A European software company wins 38 enterprise customers in its first year in Asia

The challenge

The company sells supply chain planning software to manufacturers and distributors, with about €140 million in annual recurring revenue, nearly all of it in Europe. Several of its largest customers had moved production to Southeast Asia and wanted the same software and support there. The board approved an Asian expansion and set aside €30 million for it.

The initial plan, drawn up internally, proposed entering six markets within two years from a regional hub, with sales covered remotely from Europe in the early stages. The chief executive wanted an outside view before committing the money.

Our approach

We assessed each of the six markets on the size of the addressable customer base, the strength of local competitors, the availability of implementation partners and the cost of building a team. We interviewed 64 manufacturing and logistics executives across the region, along with system integrators and the company’s existing customers with Asian operations.

The findings narrowed the plan considerably. Three markets held more than 80 percent of the near-term opportunity. In the other three, local competitors were entrenched and implementation partners scarce, so the cost of winning each customer would be several times higher.

The entry plan we built with the leadership team was specific:

• Enter Singapore, Vietnam and Thailand only, with explicit criteria for revisiting the other three in year three
• Start with existing European customers’ Asian operations as reference accounts before pursuing local companies
• Hire a regional managing director and local sales leads before launch, rather than covering the region remotely
• Sign two implementation partners per market, with joint targets and shared pipeline reviews

We also designed the regional organization, its decision rights relative to the European headquarters and the incentive plan for the first hires.

The impact

The company signed 38 enterprise customers in its first year in the region, nineteen of them local companies with no prior relationship. Annual recurring revenue in Asia reached €11 million eighteen months after launch. Because the plan covered three markets rather than six, entry cost came in 40 percent below the original budget, and the regional business is on track to break even in its second full year.

The board has since approved a fourth market, chosen against the criteria set during the original assessment.