How Can a Startup With a Strong Local Brand Successfully Expand Internationally?

What causes a successful startup to consider international expansion from their home country? Which target market do they pick first? Is expansion to the US market, with a product and service that varies locally, a realistic possibility?

Emily Ewell, the co-founder and CEO of Pantys, is well-travelled and world-wise. An American, born in Washington D.C., she had previously worked for a Swiss multinational company while living in Spain on a project located in Brazil.

She is no stranger to doing business internationally, international markets or seeing how global brands successfully expand. Emily previously worked with Deloitte, a consultancy, helping multinational companies expand into emerging markets. Further work with Launch, an investor focused on direct to consumer brands, brought her invaluable experience in apparel production and supplier sourcing.

OnGlobal Opinion: In our research, we’ve observed that founders with previous experience in living and working internationally, even for a relatively short (3-6 month) period of time, are more inclined to look for global growth opportunities. We recommend looking for these trips as early indicators of a Founder’s international growth potential.

But it was the validation of a successful global brand, Johnson & Johnson,  that gave her team the confidence to think about expanding globally. In May 2019 they announced a partnership with Johnson & Johnson. Johnson and Johnson is one of the true pioneers of addressing a global audience. But before expounding on her international expansion, let’s uncover her founding story.

Emily and her co-founder began with a vision for building a brand focused on empowering women to reach their full potential. Panty’s started with a strong product vision -- underwear with a quick-drying, water proof, breathable and anti-bacterial fabric that absorbs all kinds of liquids. Such as menstruation, sweat, bladder leakage or other natural fluids.

Their proprietary product was developed to serve a higher goal: To empower women to meet their full potential. It never occured to Emily that a women’s menstrual cycle might mean feeling less than 100% with most women experiencing discomfort or pain before or during the menstrual cycle. Developing a product that releases Brazilian women from those limitations, while promoting a healthy, reusable and environmentally friendly product turned out to be a winning strategy.

A winning strategy that led to a sold-out launch from their pop-up store in 2017 to a country-wide brand with additional product lines for swimwear, nursing mothers and sleeping pants.

But what are the first steps to take in moving from smashing success in Brazil to the first steps towards internationalization and foreign markets?

A lot of thinking about where to start, researching their market, and listening to their local customers.

Given her background Emily was able to easily list the challenges of internationalization faced by many Brazilian companies: Legal issues, tax structure, content translation, exchange rate risks and foreign partnership structures. Admitting that there is a small list of brands that have successfully internationalized outside of Brazil.

Emily related to us that they have done some deep thinking on where they might go next. She favours expansion to the European market, over the US and others, for a few reasons.

First she knows the market well, having done her MBA in Spain, then worked in Switzerland. She’s even taken a few ‘lean startup like’ steps to test her product with contacts sourced through her MBA network.

OnGlobal Opinion: In international marketing this could conceivably be called ‘the network lite’ model of market entry. Reaching out through any network, be it friends, family or alumni, is a viable and valuable way to test early market-entry product acceptance. Be cautious about the feedback received from those closest in your network -- it will be biased.

Additionally, Europe offers more of a greenfield market. Most of Panty’s known competitors are based in North America. Going into the US market, to which Emily aspires eventually, would require significant funding and a desirable strategic partner. Their competitors have been present for five to eight years longer and are quite well known.

OnGlobal Opinion: Emily clearly articulated to us that she understood the inherent dilema found in all international expansion choices. That there is an opportunity cost to any market entry choice.

Emily does not want to enter a market without data. Yet, sourcing data from market research reports is a difficult proposition -- her product category is so new that, beyond news reports, actual quantitative data is hard to find. She knows that their product, which brings together fashion, health and sustainability is a new and growing category. But unlike conventional menstrual products like pads and tampons there is no qualitative data that can be referenced on size, accessibility and addressability. Market size is something she well knows would be asked by any investor funding a US-based expansion.

But it’s one type of data that Emily sees as crucial to preserving during any type of international expansion. Their extraordinary focus on customer-based learning. Not simply learning about product feedback, but walking with their customers through the cycle of learning to use an intimate product. That has been a key growth strategy in their local market.

Being close to their Brazilian customers has unlocked a key to local market success for Panty’s -- their ability to rapidly innovate on behalf of their Brazilian customer. Emily is mindful that any successful international expansion needs to preserve and protect that facet of their product development.

Protecting that product feedback loop, using data to drive market entry decisions and testing in small, interactive batches are all solid steps to a successful next lean market entry.

OnGlobal Opinion: Panty’s Founder is exemplary in demonstrating the principles and practices of successful local brands considering international expansion. They are carefully thinking and planning on what is the next, best market. Favouring data-driven decisions and implementing a lean market entry strategy. Replicating the success of their particular product in a specific, emerging market is not a given. But Emily and Panty’s are well on their way to understanding the challenge.