US Market Entry Strategy: Lessons for South African Entrepreneurs

Entering the US market can be a game-changer for South African businesses, but it requires a well-crafted US market entry strategy to navigate its complexities. The United States boasts an economy that's over 74 times larger than South Africa's, with immense opportunities in retail, e-commerce, and beyond.

However, misconceptions about market saturation, consumer behavior, and regulatory hurdles often trip up international entrepreneurs. Drawing from nearly two decades of experience helping brands like Nexgrill and Vizio scale to billions in revenue, this post shares actionable insights from a recent presentation on bridging the gap between South African ingenuity and American market demands.

Whether you're launching a product, service, or tech solution, understanding the nuances of a US market entry strategy is essential to avoiding costly mistakes and capitalizing on this rewarding landscape.

TL;DR - What is a US Market Entry Strategy?

Entering the U.S. is less about transplanting what worked at home and more about designing a US market entry strategy that fits America’s scale, competition, and consumer norms. Validate product-market fit, localize positioning and pricing, plan for state-by-state rules (tax, labeling), and fund an omnichannel launch that blends ecommerce with retail. Expect rigorous compliance and a longer sales cycle—but with disciplined execution, the upside is enormous.

Unlocking Success: A Comprehensive US Market Entry Strategy for South African Entrepreneurs

A solid US market entry strategy begins with recognizing the scale of the challenge. The US economy stands at $33.5 trillion, dwarfing South Africa's $410 billion, yet with only five times the population. This disparity translates to a per capita spend that's 17 times higher, fueling a retail market 90 times larger and an e-commerce sector generating $1.3 trillion annually.

For South African brands, this means adapting to a hyper-competitive environment where giants like Amazon dominate, and influencer marketing alone commands $9.29 billion in annual spend. By learning from real-world journeys, such as transforming a $30 million South African grilling company into a half-billion-dollar US powerhouse, entrepreneurs can tailor their US market entry strategy to leverage these dynamics rather than being overwhelmed by them.

Key to any effective US market entry strategy is debunking common myths and aligning with American consumer expectations. South Africans often assume success at home will translate directly, but differences in customer loyalty, purchase drivers, and political culture demand reevaluation.

For instance, while quality might be a unique selling point in South Africa, it's merely table stakes in the US, where seamless experiences like frictionless returns at Costco are non-negotiable. Brand positioning must shift toward personal benefits, minimalistic design, and direct tone of voice to resonate. This presentation goes deep into cultural and behavioral shifts, offering a framework to refine your approach and ensure your US market entry goes as smooth as possible.

Regulatory and operational pitfalls further underscore the need for a meticulous US market entry strategy. From FDA compliance and trademark registration to navigating state-specific rules like California's Prop 65, overlooking these can lead to litigation or market exclusion. Payment terms stretch to net-90 days, and in-store marketing becomes critical since listings alone don't guarantee sales velocity. South African entrepreneurs must also prepare for hefty marketing budgets - up to 22.6% of revenue in some sectors compared to local norms. Through case studies and practical advice, we'll explore how to validate product fit, determine channels, and plan for scale, turning potential obstacles into stepping stones for your US market entry strategy.

Ultimately, a thoughtful US market entry strategy isn't just about expansion, it's about sustainable growth in the world's most rewarding yet brutal market. If executed right, as seen in acquisitions like Vizio's $2.3 billion Walmart deal, it can redefine your brand's trajectory. This presentation provides a step-by-step framework, misconceptions to avoid, and real lessons from the trenches. Embed the accompanying video for deeper insights, and let's equip you to conquer the US with confidence.

Ready to refine your US market entry strategy? Dive in.

The US Market through a South African Lens | Lekker Network Presentation by Etienne Bruwer

No. Thanks, Nick. Can I can I do a screen share?

You should be able to I'm getting a bit of an echo there.

Can you guys see my screen? Indeed.

Yeah. Is. Screen.

Introduction to the Lekker Network

Alright. Well, how's it everyone? I'm Etienne. Thanks, Nick, for the for the introduction. I think this all, like Nick Nick said we were chatting about the Lekker Network even before the Lekker Network was official.

We've been we've been working within the US landscape for quite a while and you know Nick and I had great conversations about you know just some of the stories and you know, some of the learnings that we've been through and and Nick approached me a few weeks ago saying, would I mind doing this talk and just sharing some of the knowledge and obviously that's that's that's great and I really appreciate the the opportunity just to share a little bit of what we've done and I think these types of conversations are very in line with the or aligned with the mantra of the LACA network, right? It's, you know, how can we help?

We've we've made a lot of mistakes over the years. We've we've been doing it for I want to say close to two decades now, you know, working working within the States and building brands there and we've we've we've just made a lot of mistakes and learnt a lot of lessons and and the way that I approach today's presentation was almost like what information can I transfer to you guys?

Anyone who's keen on going into the US market to you know hopefully avoid some of those mistakes and you know just you know learn from from what we've learnt and you know it's America's a great great country with a lot of opportunities and potential but it's massive and it's risky and it's competitive and it's saturated and there's a lot of challenges to go into that market. So the idea of today is is I'm just going to talk you guys through I've kind of structured the presentation. First I'm going to literally not going to spend a lot of time on who we are as a company. I think I've got two or three slides in here.

Just to to you know I think you you want to know that where the information is coming from. So just a quick little foundation as to who my what my company does and who we are and why we we you know have a bit of a voice within speaking about the US market. Then I'm going to dive into just a bunch of misconceptions and you know just some knowledge sharing basically and then I end off with a bit of a framework of if I was in the shoes of an entrepreneur, specifically a South African entrepreneur who wants to launch anything into the US, whether it's a service based company, tech company, product company, how I would approach it.

And and hopefully there's some value for you guys in there, especially if there's someone who's not familiar with the US market, who's keen on going into the market. So if you guys are okay, can I can I jump in? Nick, you good for me to to dive in? Alright.

So quick overview. So I'm the CEO and founder of a of a company called Magnetic Creative. We're a global branding and sort of growth company and we've helped we do work in in several different countries but we the bulk of our business has been built in you know brand development within the United States. So we've helped companies just a few of the logos that you can see on there like NexGrill who's originally Mega Master.

You might know them as a local South African company. I've become good friends with the owner of the company Andre De Beer.

I mean they they were already a big business in South Africa in in dollar terms probably about a thirty million dollars type business in the US which is not a small company by by you know any means.

But fast forward I think it's about ten years now that we've been working together and they're now the second largest grilling company in the United States. Revenue, you know, getting close to half a billion dollars worth of revenue annually. Home Depot supplier of the you know, Forbes, Foster's growing companies list. So there's quite a quite a lot of exciting things that's happened to them and we've been on that journey with them for the whole time.

Vizio, another good example company when we started working with them. Also a non US brand when we started working with them, no one had a clue who they who they are and I think last year I can't remember the date but sometime last year they got acquired by Walmart for I think two. Three billion dollars. So that's quite a nice journey as well to have been part of and you know it's a great story to be able to tell that we were privileged enough to go through that entire process from where literally no one knew who they were to an established household brand within the US market.

