, there are 101 different countries that recognize more than one official language. So, the more markets you enter, the more frequently you’ll need to consider which languages to support.

Take Switzerland, which has four official languages. Launching a German version would only cover 62% of the population – can you risk ignoring the remaining three languages? It’s not always about choosing a language everyone can understand, but considering how the prioritization of one language over the other could affect users.

Does the regulatory environment require significant changes to my product set or operating model?

Unfortunately, the global economy doesn’t mean total unification. If you sell in multiple markets you’ll have to abide by local laws. Let’s imagine you run a business in the US and China.

Here is how these two markets differ:

As you can see, you’d most probably have to make a few adjustments if you wanted to sell your products in a market as stringent as China.

Do I have partners that will support me in entering a new market?

Globalization has definitely made the world more interconnected, making entering foreign markets a crucial strategy for growth. Diving into the ‘unknown’ is tempting but not without challenges.

It’s always better to team up with a partner or a local player, who’ll help you navigate the unfamiliar market. They understand the market dynamics and will tell you how to adjust your product or service to fit local tastes.

If you consider how competitive the global marketplace is, entering a strategic partnership is truly necessary for effective market expansion. Not only will it spare you from a few costly mistakes, but also help you gain market share and enhance your purchasing power.

Is there a partner that can support me in multiple markets?

If you want to enter tens of markets simultaneously, choosing a local partner in each market isn’t your only option. There are plenty of services that help companies not only with paperwork and setting up your local branch (if needed), but also those that can help localize your app.

I recommend looking for a partner who’s helped companies in your sector before.

Going with this approach will spare you a lot of time in the future, as you won’t have to start over from scratch every time you enter a new market.

How to lower the risk when entering a new market

Yael Barak says it’s best to go with a gradual approach to enable learning, adaptation, and pivoting, if necessary.

“When you're trying to go global, the lowest risk you can take is partnering,” she says.

To find the right partner, consider aspects like their reputation, communication skills, whether there is a target audience overlap, and if they share values with you. All of these are important if you want to make this partnership work.

Here are some additional tactics Yael suggested to minimize the risks that come with product globalization:

• Check if you can set up your infrastructure, local entities, and finance operations. Some markets are more closed off than others – or, they might be open, but have high costs like tax on foreign investments. Also, check if you genuinely need to set up a local office (you probably won’t if you’re from the EU and expanding to other European markets, but otherwise, it might be compulsory). Simply, it needs to make sense from a business perspective.
• Find a company on the market you want to enter and launch with them. Assess the market reception pretty quickly to decide if the perspective looks promising, or if it’s too risky to continue your expansion.
• Optimize and continue your expansion – assuming, of course, that you’re happy with the market reception. At this stage, you could start considering things like setting up a permanent branch (and if so, whether you should have a local representative for each type of function, or handle some work remotely).
  
  

Taking a step-by-step approach allows you to de-risk the process as much as possible. You might discover that you don’t want to invest in that market after all and decide to keep the partner to get some market coverage.

Achieve international scale through local partnerships

To cite our Disruption Forum guest, Bernard Golko, GM & Acting Management Board Member at Solution One Fund, “understanding the heartbeat of the market is key”.

Markets that offer a favorable entrance point have a few common characteristics, like a culturally and linguistically-unified population and a network of local business partners. Most importantly, the country must also have legislation that is not only investor-friendly, but also makes it relatively easy to achieve regulatory compliance. To sum up, product globalization isn’t an easy process, so take it one step at a time.