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Associate Director, Strategy Group SEAN MCGILL
If you’re going to expand by working with a local partner, how should you go about choosing one? Sean McGill lays down some ground rules.
If you’re going to expand by working with a local partner, how should you go about choosing one? Sean McGill lays down some ground rules.
Expanding overseas is a big step to take, so it’s essential to choose your entry model carefully. Whilst the online model is lower risk, it is also impractical in some markets, especially emerging markets. Department stores can be an easy access point with large distribution but control of the brand is more problematic.
It’s fair to say that going in solo your with own stores is a big challenge to take on – which is why many retailers prefer to enter into some form of partnership arrangement or joint venture.
Choosing a partner
But how should you go about selecting who to partner with? I think there are some fairly basic points here to get started. Firstly, do they know retail? This may sound obvious but it really does reduce operational risks. Once you’ve established whether they have a history of retail experience, look at their portfolio and see how it’s fared.
Look also, at where their stores are located, because that’s normally a good indicator of the strength of a franchise partner. In some markets, location is everything. In Singapore, for example, the ability to get into the right part of the right malls is key. So you’d want to make sure you were partnering with someone who could get you into those locations.
You often fi nd that if a potential partner has three or four international brands they work with, those people are very happy to talk about it. So it’s worth taking the initiative and to contact them and ask what the partner is like to actually work with.
IN SOME MARKETS, LOCATION IS EVERYTHING. IN SINGAPORE, FOR EXAMPLE, THE ABILITY TO GET INTO THE RIGHT PART OF THE RIGHT MALLS IS KEY. SO YOU’D WANT TO MAKE SURE YOU WERE PARTNERING WITH SOMEONE WHO COULD GET YOU INTO THOSE LOCATIONS.
FOCUS 8
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