So we we also work with a lot of local companies in apartment etcetera. So we've got a good solid understanding of the local market as well but we've got a quite a few stories of how we've been partnered with companies who crossed the ocean and had to start from scratch and learn and again we've been in on in those conversations. So got access to a lot of learnings along the way which I'm going to share with you guys today.

Alright we've got we've been operational for about nineteen years as an agency. We've concluded around two hundred seventy eight successful client engagements.

The stat that I'm probably the most proud of would be the fact that our average tenure with client relationships is about five and a half year, four and a half years, sorry. Currently operating across seven different time zones, time zones, permanent employee count sitting at just under a hundred.

And then we've obviously been been recognized for work through various award platforms. Likely sorry for the for the bit of a creds drop but it's just to get some authority on on why we can speak to the topic. Last slide is I'm going to show you guys a quick showreel just to show some of our work, and then I'll go on to not spending any more time on who we are or what we do.

The principles of a They can be understood through clarity, strategy, an undeniable allure, the mysterious force we call magnetism.

Understanding the Principles of Attraction in Branding

The principles of attraction are not confined to the natural world, but extend into the very fabric of human creativity.

They can be understood through observation, clarity, strategy, and undeniable allure.

When properly aligned, these elements create a force that draws attention, captivates the senses, and leaves a lasting impression.

What always is an essential element in the creative is the mysterious.

Cool. So that's us. I hope there was sound. You know you guys could hear the sound through all of that. I really hope so. Otherwise that would have been a very awkward one and a half minute show reel that you guys just saw.

But hopefully that shows that, you know, that we've been doing quite a bit of stuff stateside, and we've got we've got decent experience of working with That was probably the one of the best showreels I've seen.

I'm gonna ask you to try and create us one, Azul, man. That was fantastic.

That's the first one I saw. That was very good, man.

Okay. Nice. Thanks, Runeel. Thanks. Alright.

So so this is just to take you through. I think I mentioned a bit of this upfront, but the the thinking that I had to go through in prepping something of value for today's talk and for the conversation was really going back in time and asking myself, what are the misconceptions that most brands face when addressing or considering the US market? What are the obstacles we faced? What are the brick walls we ran into?

What are the hurdles and the things we didn't quite understand or comprehend? And I tried to dig in as into as many of those little nuances. Now keep in mind that this is a ninety minute session. So obviously I can't quite convey ten plus years worth of lessons in one message.

But I've really tried hard to capture everything of meaning and the stuff that was not as easy to comprehend and understand initially. The things that took time. So I'm going to jump straight into it. That leads me into the second act of today's talk, which is really just addressing some of these misconceptions, looking at the scale of the market, understanding the retail landscape and just diving into some consumer behavior differences.

I've tried to stick all of these little insights or compare them to South African understanding. So I considered the fact that the bulk of today's audience if not all of today's audience is South African entrepreneurs.

I know that there's quite a few of you guys on today's call that has a sophisticated understanding of the US market but that that that besides the point I think what matters is that I'm trying to say there's a there's a South African way of thinking which makes a lot of us really good at what we do. But there's a lot of things that needs to be understood as to how different the US market is if you want to go be successful there. And we can be very successful there. And I know a lot of people who are really within the US landscape. So it's going to be a bit random and up and down, but bear with me through all of this. So let's start with the obvious.

Comparative Analysis of US and South African Economies

So I think we're all aware of the fact that the US economy is massively bigger, much, much larger than the South African economy, right? So currently US sitting at three hundred three three point five trillion US dollar economy compared to the South African four ten billion economy. So that's that's about seventy four times larger than the SA economy. But what makes this interesting is if you think about how much bigger the economy is than ours, but they only have five times more people.

So that's an important, that's sort of where this equation needs to start making sense to everyone is. The US has got thirty one million active brands and small businesses functional or active at the moment within the within the company. Within the country, sorry. So it's immensely saturated with a lot of people. But you need to get to grips with why a country's GDP can be so much bigger than ours. Seventy four times with only five times the amount of people.

So so it's it's an important thing to understand when you want to go and sell something in the country, right? It's really important to get behind the the logic of all of that. And how I've broken it down or or where it starts making quite a bit of sense is if you look at the per capita spend between a US, the average US per capita spend versus South Africa. So you can see there's about a seventeen x difference between what the US consumer has to spend versus South Africa. And when you do that calculation, the seventeen times more spend or or access to to capital compared to five times the population, then you start understanding, alright, that's why the economy is so much larger than in in South Africa.

Just if you just compare the retail market as a segment on its own. So just standard retail within the US. It's about ninety times bigger than what it is in South Africa. And I mean that's seven point two six trillion dollars compared to eighty billion is a very different, you know, the economies of scale in the United States is just mind boggling and mind blowing.

And it's important to get to grips with how that is. I put a little fun stat up in the right hand corner there just to say, it's it's amazing to think that one retailer can have the annual revenue that's larger than our entire economy. Right? That's that's where we're going to play.

It's mind boggling but that's that's just how it is in in the United States.

So so so chew on that. The economy of scale, the size of the beast is is really something that needs to be recognised and acknowledged because with that level of size comes saturation, complexity, you know, in immense levels of competition and there's a a sophistication that's required if you really want to go be go and be successful within within the market. Alright, Another so if you if you I've we've looked at economy. We've looked at sort of snapshot of retail landscape.

E-commerce Dynamics in the US

Now breaking it down even one layer further, we'll be going to look at just the ecommerce landscape within the country. Now again, twelve million active trading websites within the US alone. One point three trillion dollars annual revenue running through, you know, dot com platforms in in the US. That is that is ridiculous.

Key thing to understand for anyone who wants to launch and build a brand within the US is the disparity between or the ratio of e commerce sales performance within retail versus US versus South Africa. There's a major difference if it's six percent, which is in South Africa. Know, it's it's six percent is meaningful but it's not mission critical. But if you get to close to twenty percent, it becomes you know, a very, very critical part of of, you know, the equation. So, the percentage of sales and that that percentage actually even excludes how people order online and and you know it it that is just dot com sales alone. If you had to consider you know app integrations and order placements it would be a much bigger number than that.

And then again, just for the sake of fun, if we compare our biggest online retailer, which is Take A Lot sitting at seven ninety two billion dollars to Amazon, which is two seventy two billion dollars mean that's again worlds and worlds and worlds apart. And I mean again Amazon on its own can be considered an economy. That's just the size of the beast. There's a lot of companies who are incredibly successful in the US just focusing on Amazon alone.

Platform. Alright. So, major, major difference there and it's important to understand the that ratio difference. Excuse me.

If you're building a brand in the US, just just make sure that you understand how critical the digital landscape is within the United States and again, with this level and with this amount of revenue running through those platforms, how competitive it is is just insane. The sophistication compared to what we need to deal with when we're focusing on US clients versus South African clients are world's, world's, world's apart. Alright, another very interesting one. So you you might there might be a small disconnect as to why I thought this was important but let me explain.

The Impact of the Restaurant Industry on Consumer Behavior

So the restaurant market in the US is larger than than most countries in the world's economy. You know, so restaurants spend annually in the US is sitting at one point one trillion. The reason why this is critical is because of how bigger part the the the eat out culture is within the United States. You've got one point one million restaurants, fifteen million people employed within the restaurant industry in the US.

