Marketplace expansion: finding value in unexpected places

How do new age, on-demand companies, like BlaBlaCar, Deliveroo, and Hitmeister, choose which countries to expand into?

There is no simple answer, of course. Working closely with marketplaces in my role at Hyperwallet, I have come across all sorts of strategies: choose a country with similar cultural or economic conditions; wait for the competition to demonstrate the market is viable; follow an executives gut instincts. These are not necessarily bad strategies, but they are not well-informed. Such an expensive decision should come only after a thorough analysis to ensure the marketplaces best shot at expansion success. Without that, companies might overlook countries that are ultimately better aligned with their individual strengths and weaknesses.

We wanted to help marketplaces take a more data-driven approach to their international expansion. For this reason, Hyperwallet has created the 2018 Marketplace Expansion Index, a comprehensive report that helps companies properly assess the expansion readiness of 36 key markets. Countries have been split into three categories based on their attractiveness: Established (e.g., the United Kingdom, Germany), Emerging (e.g., Sweden, Japan), and Evolving (e.g., Turkey, Mexico). By looking more closely at this compiled information—covering factors like available workforce, the regulatory environment, and ecommerce growth—we believe marketplaces will be better prepared to tackle their next expansion effort.

As an example, here are some surprising marketplace expansion destinations from our Evolving category, which offer potentially overlooked advantages:

Russia

Despite the fact that the country has only a few highly populated urban centers, Russia boasts significant market size and a population that is generally accepting new, even foreign economic models. The sharing economy is almost entirely unregulated by legislation, and income earned through marketplaces can quickly eclipse that of an average salary in Moscow (roughly USD 1,200/month).

Saudi Arabia

Saudi Arabia, with its strict social norms and low ease of doing business ranking, is the largest economy in the Arab world. An interesting use case has evolved here: women are essentially prohibited from driving, and car-sharing platforms like Uber and Careem have consequently found quick success in the country. The government is looking into easing the regulations on freelance employment in the near future.

Thailand

This popular touristic destination is fertile ground for marketplace expansion, with high demand for Western goods from locals and tourists alike. Thailand offers one of the largest available freelance worker pools from which to draw, and the population has demonstrated an openness to sharing economy services.

Switzerland

Switzerlands small population is likely to limit your growth potential, but the country makes for an ideal testing ground in the European region. With excellent logistics and payments infrastructure, a large retail ecommerce market and a government eager to accommodate new economic models, Switzerland has one of the top pro-startup business environments in the world.

Brazil

Although the country has been marred by economic and political instability in recent years, Brazil leads Latin America in its number of sharing economy initiatives. The most populated country in the region, more than half of Brazils 200 million residents is available for freelance work. Brazilians rank highly in terms of internet and social media use, making them more receptive to transacting online. However, strict currency-related regulations mean that youll need a robust payments partner to take advantage of the opportunity.

Find your perfect expansion target with the 2018 Marketplace Expansion Index. You can download the full 133-page report or search and compare countries using our interactive map tool.

About Simrah Singh

Simran Singh is the Director of Business Development and Strategy at Hyperwallet. Simran has more than five years of experience in the on-demand economy and graduated as a Palmer Scholar from Wharton School of Business. He also holds an undergrad degree in Computer Science and Mathematics from the Indian Institute of Technology, Delhi.
 

About Hyperwallet

Hyperwallet provides growing marketplaces with a frictionless, transparent, and reliable way to management payments and enhance their payees’ experience almost anywhere in the world. Trusted by enterprise, ecommerce, and service-based platforms, Hyperwallet makes it easy to pay a dispersed workforce of freelancers and contractors using a singular payout environment.