Many consumer companies have been able to offset the business they're losing as American consumers falter. They've been the beneficiaries of a special, magical element called "international exposure," which has certainly led their shareholders to breathe a big sigh of relief.
And of course, when it comes to big international opportunities, many companies would love a presence in China, a country with a huge population that's becoming increasingly well-heeled. Many investors get excited at the mere hint that a company they're interested in is thinking of doing business overseas.
However, some of these moves into countries like China may be easier said than done, so you'd best be thinking long term when considering specific companies -- and be prepared for some snags along the way.
Easier said than done
A recent Wall Street Journal article pointed out that department store retailers may have a heck of a hard time making their way into the Chinese market. As an example, it pointed to Saks
The WSJ pointed to many stumbling blocks for department stores' international plans. For example, many designers balk at making deals with the department stores, since they're trying to open their own stores in certain busy international locales. Everybody wants a piece of this compelling growth story.
Meanwhile, in the Saks example, the need to gain approval from local and regional governments in China has also helped make for a difficult entry. This is a bummer, but hardly surprising. I can't help but think about the way Starbucks
In more recent (but similar) tidings, I saw a clip of Apple's
As much as Saks' experiences underline the difficulties companies can run into in countries like China, there's no reason to give up hope. Like I said before, plenty of consumer companies are already offsetting sluggishness here at home with popularity abroad.
In closing, if one of your companies says it's expanding abroad, awesome -- just remember that there can be plenty of unforeseen barriers. If you already believe in the core business, great -- you're already in for the long haul and willing to wait for those strategies to come to pass, and you're not just relying on the siren song of international expansion over the short term.
There are plenty of companies that already have expansion plans well under way. Such companies may present great values for those who have their hearts set on opportunities in huge, compelling markets like China.