It has a direct impact on customer behavior, trend setting, just just habits and behavior is directly influenced by this eat out culture that is in the US. Yes, there are shifts happening, but it's still incredibly massive and very important to have an understanding, even more so if you're going to be supplying to this industry. So depending on what product or brand you take into the US, if this is a big market for you, again, you can build a brand and a business in the US that just sells to the restaurant trade that's probably bigger than the well, not probably. It's three times bigger than the entire economy of our country.

Again, put that in in perspective. It's it's quite quite scary.

Next one, also major misconception in in you know South African brands.

If you if you break our budgets that traditionally up into little micro segments. We traditionally spend less than one percent on influencers as a as a split for our our marketing budgets. In the US, that is a completely different ball game. Influencer marketing and strategies is you can just look at that number. They're nine point two nine billion dollars year to date spent on influencers within the United States.

That is again astounding. And if you if you're interested in this type of space and if you want to learn more about how influencer marketing works and how critical it is within the US environment, go and look at the story of David Beckham who's on screen here now and his acquisition of the Miami Soccer Club. A lot of learnings there as to the power of influence in the US and how a twenty five million dollars acquisition can turn into hundreds of millions of dollars return on investment just because of this influencer culture that they've got within within the US. Ryan Reynolds also a good story on is it Wexam? Who did he acquire? I can't remember the name of the the club now but some European soccer club, similar story.

Massive Wexam. There you go. Wrexam.

Say again? Wrexam. Wrexam. Alright. So I've seen some of the I'm a big fan. So I followed a lot of that social content.

Just hit a blank on the name right now. But I think overall thing to understand is more money gets spent on influencers in the United States annually, three times more than South Africa's total ad industry. Right? Again, just staggering how different application is within the United States.

Key Differences in Consumer Behavior

This slide is quite interesting because it took me quite a while to pick just the five things that I've got up on screen here now. But these these are really based on key differences from a a consumer behavior point of view that I've learnt and and sort of figured out over time that South African entrepreneurs struggle to really get behind why it is so different and and really understand how to navigate and you know build their brands around these sort of key areas. So it's customer experience, customer loyalty, purchase drivers, consumption habits and political culture. There's many more. Like I said I can list probably another ten, twenty of these off by heart. But these are the key ones that I've that I've found South African entrepreneurs really struggle with.

You you think you know but you end up not really understanding exactly how different it is. So I can't spend too much time on all of these but I would you know urge you guys if you're serious about the US market to to apply some time to go and figure out exactly how different it is. I'm going to give you some quick nuggets here. But from a customer experience point of view, in South Africa, customers experience or having a good customer experience is seen as a added benefit or as a USP.

You know, we we think that makes you that elevates you a little bit. In the US, it's completely different to that. It is expected that you have exceptional customer experience in the United States. If there's friction in your customer experience, you know, that that almost always equates to failure within the market.

If you don't believe me, go and try and go try and return something on Amazon or walk into a Costco store without any slips or anything with you and try to return products. It's it's very frictionless and seamless and and the benchmark for customer experience in the US is just so incredibly high and a lot of South African brands who build sizable companies on that side end up really struggling with being able to support that expectation. So key one to consider. Another one, customer loyalty.

Challenges of Customer Loyalty in the US

Culture in the US is very, very different. This is a meme statement or a tongue and cheek statement that where we say coupons convert in the US, but it's a lot easier to move and jump between brands for a consumer in the US than what it is in South Africa. Again, you have to keep in the back of your mind how saturated the market is, how much more options they are, how much more competitive it is. I think with exception to Apple, which is, you know, one of a select few brands that can really own, you know, customer loyalty.

Most brands have to work really, really hard for it. And you have to make a lot of promises and you have to have an incredible high standard in all things, product, customer support, you know, competitive pricing, etcetera to be able to maintain customer loyalty in in the US. So much more challenging in the in that side of the world than in South Africa to to keep that. And again if you think about customer life cycle value, cost of acquisition, those those incredibly important metrics that a lot of us as as entrepreneurs have to keep an eye on.

You have to understand that that metric and those ratios and doing those calculations are insanely different in the United States than what it is in South Africa. So you have to plan for it and factor it in.

Purchase drivers, again, very different to South Africa. Price always matters. But in the US, that doesn't win.

Things like speed, convenience, values alignment, there's a lot of other factors that weigh a lot heavier in the United States than what they do in South Africa. I'm listing a very short list of examples there, but you have to almost push yourself to erase what you know about what what is what are purchase drivers in the South African culture and and and economy and country. Because it's not the same in the United States. You have to reevaluate it if you're going to go into that into that market.

Consumption habits again you should have already got some learnings from some of the previous slides there but if if you if you know I live I I spend quite a lot of time in the US. I've got an apartment there so I spend a lot of time there. I'm ingrained in social circles and you know part of the pickleball club and spend just spend a lot of time there and it's incredible to learn how differently they consume. How their habits of placing orders are just very different to us.

We're catching up a little bit with, you know, six thousand sixty and ASAP and Dash and all of these platforms. But, you know, DoorDash and those companies are so ingrained within the US culture.

That it's important to understand how that instant gratification. I I know what I want and I want it right now and how critical that whole sort of world is there. And then probably the scariest one of all is political culture. Now I know that many of us have no choice but to be up to date with what's happening at the moment with within world politics.

The Impact of Political Culture on Branding

Which could because of you know Donald Trump playing a massive role and being so vocal about everything and there's a lot of talk and banter but if if you if you this is not about knowing what's happening in politics. This is about how brands need to interplay and and interact with the political environment within the US. It's incredibly complex. It's incredibly risky.

And there's a time in a lot of brands sort of development phase where they they want to find ways to connect to audiences in the US which is very easy to do via you know political affiliation, but it becomes a very, very risky playground to, you know, I mean, I'm sure you guys are aware of what happened to Bud Light recently and a few exaggerated examples, but having an understanding for it or avoiding it completely until you have an understanding of it is probably the right way to go there. But key cultural impacts that affect behavior that I think you guys need to be aware of if you're going to go into into the US market.

All right. Now going dive into the next topic which is brand positioning.

By the way, I'm sorry if I'm going quite fast.

If Nick or Nir, if any of you guys feel I need to slow down or just spend a bit more time on some of these, I'll do so. But I am cautious of not getting through all of the slides in time. I'm going to crunch in a lot of information.

Alright, so when you look at brand positioning, again, this is this is an obstacle that we've ran into so many times is there's this idea that because my product worked in South Africa, because I was a successful entrepreneur with a successful product brand positioning, etcetera, It should translate into the US market. Now A, it won't. And the odds of you being successful on that basis and on that sort of thinking is is very minimal.

The learnings that we've had and we've tried this on a few occasion is there's always some element of tweaking required. There's always some reframing of positioning required.

You know from the obvious stuff like they use the imperial system not the metric system. So packaging and that type of stuff is going to have to change as well. But there's a lot of other technical reasons why that has to change. But from a brand positioning point of view a few key things to look at.

I'm going to not spend too much time on this. But South African brands love, you know, building brands based on their storyline for brand development is often rooted in purpose, legacy, family, nature. You know, we pick those types of things. Where in the US, there's this tendency of brands needing to weigh quite heavily towards personal benefit.

