1. Entering Emerging Markets: An LSP Perspective
Ilya Mishchenko EGO Translating Company 14 April, 2015

2. Your Speaker Ilya Mishchenko
With EGO Translating since 2006, presently Managing Director in charge of translation & localisation, interpreting and document legalisation business segments.
Chairman of St. Petersburg branch of Translators Union of Russia, at the same time serving on the Union board; proposed member of FIT Translation Technology Committee.

3. EGO Translating Company
25 years on the market;
6th largest in Eastern Europe (CSA research);
One of the leading Russian RLV’s;
Scope of services: translation, interpreting, voice-over, localisation, legalisation of documents, DTP, pre-print, language & translation training;
Over 200 in-house staff, over 2,000 freelancers;
Headquarters in St. Petersburg, offices in Moscow and 12 cities in Russia.

4. At Home
Increasingly competitive translation and localisation market at home —
Russia — harder to sell and gain sizeable profits:
more mature clients;
technology penetration;
stringent RFP/RFQ procedures, government authorities procure mostly on price basis (80%);
stronger competition in regional centres (smaller LSP’s with lower overhead);
technological advancements penetrate lower segments of the market.
We no longer have the edge as compared to smaller competitors.

5. Why Try Elsewhere?
Markets outside the standard “comfort zone” — WHY VENTURE THERE?
Obvious reason: content explosion → localisation into more languages (increasingly globalised economy, faster time to market, etc.);
Developing economies grow faster than anybody else;
Events of still present opportunities for growth.

6. Emerging Markets Growth
Source: International Monetary Fund, 2014

7. Expertise And Scenarios
Our expertise: Russia is also an emerging economy with traits that are similar to those markets we are (were) trying to enter.
Market entry scenarios:
Selling from a “home base”;
Buy an LSP / merge with a local LSP;
Open a dedicated representative office.

8. Entering Emerging Markets: Aspects
Entering a market is quite different for an RLV as compared to, for example, a manufacturing company. RLV is not a global brand and has harder time trying to get a solid footing in a foreign market. Standard marketing concepts do not apply.
Aspects to consider:
Intercultural communication, brand recognition;
Pricing models and revenue drivers;
Processes (sales and customer care, production, QA, etc.);
Resources (staff, technologies, etc.).

9. Scenario 1: Home Base
We researched a possibility to hire locally, find BDM’s speaking the required language.
Aspects:
Intercultural: no expertise of the target market & business practices to produce an adequate marketing strategy;
Pricing and revenue drivers: poor knowledge of the market, our pricing models does not work that well (“mystery shopper”);
Processes: time difference, dedicated PM’s with extra hours, new procedures for rush orders;
Resources: 1 BDM, technology already in place, dubious expenses for business trips and promotion abroad.
Outcome: BDM now covering other international markets without specific regional focus.

10. Scenario 2: M&A
We researched a possibility of merging with or buying a smaller LSP in the target market.
Aspects:
Intercultural: manageability of staff, due diligence outsourced and not by a local provider;
Pricing and revenue drivers: use adopted models, define several revenue drivers and concentrate on those;
Processes: harmonisation of processes used in both companies;
Resources: costly — due diligence, time spent on paperwork.
Outcome: partner scheme, without M&A.
Cross sales

11. Scenario 3: You Own Office
We researched a possibility of opening a permanent representative office in the target market.
Aspects:
Intercultural: time needed to adapt marketing strategy locally;
Pricing and revenue drivers: market research, concentrate on top revenue drivers that we can start selling instantly;
Processes: processes in place;
Resources: local staff, technology in place.
Outcome: uncertain profitability, long-term perspective.

12. Q&A