An old adage of international business is to adapt to the culture of the country where you’re selling.
So when Buford-based plastic footwear maker Okabashi wanted to introduce its oka-B lifestyle brand in South Korea, it naturally hired Asian models for photos to be plastered on billboards around the country.
But in a strange inversion of globalization, the company’s local distributor had one request: use blonde Americans instead.
It was unexpected, but it made sense given that oka-B has begun to benefit from instant cachet around the world thanks to its “made in the USA” status, international sales manager Jackie Barnett said at the second annual Gwinnett Global Trade Summit.
“It’s easier for us to enter a market with authenticity because we represent that step up to luxury,” Ms. Barnett said.
While Okabashi has been exporting for 20 years, oka-B has seen its sales overseas accelerate quickly since 2003. Its shoes are now found in 25 countries, often in beach destinations but also in places like Poland, where they’re sold mainly to travelers, and Saudi Arabia, where a distributor just ordered three 40-foot containers and promised to buy more.
Ms. Barnett advocated a few different methods for finding overseas customers. Oka-B found its Saudi buyer at a trade show in Dubai. It found one partner in the Caribbean by looking at the website of Atlanta-based women’s underwear brand Spanx and cold-calling its regional distributor. With an established retail chain, that company quickly boosted oka-B’s Caribbean sales by 50 percent.
She recommended that exporters find and train master distributors who know the local culture, then watch the purchase orders roll in.
While it’s better to go to places like Colombia, where a free-trade agreement with the U.S. makes for easier entry, tariffs haven’t priced oka-B out of other markets. The perception of American quality allows the company to command a higher price, helping oka-B’s wholesalers absorb much of the hit from the tariff.
Even when oka-B does have to reduce its wholesale prices, the loss of revenue is offset by the volume in international markets, which eclipses domestic by 10-fold, Ms. Barnett said.
But some presenters haven’t found it all that easy to crack new markets.
Bill Russell, president and CEO of Russell Landscape Group, recounted a parade of failed relationships in China, a market where only the promise of grand profits in the future persuaded him to persist through the problems.
He went on a state trade mission China in 2010 and “caught the fever” when he saw the massive infrastructure being put in place to underpin the country’s urbanization.
Coming back, he conducted 18 months of research and decided to enter the market for landscape architecture with a partner in the northeastern port city of Dalian. But Mr. Russsell found it hard to build credibility being outside big cities like Shanghai and parted ways with the partner when he wouldn’t move.
“To be successful in China you’re going to have to be patient, which is not one of my virtues, you’re going to have to be a risk-taker, which I fit the mold, and you’re going to also have to have a loyal staff that you can trust on the ground,” he said.
There are also other hardships, like the late-night drinking that goes hand-in-hand with building guanxi, the interwoven system of relationships that is ingrained in the Chinese business culture.
“Often you put your liver on ice back at the hotel,” Mr. Russell said.
Later, Mr. Russell gave up on landscape architecture and decided to go with pure building design through a joint-venture with Wakefield Beasley and Associates, a respected Atlanta firm with 34 years of experience. Russell Wakefield Beasley Architecture Design Group earlier this year set up a wholly-foreign-owned enterprise in Shanghai.
Also speaking at the summit, Wakefield Beasley President Lamar Wakefield said international markets buoyed his firm throughout the building downturn in the U.S.
Strategic hires of the growing number of foreign architecture graduates in the U.S. provided inroads into countries that Mr. Wakefield couldn’t have entered on his own.
Specifically, he was able to provide millions of dollars worth of design services to a 6,500-acre resort development on the Red Sea in Egypt thanks to ties with the developer’s son.
“This was helping us get through a tough time, and those guys paid very well,” he said.
Having an internationally minded staff, it wasn’t hard to get to 25 of his employees to move from Atlanta to Dubai for an extended assignment for the construction phase on Dubai Festival City, a $2.5 billion indoor mall with canals that go through the building.
“These kids – they don’t care. They’re from Colombia or Venezuela or China or whatever and they wanted to go see Dubai for 30 months, and they did,” Mr. Wakefield said, noting that similar ties have helped the firm set up offices in Abu Dhabi, China and the burgeoning Central American nation of Panama.
Winton Machine Co. started with a more reactive approach to international sales after a South Korean buyer found the company’s website in 2001.
“It’s pretty crazy when you think that someone across the world would buy a $100,000 machine over the Internet, but they will,” said Lisa Winton, CFO of the family-owned company.
Since taking the reins of its export sales by promoting the company on Internet searches and social media around the world, as well as attending trade shows with the Georgia Department of Economic Development, export sales now account for 10 percent of revenues. The goal is to get to 25 percent.
Mexico, Central and South America, North Africa and Turkey seem to be good markets for the company to explore, Ms. Winton said, and China has added $500,000 to the bottom line, partly because Winton Machines picked the right distributor.
“The growth potentially is definitely there overseas because there are so many markets that are untapped,” Ms. Winton said.
Ms. Winton seconded the notion of investing in Chinese relationships, noting that she spent time with her distributor’s family during a visit there and sent him a handmade quilt when his daughter was born. She joked that she probably wouldn’t have done that with a distributor here in the South.
Perhaps the most drastic export impact for any presenting company came for AdEdge Technologies, which makes equipment that filters arsenic from water in municipal and industrial systems.
After U.S. stimulus funding in 2008-09 dried up, the company found itself reeling from an environment in which the federal government drastically reduced its allocations to municipalities for infrastructure, said Rich Cavagnaro, who delivered the keynote speech at the summit.
An American customer called for an installation in Indonesia within 30 days when an executive was jailed in the country for returning arsenic-laced water to the environment. AdEdge shipped equipment by air and quickly installed it. The experience helped solidify the idea that exports are a great source of diversification and profit.
“You can sometimes look to these U.S. customers to pull you into those markets,” Mr. Cavagnaro said.
From zero in 2010, AdEdge’s export sales went to 44 percent of revenues last year. Overall sales grew 67 percent in 2013 over the previous year.
That’s partly because working with companies overseas has helped AdEdge win contracts back at home, Mr. Cavagnaro said, citing a Spanish and French consortium that brought AdEdge in on a U.S. installation after working with his company in Chile.
The company is reorienting itself toward more international growth and looking to hire more engineers and salespeople with capabilities in a foreign languages.