What's in it for me? That type of sentiment is quite important in the US. And a lot of brands, you know, find really clever and sophisticated smart tactics of how to inject that into their brands. So you're going to have to apply that filter when you look at brand positioning.

Quality Perception and Brand Messaging

Product quality in South Africa, we leverage quality as a as a unique selling proposition in the US. Just quality is just assumed.

And you need to provide social proof of that. You know it's it's a very very different way of talking about your product and positioning your product. One way quality can be seen as an as an extra whereas quality is assumed and you have to find some other way to to position and and outweigh and out measure.

Aesthetics as well in South Africa we get away with you know I think the best language I can use here is, is we, we get away with very expressive design in South Africa. When you go into a landscape that is as saturated and as complex and busy and full, etcetera in the US.

The brands tend to focus a lot more on clean, minimal sort of elevated design. So we very often found that brands moving into the US needs to reconsider, you know, packaging or pack designs. Not necessarily but there is definite trend differences of what works versus what doesn't work. And this needs to be understood and evaluated clearly if you're going to go into the US market.

The tone of voice, another key one. South Africans love to, you know, warm, communal, you know, just very, very approachable that sort of common trends with regards to brand tonality in South African context, where the US brand language can be a lot more direct benefit led short.

Know, very often I've heard that that South African companies almost think that they're arrogant. But it's not the case. It's the fact that you've got a lot less time to say what you need to say. And and because of that benefit led expectation in brand building that you that I spoke about earlier. It is much more palatable in the US for brands to be to react and act that way. So this is quite nuanced, but important to understand how tone very often needs to adjust to be relevant and impactful within the US landscape.

Cultural Nuances in Brand Storytelling

Cultural nuances, if you really have to, I would first I would try to, I would recommend avoiding cultural nuance if you go into the US market, because again you just don't know what you don't know. And if you didn't grow up in a country it's very very hard to actually understand cultural impact within a country. But a lot of brands you know do do want to go you know with cultural nuance and you know storytelling based on that.

Then at least make sure that you pick universal insights as opposed to you think this insight is relevant. At least test it or benchmark it before you go ahead with those types of insights and brand storytelling.

Quite a big one category understanding. So it is I want to again recommend to this audience that if you're going into a category that you think you know and understand, try to force yourself to look at yourself as either a competitor within a category or a challenger within a category. Don't assume that you're just another product in the category because you understand the category. Because remember that category has evolved and developed over an extremely long period of time that you did not have visibility to.

And the the nuanced mistakes that you can make really easily by by by having that approach is just so it's it's so fine and it's so hard to understand comprehend but I would recommend that approach to category understanding is really make sure that you analyze a category in-depth in detail and just take that stance of you're either a creator or a challenger within a category because that'll help you identify gaps and do the right types of research when you when you define for category. And then again identity alignment.

We we tend to I think Nando's is always a great example aligned with with local values.

Whereas US assumes or wants cultural you know alignment with cultural movements. That's where that politics conversation comes into play again and becomes quite risky.

But there is an expectation for US brands to stand for something. Be very clever in what you pick to avoid politics, to avoid just misunderstanding. Because again, the the US culture is not nearly the same as as South Africa and then obviously obvious things like vernacular those types of things can be quite different. Alright so hopefully that gives you guys some clues and insights as how to evaluate or rethink brand positioning within the US and some key differences between SA and South African brands. I'm going to jump on to quite a scary slide.

Insights from the CMO Survey

So this is a very valuable resource for those of you guys not familiar with it. This is a report that I study quite intensely on an annual basis and I check-in on the quarterly releases. So it's the CMO survey. There's a sort of a link to it at the bottom there of the highlights that I've pulled into this presentation.

Don't get too hung up on these ratios at the moment because those gaps are quite broad. But I want to highlight a few critical things. Just by the way, this survey is a very big US based survey that gets published annually where they actually go and audit thousands of companies of marketing spend. So they go into multiple sectors and industries and they determine how marketing budget and spend is applied.

They try to measure return on investment. It's a very very valuable read anyone within the marketing space to get a good understanding of how that works in the US landscape. But what hopefully some of you have already recognized is if I was to go to one of our South African clients and I tell them that you need to spend twenty two point six percent on your marketing budget for the year, I'll give them a heart attack. They would absolutely well, they wouldn't need to, firstly, because it would be ridiculous for them to spend that type of type of a ratio.

But in the US, that's what you're competing against. So why this slide to me is very critical for any brand looking to enter into the market is, this is not to suggest you need to spend this much, not at all. Because I don't I don't think it's necessary quite at that extent. But you do need to know what you're competing against.

Right? So you do need to know. If you're going to try and launch a new product, let's, for the sake of example, an FMCG brand into the retail environment, you need to know that your competitors are on average spending between twelve and twenty two percent on their marketing budgets. So that's what they've got at their disposal to play with.

You need to go and be competitive. So either you're going to be have to be very lean and maverick about your approach and and you know, really do some really great amazing gorilla type tactics or you're going to have to go and pay to play. But you need to be Sorry. Say that again.

Sorry. I thought I heard someone ask a question. No.

I I think someone's mute my Mike was was not up. That's fine. Go for it, Ethan.

Okay. No minute. Okay. But, I mean, I'm not gonna dive into this. Most of you probably have scanned through this already knowing what industry you're in and, you know, gauging gauging from that.

But I recommend going and downloading the the CMO survey. And then I'll leave you with the last point. Again, thinking back to those ratios I mentioned to you earlier with regards to the difference in size in, know, GDP, retail environment, e com spend.

Look at how devastating this is. Is their ratio of marketing spend compared to South Africa in the same economy is two fifty to one.

That should explain to you and let everyone or help everyone to understand why those percentages are also so much higher than what we're used to in South Africa. Within South African context. The marketing landscape on its own is also just completely out of balance, competitive than what it is in in in South Africa. So scary one to keep in the back of your mind and and consider the the competition is really really tight.

Retail and Channel Strategy Considerations

Alright. This this might not be relevant to to everyone but I thought let me just unpack some of the the nuances with regards to retail and channel strategy within the US as well. So again, considering the size of the economy, know, there's a lot of considerations that need to take place. Are you going to go direct to consumer?

So that was you just going to launch a Shopify site or sell via other dot com platforms. Are you going to try the Amazon route? Are you going to try the retail route? Are you going to go with resellers or distributors?

There's so many options when it comes to major pathways into the US market. I'll help you identify later sort of how how to approach that. But things that are irrespective of channel, which you just need to know are different. So so this is not to really say that it's hard or it's a major challenge.

You just need to be aware of the fact that there's these these things are very different in the US than what it is in South Africa. So I'll start with trade considerations. So things like packaging specs. They require tamper evidence.

You know pallet configurations are different in South Africa. So so you have to be aware of that and plan for that and consider that in your planning and costing models.

Logistics, very, very different. America's massive.

We we you can't think about it like it is South Africa. You need to think about it like it's Africa. Right? So so logistics, the amount of different retailers and distributors and courier companies, etcetera that you need to work with.

So so things like stacking limits are very different. Pallet standards are very different. Lot of obvious things that are just different within the US. This is a subtle one but again retail payment terms, if you don't understand how different this is from South Africa, you could get into trouble.

