International Expansion Market Selection - Size Doesn’t Always Matter
International Expansion Market Selection can be complex. It means looking at more than market size. Find out what other factors to consider here.
Most entrepreneurs and online business owners would recognize the USA is the largest free market in the word. While size matters, it’s important to look beyond the size to select the right market for international expansion market selection.
Critical to any company expanding beyond its home market, or in this case beyond its home continent, is an understanding of the structure of the market. Who and what are the individual parts and players involved -- the buyers, sellers and other market actors that make up a single transaction or series of transactions.
Flowers are part of almost every occasion of life. They are part of the experience of life with friends and family. Used in both celebration and mourning, flowers mark an occasion as special. They are a simple gift that’s welcome on any occasion. At first glance, the market is ubiquitous and obviously large. Most would say completely mature.
But Wilfred de Wit, whose Father was a grower in the Netherlands, saw something more than a big market. What he saw, he turned that into an opportunity with IBuyFlowers.com -- an online marketplace that links flower buyers with sellers.
The process of how a flower gets from the ground to your next life event is a multifaceted transaction. There are growers, exporters, importers, shippers, wholesalers, warehouses, local distributors, flower shops, supermarkets, florists and event planners. And the process is international, with growers located in Africa, South America and other warm climates, and the buyers throughout the world.
In addition to being an international multiplayer market, there are vast differences between how flowers are sourced, sold and shipped in Europe than in the USA.It was those differences -- the structure of the market -- that was the next critical factor in Wilfred selecting the USA as the right target market for international expansion market selection.
Wilfred first observed that the flower market in Europe was an efficient market. A buyer could appear at a well-known physical market, place an order from that single source, and the flowers be on a truck to the distributor within 24 hours. A new, online marketplace like IBuyFlowers.com would struggle to disrupt that efficient, mature process with their unique value proposition.But the US market, in addition to being the world's largest market for flowers, was a different story.
Here Wilfred knew that the market structure was inherently inefficient and fragmented. There are multiple growers, sellers, distributors and shippers that are spread geographically around the US. There is some level of concentration around Miami, as a port of entry for South America, but otherwise it's often localized by state. That fragmentation and inefficient processes led Wilfred to see an opportunity to make the transaction simpler and better.
OnGlobal Opinion: Market size is one of our three key challenges in determining any international expansion market selection. -> Request a free Market Opportunity Attractiveness worksheet to learn the other two key challenges.
Wilfred recognized the structure of the market as being as important as the size of the market. He saw a diverse market that was inefficient in getting flowers from the grower to the buyer. The European market was far more efficient, leaving him less opportunity to add value to the process. But in the USA, there were inefficiencies in the ordering, storage, shipping and retailing of the flowers. That inefficient structure led him to create IBuyFlowers.com and target the US as the main market for international expansion.
IBuyFlowers.com’s mission is to facilitate the florist shops, wedding & event planners with only 100% farm fresh flowers direct from their international network of flower farms. Their US market expansion is going well with 1000+ US florists, wedding and event planners on board their platform.
In fact, they are one of the few bright spots in the recent Coronavirus induced recession. You can read more about how amid a Health Crisis, their B2B commerce platform is delivering farm fresh flowers in a Flower Management Magazine’s April issue.
We’ll be watching, and hopefully writing more about, IBuyFlowers.com and their international market expansion selection and start within the USA. You can sign up below to follow future stories.
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Disclosure: We provided Wilfred de Wit and the team at iBuyFlowers.com with an advance copy of this article.
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