The events of the past years have prompted many companies to change their strategies for achieving their goals. Alongside realizing opportunities in the local market, they have strengthened their national expansion and shifted their development focus toward CAC. Today, countries like Uzbekistan, Kazakhstan, and Azerbaijan are experiencing an influx of new players in the market and becoming alternative platforms for development.
Entering a new territory entails a high degree of uncertainty for a company. Economic, legal, and tax differences, along with cultural distinctions, present significant challenges for any business.
To mitigate some of the risks associated with legislative differences, companies utilize ready-made outsourcing solutions offered by the local market. However, encountering the local reality can be quite surprising.
What challenges do companies face in these markets?
Cultural Differences
Another challenge for newcomers to the market is cultural differences. Different cultures have different customs, rhythms, rules of behavior, and attitudes towards men and women. You might find that your status, which you could have overlooked in another situation, becomes very important. In some places, your connections and friends will be crucial, while elsewhere, only your achievements matter.
Adapting to these differences often requires considerable effort and patience. For example, specialists with experience in the Kazakh market adapt much faster to the nuances of Uzbekistan or Azerbaijan than those with exclusively European experience.
Quality of Service and Business Approach
Another aspect of new markets is the level of service. You are likely to find that the service standards familiar to your local market are not present. This includes business communication norms, the speed and quality of processing requests, and the qualifications of specialists. There will be a different level of service that you will also need to adapt to.
Demanding European clients often face difficulties interacting with local partners, as many norms in Europe may simply be unavailable in CAC’s market.
Availability of Qualified Specialists
The influx of foreign companies into the national markets of the Caucasus and Central Asia has further exposed the existing issue of qualified personnel.
The candidate market cannot meet employers' needs. Qualified personnel are in high demand. One possible solution chosen by companies is relocating key specialists from other branches.
Level of Automation and Software Localization
Another possible challenge of the local market is the level of automation and software localization in the industry.
In our B2B industry, outsourcing accounting functions, we encountered a lack of analogs to local professional software and high-quality localization of this software (despite its availability) in local markets.
I assume we are not the only ones facing such difficulties. One solution is to refine the software ourselves, using professional resources from other branches, which is not available to all companies. Alternatively, finding a partner who has already overcome this challenge is an option.
Trends and Conclusions
New markets are undoubtedly attractive due to their potential and are considered by companies as one of the main development directions in the current reality. Despite existing challenges, businesses are not ready to miss these opportunities, and more and more companies are entering neighboring markets and continuing their development, exploring new directions.
The influx of new players into national markets will certainly impact local businesses, and we are already observing changes in service and business approaches.
Finding an outsourcing partner in the local market who speaks the same language, has a similar business approach, and can meet your standards is one of the key tasks when entering international markets. The right provider will significantly ease a company's entry into the new market, help reduce transaction costs, and allow them to focus on core business tasks by outsourcing non-core functions to a like-minded provider.