So, you know, you're looking at a net ninety day payment term with most retailers within the United States. Add on to that shipping, manufacturing if you get a big order you could very easily look at you know a six month to eight month period before cash flow becomes an issue or you know becomes available for you as a brand or a company. So very important that consideration as well. You know payment terms work differently in the US than what it does in South Africa.

Cultural Differences in Retail Marketing

In store marketing requirements is this is quite a big one and and I can probably do a talk to you guys about this on its own. But in South African culture and I've we've I've I've just seen this so many occasions. There's this understanding and expectation that if I get a listing, if I get listed by ShopRite Checkers or Spa or Woolworths or Pick n Pay or any one of the big retail companies in the country. It's it's cause for celebration.

We've made it. We've won. We've got this amazing listing. My product's going to move off shelf.

Right? There there's that there's that expectation. And and the retailers will help and support. In in the United States, it's not the same at all.

The I believe and I have often described this is once you get that listing, that's when your real risk begins. Because in the US, the key is not to get on the shelf. The key is to get off the shelf.

Getting listings in South Africa because of that churn that I mentioned earlier and that cultural difference of being if if you you'll get a listing fairly easily within the United States because there's just so many options and so many clients. But what you have to understand is your brand's responsibility continues after that period and you actually have to now engage with multiple options to get your product off the shelf.

It's a big part of our company or our business is actually to help brands once they've gotten that listing. Alright how are we going to actually drive traffic? Whether it's a store or online or wherever to help with sales through so that the the order cycle can start building and and continue to grow. So, the expectations on in store marketing, completely different level to what it is in in South Africa.

And this is just the I wanna use an example here, initial purchase orders.

NextGrill, that client that I spoke with you guys about earlier. Now imagine if you're a company that does thirty million dollars annual revenue, but you've got one client Home Depot and your first order with them is one hundred and twenty million dollars Right? Imagine the implications that has on a business. If you don't have the necessary financial backing infrastructure etcetera. You just picked completely the wrong channel to go and target.

So it's very very important to understand that a small retail chain in the US is still bigger than probably many of our biggest retail chains within the US. So so make sure that you do those to just do the math before you start deciding which retailers to target or which distributed challenge to target or you know before before you get very excited about the the growth potential. Understand the impact that could have on your infrastructure and your your costing model. Because this is a specific spot where we've seen quite a few companies go from very excited to very deep troubled waters very quickly.

Navigating Chargebacks and Compliance

And then the last one which is purely relevant if you're going to be importing is, you know, chargebacks and compliance. So because a lot of the not a lot. Most of the retail environments in the US is on EDI systems. So it's all electronic. So you don't have that flexibility like with South African retail where you can negotiate a late delivery or extend time frames if you've ran into problems. It's automated and a lot of those are you know comes with heavy penalties and fines attached to it.

Or simply just losing a a big a big client or a big contract. So make sure that this is on point if you're going to be going to the US. Make sure that you really understand what the expectations are. Make sure that your data is correct because again, a big shipment to the US, let's use an example, if you've got a great order from Sam's Club and you accidentally run into some type of an issue at the docks and your shipment arrives thirty days late, that could have a massive, massive cost effect on your on that specific order, taking away all the margin that you've got within that order. So, okay, so that's just a few key insights on channel strategy. I'm going jump over to the next one.

This is quite quite meaningful and hopefully you guys I'll share this presentation afterwards if anyone needs to make note, take notes of any of this stuff. But these these are just a few of the hidden mind fields that we've again, brands go through a lot of effort and work to prep themselves for the US, but they never considered these things and these things end up being a major, major obstacle in the road.

First one, trademark registration.

Again, you're going to the world's most competitive market, massively saturated, highly competitive. If you go and launch something meaningful there and it's not protected, the odds of copycats taking over or legal disputes opening up is very, very high probability, very high. So make sure that you enter the market with your trademarks firstly vetted and tested.

You know, is it ownable within within the space and if it is, make sure that you've got the rights to it and that you can own it so that you can't be copied or that you get don't get into legal issues. It's a very very different world in the US. You all probably aware of FDA and FTC compliance.

But again I'll urge you to pay close attention to it because a lot of companies think they qualify whereas especially in FMCG as an example most African companies need to make changes to ingredient lists and you know packaging formats. A lot of a lot of changes are required just to get compliant with with FDA and FTC.

Understanding Tariff Regulations

Important tariff regulations. I think you guys are all aware of how complex that is especially at the moment. You know, there's a lot of tension within that space. But again, it's something that if you get that slightly wrong, it could have massive ripple effects for a brand.

If you're in agriculture, then USDA or not just if you're in agriculture, if you're in agriculture or you use any of the ingredients on that list, USDA becomes an incredibly important you know, governance or or stakeholder within your within your process.

Not too hard to navigate but a lot of documentation and you know loops that you need to that you need to jump through but keep them on your list of considerations if you've got those types of products.

This is a very important one. If you're not aware of how aggressive the litigation culture is in the United States.

Do not launch any type of product in the US if you haven't done proper homework and you've if you've got liability insurance in place.

Again, the South African culture and business owners in South Africa are not aware of how volatile and risky it is to to to grow a brand and build a business within the US. Litigation is very real. It's very frequent and it's very aggressive in the state. So make sure that you set up with the right types of insurance.

On that side this is just a bit of a side note. So even though the US is governed as as one country, states have their own independent regulations as well.

The best example is the California Prop sixty five regulation body. So I know Texas is quite heavy and New York is quite heavy as well but most states have them and you need to consider that yes, FDA and FTC is is critically important, but you do need to go and review those state based regulations as well to make sure that you comply with that state if your channel strategy includes that state as well. And then last one, the e commerce has a separate set of compliance that is required. Amazon being a very good example. So Amazon can oftenly often request third party testing as an example. They've got GS one barcode requirements which is very different and specific.

E-commerce Compliance Requirements

And there's also just compliance documents to to stay listed with them. That's that's quite important. So keep in mind that if you're going to go to Walmart. Com or you know Amazon or any of those. Com platforms that there's a separate set of compliance regulations that applies to them as well.

So get used to completing some paperwork. It's essentially what I'm what I'm trying to tell you guys because it's very real and frequent within the US space.

Alright.

So hopefully at this stage I haven't freaked anyone out too much and and not exaggerated too much sort of the the size and the complexity and and all the the loops that you have to jump through.

The idea is just that I wanted to share as much information as I could about exactly how complex and saturated it is. But the principle is still that it's all worth it. I'm just going to read this quote.

The United States is one of the most competitive and complex market in the world, but also one of the most rewarding for companies that do their homework and understand the landscape.

So and it's it's really the case. So so yes, it's complex and it's daunting and you know, all of the information that I just shared with you is very real and you know, stuff that you really have to understand. But if you actually go and get it right, will also be the most rewarding thing that you've ever done for your business because it is the world's largest market. And if you go if you're gonna be successful there, it is the ultimate and the pinnacle of of of success for a brand or a or a product or a company.

So what I'm gonna do now is I'm gonna try and take you guys through my thinking here just before I jump in. My thinking here was if I was to launch a brand or or our company was to launch a brand for ourselves within the US, how would how would we approach it? What would be the step by step approach to doing that? So that's kind of what I tried to do.

