As Global Competition in Digital Grows Fiercer, Who Will Be Left Standing?

A Successful Company Needs to Know Local Culture and Habits, and How to Adapt

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The global competition for consumers' hearts and minds is growing only fiercer, especially in digital. The new-media marketplace naturally bleeds across frontiers, often with knee-high barriers to entry. But succeeding in this widely varied and vast arena will not be as easy.

Breaking into a new region digitally does have its legal and cultural complexities, yet it's nothing compared to what manufacturers like Toyota, say, faced in becoming a household name in the United States, or Louis Vuitton in China. As a result, Internet businesses are expanding internationally, exponentially, as if it's as easy as opening up shop in a new DMA.

Baidu, the prominent Chinese-language search engine, is expected to open an office soon in Brazil. That relative newcomer, Twitter, used nearly worldwide, has announced plans to open its third international office in Ireland. The Huffington Post recently launched new editions in Canada, the United Kingdom and France. Netflix has opened streaming operations in Latin America, the United Kingdom and Ireland.

Publishing and tech businesses are reaching across the oceans in earlier stages of development than ever before. In 2011, Buddy Media, the provider of social-enterprise software founded only in 2007, opened an office in Singapore. Saavn, another 2007 startup offering South Asian music, has users in 219 countries. Less than four-year-old Groupon is in 45 countries.

But these businesses aren't necessarily entering markets that are famished for their products. Localized versions of the most commonplace digital services already exist in the major Asian marketplaces, for example. As author Rebecca Fannin wrote in Forbes, "Take a look on online travel. There's Expedia in the U.S., Ctrip in China, and four clones in India: MakeMyTrip, Cleartrip, Yatra and Travelguru." She composed similar lists for jobs portals, digital-mapping companies and online-payment services. Each of these regional offerings presumably addresses the particular sensibilities of its specific marketplace.

Consumer preferences and trends in Internet use, speeds and penetration can differ greatly from region to region, country to country. Indonesia, for example, is the second-largest market for Facebook, but fewer than 20% of Indonesians have Internet access, The Economist reported. Smartphone use varies wildly, with more than 50% penetration in developed markets like the United States and Europe and less than 20% in emerging markets, according to the analysis firm VisionMobile.

Companies that succeed in the global ecosystem will need an awareness of distinct cultural traditions, consumer behaviors and rates of technological advancement, followed by the ability to adapt products and services to these dissimilarities. The winners will deftly and nimbly provide an incredibly diverse array of consumers with wholly satisfying, appropriately innovative digital experiences. The businesses with the best information and insights are those most likely to endure.

When I addressed a conference held recently by the Chinese digital giant, I was struck by the inquisitiveness of the executives and other attendees. They asked what American companies and consumers were doing, why they were doing it and how. Speakers from South Korea, Europe and Japan, were similarly peppered with questions.

This hunger for knowledge suggests that we will likely see many more formal exchanges of information among companies vying for digital dominance worldwide. One example is a meeting Feb. 27 where my organization, IAB, will bring three major Chinese media and advertising companies to the stage.

In the not too distant future, some Internet businesses will emerge as undisputed leaders of the global ecosystem. Many others will shutter their doors. It's a battle that even the best and the brightest, the most agile, and innovative businesses can win—or lose.

David Doty is executive vice president and CMO, Interactive Advertising Bureau.
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