How to Use Data to Find New Markets
Deciding which market to target next is different for every business, but using multiple data sets can help to narrow the field.
“Should I target Japan or China?”
“Which country website should I create next?”
These are a few of the questions people ask me frequently. The bad news is that there is no one-size-fits-all when it comes to choosing new markets for expansion. It largely depends on the type of business. However, the good news is that data provides an excellent starting point to help narrow it down.
Here are three steps for channeling and analyzing data when exploring new market opportunities.
1. Market Size
Since opening up to a new market is costly and is accompanied by various risks, it’s good to start by making sure the market is at least big enough to justify the cost and the risk. The online market size can be measured with different metrics including the number of Internet users and the size of its e-commerce sector. Here are the top 10 countries by number of Internet users:
*Source: Internet Live Stats
This data certainly makes many of these countries look attractive. If you dig deeper, you can breakdown age groups, gender, average income, and other definitive qualities to help identify which countries have the best fit for your business. The key here is not to jump to a conclusion based on one data point. A great second point of reference is to see who is spending money online.
This graph shows the top 10 countries by online spending per person. China, which is the number one country in the world for its number of Internet users, might be risky for sales, as online spending per person is about one-third that of online shoppers in the United States. However, if you compare this data with the total size of the e-commerce industries for each country, you get a pretty clear picture of how you should be prioritizing them for your business.
2. Website Data
Even if you are not actively targeting specific countries, people may have found you and are already coming to your site. It is one of the great powers of the Internet – people from around the world can discover you, especially if you are in a niche industry. Have a look at your website analytics for key data signals such as visitor locations, visitor languages, and search engines, to see who is visiting your website, making inquiries, and most importantly, purchases.
You may be surprised to find visitors from countries that are not in the top 10 or even 20 of any of the general Internet statistics. This is more common than you think, especially for business-to-business (B2B) companies.
3. Marketing Data
Although you are looking to grow the online business, offline marketing data can give you some great insights about new countries, including your existing customer behaviors and the areas where the business is growing. I always encourage my clients to talk to employees and partners working out in the field. They encounter customers and new opportunities on a daily basis, and have great insights to the state of business and the market in each country.
Deciding which new markets or countries to target for business expansion is different for everyone. Using multiple data points is a great place to start and gives a good indication of markets where deeper feasibility analysis should be conducted. The key here is using multiple data points, rather than just one, to help narrow the field. In the process, you may also identify a market opportunity you never expected.
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