I broke it into four different phases. I'll take you guys through how to approach it. So you can almost see this as a due diligence process, if that makes sense. What are the phases of thinking that you need to go through?

What are the homework that you need to do to get to the stage where you can really consider it and be aggressive and be competitive within the US within the US landscape. So first phase would be validation.

So this this really to avoid spending unnecessary money if you know the odds of success just is minimal or you know it's not relevant or realistic for you to go and be competitive within the US landscape. So I would start with competitive benchmarking. So detailed competitor understanding. This is to do gap analysis.

It is to do understand pricing models, you know, positioning of competitor landscape. Very important to have a thorough understanding of what is happening within the competitor landscape in the US. You can use retail audits, Amazon listings, social listening, there's a lot of research reports within you know category reports available. So there's a lot of ways to get that information.

It's quite easy to access.

Just hard to synthesize and you know get to the actual insights. Next step is I would look at product and regulatory fit. I think I've spent enough time now already explaining to you how risky those waters are. But you need to actually go and do the homework now and go and make sure that you know, what adjustments your product needs to make, you know, what packaging adjustments you need to make.

You know, everything that I just mentioned to you during this phase needs to go and be evaluated. You need to go and sit and say alright do I check all the necessary boxes to be competitive? If not what is the implication? Make sure you understand that well both from a logistics, a cost, all of those those types of things.

And then, you know, at this stage, do whatever adjustment is required in formulation, packaging, sizing, shelf, all of those types of things. And then, I think the probably the most important one in all of this is then do a very sophisticated financial model. You as the entrepreneur, with all the information that you're going to get during this phase, are going to be able to now go and actually assess what is your manufacturing cost, shipping costs, tariffs, all of these registration fees. I'll I'm going help you guys now with the quick little summary of what those key cost breakdowns are that you need to consider but you need to take all of that into consideration and then be very real and transparent with yourself.

Can I be competitive within the market?

Because the answer is unfortunately not always yes. And this is the worst place in the world to go and try something and fail because it's really expensive to go and try.

So you want to make sure at this at this stage that you do a proper model to go and determine all things considered, all of these costs and all of these learnings considered, can I actually go and be competitive within the US space? Because the juice isn't worth the squeeze if this part of the equation doesn't work out. Alright, so that that covers the validation stage. Then I would go into determining focus.

Determining Market Focus and Entry Strategy

You this I would depending on your level of expertise and depending on if you've done you know entries into other you know geographical locations that might this might either be one of those where you need some help to get through this phase or you can tackle it on your own first and see if you're comfortable but you you need to make decisions as to your how are you going to enter the US market? So are you going to go state versus country? What channels are you going to use and what retail pathways are are your options if retail is on your on your equation? So simply put, you know, the the GDP of California is much much larger than the entire, you know, South Africa as an example. So you could very easily decide if the example that I use in here, if you've got a wellness product, you might decide that look, I'm just going to roll out in California initially.

That would change your entire strategy because now suddenly the retail partners that are available to you are completely different. So now you're going to go and look at California based retail chains and you know resellers or you know brand or partnership fits as opposed to you know you know national or regional rollouts. So very important to understand that very big difference between states in the US because you almost need to see each state as a different country essentially unless you have the scale and capabilities to actually go national or semi regional within within the US. But that

determination initially is mission critical to do correctly and to be realistic with yourself. Your company's abilities and infrastructure capacity to make the right decision at that stage. Then you're going to go into channel like is you know what channels are you going to be playing on is it going to be Amazon only is it going to be DTC only? Is it going be Amazon and DTC?

Is it going to be Amazon DTC distributors? Is it going to be Amazon DTC or resellers? You need to make sure that you understand again matching up all of the stuff that I mentioned earlier to what channels you're going to be focusing on and have a very very specific strategy in place on how you're going to target those strategies. You'll see a bit later on that everything I'm mentioning now also has budget implications, right?

And timing implications.

I mean the the last one I'm I've I think I've spoken enough about this already but it's the retail pathways. So again each channel has different pathways within the channel that you can you can attack that channel with. Example, if you're going to go and look at the restaurant trade. To to access that restaurant trade, you've got a long list of different pathways to enter that market.

You can go via an influencer strategy. You can go via distributor strategy. You can go via a third party logistics partnership. You can, you know, try and go, you know, opening up via trade shows.

There's so many different pathways that you can pick on. You need to determine, match your budget to your result and and probability. So do that exercise really well and have that mapped out and and you know enough clarity so that you can focus on it and you know spend the necessary money on the right spots as as opposed opposed to like a shotgun approach because that just won't work in that size market.

Launch Planning for Market Traction

Third phase is launch planning.

This this gets into alright. If now if if I'm now going into the market, how would I start getting the necessary traction within within that landscape? So, again, I've mentioned this in one of the previous slide, but you need to reevaluate your positioning. Go and find that why do you matter to the US consumer and how am I going to articulate that into our offering, our brand story, product positioning. Just the entire articulation and messaging strategy around your brand needs to go. You need to go and make sure that it's really, really spot on. So do that exercise during this phase.

Then consider your performance marketing. Again, this is relevant irrespective of business type, irrespective of channel, irrespective of strategy. You're going to need performance marketing within the US space. Because of the economy of scale, because of how big the ecosystem is there, you're going to need to, even if you get a listing with Walmart and sorry, especially if you get a listing with one of the big retailers you know you pushing the brand and pushing consumer engagement affinity all of those important things are going to be important so make sure that you have a very good plan and the required infrastructure to be able to go and execute on that And obviously budget allocation for that as well.

I'm mentioning ten to fifteen percent there now but I would use the CMO survey that I that I gave to you guys as a reference earlier to help you determine what that needs to be. And then start start setting up your earned and owned ecosystems and channels as well. So this would be a good stage to go and check what can you own.

Start you know putting putting the infrastructure there to be able to support and drive and grow them. And again just make the decisions as to what's going to be relevant and and how you're going to mature and build those those media channels.

And the last phase is really about scale planning. So again, this might be a space where you start needing get some expert advice in. But very important to have these conversations and have this mental process activated during during this consideration phase. So fulfillment and customer experience.

So I've explained to you how big the difference is between customer experience expectations in the US versus in South Africa. That takes infrastructure. To be able to fulfill customer experience and just standard fulfillment in the US is a mammoth task. And the requirements from an infrastructure point of view is just massive.

Leveraging Data for Competitive Advantage

So go and do that equation and the exercise of if I'm successful, if I get traction in the US, what will that imply? What will that need? You know, what infrastructure will I need to be able to support that? And be again very realistic and transparent because this could be otherwise you're going become part of the statistics of, you know, the companies that just end up growing quickly but then failing directly after that.

Data within such a competitive landscape, that's sort of the next point is analytics first, leverage data, access to data is critical. So make sure that whatever ecosystems you've built, luckily, most of the third party people that you'll be engaging with in the US, whether it's distributors, online platforms, the volume and clarity and insights to data that is provided is already much more sophisticated than what we're used to. But your own channels need to now get that data visibility and you just you need to have an ecosystem to get it set up. The obvious things like Google Analytics, know, Meta Pixel, Klaviyo, whatever CRM you're going to be using to manage relationships, make sure that you've got access to high level data because growth in the US is going to be dependent on you being able to you need to know what your cost of, you know, customer acquisition cost is.

