The potential of the US market for Asian businesses

Take a look at the top five largest companies in the world by market value and you’ll quickly notice that four out of five of them are based in the US. For decades, the country has been a hotbed of innovation and has served as fertile ground for many businesses.

It’s not just limited to hosting larger, well-established firms either – startups are doing extremely well there too. In the first eight months of last year, 58% of all new unicorns were founded in the US.

It’s clear that the country holds a wealth of opportunities for all types of businesses to succeed. For those in Asia looking to tap into new overseas markets, this makes the US an extremely attractive option.

The land of opportunity

One of the biggest factors that makes the US appealing for Asian firms is the difference in market size and population.

If the US were a country in Asia, it would be the third most populous one after China and India. That puts it ahead of many others in the region including Indonesia and Vietnam.

This is crucial: Not only does a large population mean new consumers for companies, but it’s also indicative of a deep talent pool – a boon when hiring for business expansion.

“There are some of the best universities in the world [to supply talent], and phenomenal amounts of government support as well,” says Charles Ferguson, general manager of Asia Pacific at global employment platform Globalization Partners.

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Just last year, the US was ranked third in the Global Talent Competitiveness Index, with only Singapore and Switzerland placing higher.

But that’s not all the country has to offer.

“More than half of the entire VC investment momentum in 2021 went directly into the US startup market. That is a compelling reason to have a presence in the US from an investment point of view,” says Ferguson.

Case in point, VCs invested a total of US$269 billion into startups in the US last year. In contrast, the country with the next highest amount of VC funding was China, which bagged US$60.6 billion in investments.

Should Asian companies enter the market, they could take advantage of soaring funding opportunities to boost their business even further.

A word of caution

However, Ferguson says expanding into the US won’t be “all sunshine, rainbows, and unicorns,” as it’s extremely competitive.

To set themselves ahead of competitors, businesses will have to focus strongly on brand development. Companies new to the US market have to be “crystal clear” about what their brands stand for, and that means putting the customer first in everything that they do.

“Nobody in your segment should be more committed to standing up for and satisfying the customer than you are,” Ferguson says. “And that brand promise and perception has to rise above all the noise of the competition.”

To do this, he advises companies against spending large amounts on advertising or marketing. Instead, firms from Asia should focus on going in with creativity and empathy while keeping a fresh perspective.

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Apart from this, companies will also have to be aware of certain business processes that, if managed incorrectly, could harm the company.

That’s because the US is a collection of 50 different states, which means the rules for different aspects of business operations and expansion may vary wildly between each area.

How a company establishes its corporate structure for instance – such as setting up as a sole proprietorship or limited liability company – carries different rules from state to state, and firms will need to be aware of the different regulations associated with each type.

“Before you go all in with your chips, hire someone to test the market for a little while and then start to expand,” Ferguson suggests.

By hiring people within the market itself, companies can rely on a local to familiarize themselves with different regulations and test a marketplace before exposing themselves to the full spectrum of risks that come with setting up a formal entity within the country.

Apart from that, companies should also consider partnering with a firm that can help them navigate the complexities of business expansion in the US.

In this area, employment platforms such as Globalization Partners are a huge help, as they have the expertise on how to set up in specific locations. This helps companies not only hire talent efficiently for overseas expansion but also do so with the right advice while keeping within legal boundaries.

Bringing the “Asian century” to the US

As the US market continues to grow and expand even further, Ferguson says that Asian companies should look to capitalize on the unique offerings they can bring in the coming years. One example, he highlights, is tapping into local Asian communities within the US itself as a potential source of business, as startups from Asia would already be familiar with this demographic.

Additionally, there’s a growing interest from Tier 2 and Tier 3 cities and communities in the US to attract Asian businesses, which is an incentive for firms. By hiring locals from those areas, companies can test different markets at lower costs due to specific business incentives.

“Hire someone in Georgia, Ohio, and Oregon and you’ve hit the west coast, the midwest, and the south,” he says. “Companies should capitalize on the fact that the Asian century is upon us – and America is interested.”

Globalization Partners enables companies to hire global remote teams in a matter of days with its AI-driven and fully compliant global employment platform.

Learn more about how Globalization Partners can help you with your global hiring needs by booking a demo today.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.