By Viktor Andrukhiv, (pcituured) Co-founder of Fibermix and Savex Minerals
In the midst of total economic uncertainty, shifting frontlines and a human resources crisis, the expansion of Ukrainian businesses into foreign markets may be the only key to stability. Expanding abroad allows you to diversify your income and enter markets with more attractive economies.
In 2024, 79% of small and medium-sized enterprises planned to expand their business, and 14% of these planned to enter other markets. Now we can talk about an even greater increase in the trend towards expansion. After all, the internal challenges are growing.
So what can entrepreneurs expect on the road to scaling?
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Subscribe- The reality is fierce competition
In some EU countries, such as Germany or Switzerland, consumers often prefer local producers, regardless of price and quality. Therefore, the product must have a clear competitive advantage and adapt to the cultural and consumer traditions of the target market.
More exotic markets require more preparation. We have to take into account the big differences in mentality, habits and even communication channels. For example, we are interested in the South African market. The country is actively developing and we see business opportunities. However, we are taking our time to study all the peculiarities.
2. Ready to cut the price to introduce your product to a new audience
One of the best ways to assess whether a product is ready for export is through trial shipments. They allow you to identify problems and challenges related to logistics, packaging, storage or even product quality.
Ukrainians are flexible and offer competitive prices, even if they don’t make much profit. Test sales will help you understand your customers’ needs and put processes in place to minimise the risk of losses in the future when deliveries are larger.
One of the most effective ways to enter a new market is to work with local companies that already have an established reputation. For example, working with a distributor that represents several brands, including your own, can make the process of entering a market much easier.
- Ready to make concessions
Building long-term partnerships requires a willingness to compromise. For example, allowing deferred payments or adapting to customer requirements
4. Overcoming reputational challenges
Ukraine is a young country with a young business and entrepreneurial culture. Not all good things are known abroad. Unfortunately, corruption scandals, imprecise legislation and an unstable economic situation can deter potential foreign partners and hinder cooperation. Therefore, another challenge is to overcome prejudices against Ukrainian business and create honest and transparent communication with partners, thus building trust.
Expanding a business abroad is a long and complex process that requires a strategic approach and a willingness to face local challenges. Nevertheless, for many Ukrainian companies, scaling remains the main tool for business survival and growth.