You need to know what your life cycle or life stage value is of your clients, return on ad spend, all those little buzzwords and keywords that we use all the time becomes really critical to micromanage in a competitive landscape. So so again, make sure that you plan out your your data layer over whatever you're going to be doing so that you've got really good quality information available to make really good quality decisions on. And then the last one is just make sure that you've set up a feedback loop. You don't go into this with this sentiment or the thinking or the planning that it's gonna be done and dusted round one.

Establishing a Feedback Loop

You have to go in with a sentiment of I'm gonna be reviewing this entire ecosystem on a fairly regular basis to make sure it's tweaked and matured to where it needs to be. Again, otherwise you're going to just end up with a lot of resentment and get tired of the fight way too early because it is a tough fight. I'm going to spend some time quickly on timelines now after this as well. Alright guys I again I feel bad for rushing through so much information in such a short period of time but there I'm trying to leave some time available at the end of the talk for questions as well.

I'm gonna keep going until unless someone stops me.

Alright. This I just built in a slide to I actually considered leaving this out because it it it could be seen as as not as relevant but I still decided to leave it in. I just wanted to give you guys some type of a benchmark as to from our learnings and and we haven't been involved with a thousand of these. We've been involved with a few hundred of these types of of setups and build outs.

But in our understanding and knowledge, you're looking at this sort of as rough estimates of where you're gonna need to start and play. And these costs in most instances are gonna be required. So you've got legal and regulatory somewhere between ten and fifty thousand dollars Logistics and warehousing somewhere between I mean that could get ridiculous depending on you can imagine if you're going to start building your own warehouses in each state in the US you're talking about millions of dollars but so we're being very conservative and assuming a slower type of entry to market where you've got partnerships or that type of thing you're looking at.

For setup fees, you're looking at between thirty and two hundred thousand dollars Channel development becomes quite aggressive. That that cost model in there is is if you if you use a partner or a sales distribution agent to start helping you set that up.

Trade spend and retail demos again very dependent on order sizes but you you need to know that that a percentage of revenue needs to be allocated to that DTC build. So again even if you don't sell direct to consumer on your site, having a site that's active and allows for that customer experience and feedback, etcetera, needs to be developed for the US as well.

Marketing and brand launch, that's quite a big big component of it and then your infrastructure requirements on the ground. So pay pay little attention to these numbers that I'm adding in here because I was really just spitballing rough figures out there. But pay attention to the fact that for you to go and attempt entry into the US market, you're not looking at a five hundred thousand or eight hundred thousand or a million rand exercise. You're looking at a five, ten, twenty, fifty million rand exercise to go and try and build a business within the US.

So you need to think at that scale if you're going to go into the US market. Would be my recommendation and I'm pretty sure that a lot of people are going to disagree with that sentiment and going to say yes but there's organic ways to approach it and there's there's faster and easier ways to to navigate these waters. But in our learnings, in our understanding and in the the history and the track record that we've built in doing this successfully in the US, It takes a lot of initial energy and capital to do it the right way. And if you don't do it the right way, your odds of success, just your probability of being successful because of the size and competitiveness is just so small.

Evaluating Market Viability

So I would I would recommend that you if you're considering the US market because you want to grow your revenue with example ten million rand. I would suggest fifty other alternatives than the US market. It's just not worth it. You don't you don't go to a beast this size for such a small requirement, right?

Then then go and go to Australia or the UK where entry is a lot easier, saturation is a lot less. There's so many other easier options. Or you'll probably be able to extract that just locally in South Africa for most brands. So you need to have serious growth appetite if you want to go into this market because you need to be able to justify ten, twenty, thirty million dollars initial investment expense to set things up.

You're to have to carry that cash flow for one or two years because break even in this market also doesn't happen in year one.

So I hope I'm not over amplifying the point or again going too far with it, but make sure that you understand the cost required to get into the market and that you've got appetite for that growth.

Because it's achievable. It's right there but you need to know what you're up for and you know plan accordingly.

And that's where this slide comes in. It's there are a lot of ways to do it. There's a lot of ways to if if you've got the capital and you can fund it yourself, then great. Do that.

But you might consider a lesser you know a lower risk, maybe a little bit slower approach into the market. If that's going to be the case. If you're going to go and if you're looking at private equity or investment companies, again, the US market is a lot more open to that type of approach. It's a lot easier to find capital in the US than what it is in South Africa.

So very viable you know in I I made an example there beverages, wellness, pet, better for you categories or hungry for investment opportunities. So it's quite easy to get access to capital in the US. But obviously that comes with sacrifices. That comes with shareholders and you know returns that that needs to go elsewhere if you if you take that approach but very very viable.

And then obviously there's joint venture and licensing approaches which a lot of company companies opt for initially because it's the easiest funding mechanism to get into the market. Just go signed up a license. Just go license your product to someone in the US who's already got the infrastructure. But they often regret that decision long term as the brand grows and they scale because now they've lacked they don't have the control they used to have over their brand and obviously they've diluted a lot of margin and equity in in the process.

Navigating Brand Control and Licensing

So I'm not trying to give advice here. This is not my area of expertise. I'm I'm purely saying that because of what it takes to to get into the US market because of the the capital requirements of being successful in the world's most competitive market. You need to have an investment.

Last slide, I think I've alluded to this already, there is manage your expectations with regards to how long it's going to take to mature in the US market and to determine whether you've been successful or not. You don't go to the US and expect break even in year one, which I know in South African terminology can be, you know, it's very easy to achieve that locally. In the US again, just too competitive, too big. We always say that determining market fit in year one is a big enough KPI on its own.

Find that certainty and clarity that what I've come up with, you know, the feedback loops that you've gone through my product is right for the market. Year two, you'll use to at least make your either a specific region or a specific channel or a specific pathway profitable and find that break even from that point of view and then from year three, you'll be able to make some profit grow and you know really build massive massive value in in the state. So again just a little bit of expectation management from that point of view.

And then yeah, this is the last slide so I hope I haven't bought you guys to death that is that is really the last little bit. I want to leave with you all. It's big. It's brutal, but it's full of opportunity if you don't plan for complexity complexity will punish you, but if you do it right, it will change your brand's trajectory forever. So hope there were some insights in there for you guys.

Etienne, can I just say that was most informative? Amazing. It was fantastic, must say. It makes me think twice about a product to go into the US, I'm not going to lie. It seems like a massive behemoth.

We'll be sharing this with every product based founder that joins the network that wants to go into the US because there's a lot of things to consider here. And I'll start the questions with two, and then I'll hand over to the room. But is there a market that you would maybe recommend a product could test to go external? So say we have South African product that wants to go external, we want to go to the US.

Exploring Alternative Markets

Is there another market that's a little bit less intense than the US that could test an externalized thing before we go and do the US expansion? I don't know if you can give us that information. And then also tariffs. Do we do this now?

Do we wait for the storm to pass? I mean, what is recommendation on that side?

Yeah, both two really good questions. Unfortunately, my answer to the first question, is there another market that you can go and test US viability in?

Had that sentiment several years ago. So, several years ago I had a) the sentiment that let's go and test in the UK or Australia because we can use those learnings, leverage them and expand into the US. We learned very abruptly and you know, through a lot of pain that it's just too different. It's just too complex and too different to actually take those learnings and make it viable.

So, unfortunately my answer there is no. If you want to go play in the US, follow that process that I told you guys now, go and it's going to cost you a lot less to go through that learning period or process than the investment required to go into a test market first and then expanding into the US.

You know, it's just too big and competitive to go and evaluate it. Well we've been successful with what Next Grill again is a very good example of a brand that we were quite successful in several Scandinavian countries. We launched very successfully into Germany. We had a lot of success in Australia and the Mega Master brand, we originally launched into the US was just completely flopped. Couldn't get traction, couldn't get listings.

It was a nightmare. That's where the whole next grill you know, reinvention had to happen. We went through several years of really fighting and battling to get traction within that market but once we figured it out, I mean the rest is history, they just grew immensely everything after that.

So no, we haven't got a solution to another market that's going to give you the learnings you need. On tariffs, I don't think the complexity of the landscape is going to go away anytime soon. I'm not an economic or an economist or a specialist within the area, but this is not the first time that we've had these tariff conversations. It's public now, So a lot of people are aware of it right now because of how public domain the conversations are. But over the last eight years, we've been hit with tariff conversations and changes within tariffs and complexities, you know, China, US arguments and conversations. This is not new.

Addressing Tariff Concerns

It's been going on for years. It's just, know, Donald Trump is just saying he has a tariff for you, he's like freaking tariffs, the Oprah show of tariffs at the moment happening and I wouldn't plan around the tariffs or hold back because of what's happening within tariffs your product and pricing models and everything adjusts and adopts accordingly.

And there's lot of ways to navigate it as well. There's a lot of strategies that can be used so no if you've if you the last thing that should stop you from entering the US market should be the tariffs. I would rather say find a way to navigate it and work around it would be my opinion on it.

Amazing. Makes sense, Runeet. Kirsten, let's go to you. You've got your hand up.

Yeah, thanks. Hi Etienne, that was an excellent presentation. Thank you very much for your time and serious consideration in putting it together.

On Runee's question, I would say in my experience and a lot of the stuff in my experience in being a South African and a lot of stuff that you said in the presentation, so that I grew up with a mindset as a South African that rules are there to be broken.

And that was very it's it's it's ingrained in me. And one is the biggest things that I had to get over in all the other I've lived in in seven countries and I currently live in Oslo in in Norway. One of the biggest friction points or biggest learnings for me when I came here was to get over that. You have to comply.

If you're going to, you know, you can't beat them, you've got to join them kind of mindset. And if you're going to go into the US with that mindset, like I'm just going to bullish go in there and try organically grow my business, it's just not going to work. Would you suggest, like you said, it's difficult to go into the US if there's no other testing markets. But what about, like you said, you bought property there and you've spent obviously some time in the US.

Importance of Cultural Understanding in Business

Spending some time there and getting to understand the market. Like I've worked with companies who have a large presence in the US and I understand culturally and they've also, mostly SAS businesses, struggled to enter into that market and it's taken years for us to actually grow a base there, longer than the trajectory you actually presented to us in your presentation. It takes cultural understanding and actually building employing people on the ground or having had spent some time there?

To save losing all that expense in setting up your business or trying to enter the market, just spending some time there or commuting for a while before you try?

Well, the first feedback is I love the fact that you mentioned how South Africans tend to have this culture of we'll figure it out, we'll get it done, we'll do it now and say sorry later, which is it's so great because it's so ingrained in our culture and we get away with it in South Africa and it's why as a culture we're so entrepreneurial and a lot of us are so successful in what we do, but when you go into a market like the US where there's crazy litigation culture and compliance is a very big thing, often get hit with kickback and backlash that we weren't expecting so that that tip that you just gave Kristen, I think is very valuable for everyone to understand is you you don't go and go into the US market and do it the South African way because they don't tolerate it.

It's just not tolerated and you get pushed out and if you if if that if there's even a hint of that, you'll just get pushed out of conversations and get asked to leave the room. It's really really quite aggressive in in the US.

So, that's a great piece of advice.

And then with regards to the timelines, just for the record, the timeline that I've put out there is kind of again with the brands that we've worked with, if you follow the right process, in other words, if you follow that map almost that I gave you, I would say that that is a fair benchmark. It is a realistic and a fair benchmark. But that also implies that you pull out.

Evaluating Market Fit and Strategy

Cause if you're going to go and launch a SaaS product, we work with a lot of SaaS products in the US. If you're to launch a SaaS product, but your market fit's not right, or your channel strategy is not right, that timeline is going to basically be forever.

You're never going to get to where you need to be because your initial strategy and your initial approach wasn't right. So I would highly recommend if it takes much longer than that, then either your model or your approach or your strategy wasn't right. That's what I would recommend and then it's very often a case of you need to ask yourself is is the juice worth the squeeze you know.

How how much longer are you going to invest even if it's small amounts of money into a market where you're never really going to pass the break even point point, then I would rather stick my product into a different market where you can be competitive but have a smaller piece of the pie. So, hope that makes sense, but in the US you have to approach it aggressively and you have to have a plan with what you're going go and achieve there.

It's not the type of market where you go and dabble.

The risks are too big. The costs of entry, you're going to end up finding yourself in a spot where you're not going to be successful and you're probably not going to know why. You're not going to know if your lack of success is based on market fit, trends, product quality, you're just not going to have the necessary information if you don't do the exercise properly in the beginning.

I don't know if I'm answering your question with enough accuracy, but that would be my feedback to how I understood your question.

No, you're right.

I think all those scenarios I was talking about didn't go in with the correct thoroughly thought out strategy.

Yeah, so I think that would be and there's a lot of companies that I think what makes our company as an example unique is we've got a I love South Africans and I love and I understand how differently South Africans think about the US market. So, it's easy for me to navigate those conversations with the new client and help them from where they are to where they need to be mentally and then go and address the mark.

But we're not the only companies to do that. There's a ton of companies in the US that really understand how competitive it is.

So if you're a South African, you would probably have to consider a company like us for two reasons cost. I mean it's going to be difficult to go and get a consulting company like us and pay them in dollars, but if you're out of Europe, like if I understood correctly, you're mentioning companies that are European, so it's euros.

They'll have the necessary funding and capital to go and invest in US based companies to help them navigate that.

And I would highly recommend it because like my opening slide, you don't know what you don't know, And you don't go and play in the world's most competitive, most sophisticated market without being really serious about how you approach it. You need to have a sophisticated approach. It's just it's it should be common sense right. It should be quite obvious that you're not going to go and be successful there if you don't have a really solid plan strategy approach funding everything needs to be needs to be in place Or other options that doesn't have the same risk profile that you should consider.

The Need for a Serious Approach in the US Market

So, in essence, Etienne is saying go big or stay home.

And on that note, let's go to Tamara.

Let's hear from you.

Brilliant presentation.

So I live in the UK at the moment, moved about eighteen months, and we're currently taking UK products into the US market for the past year. So a lot of sort of smiling and nodding and hard learning lessons there.

It was the cultural nuances. Just because it's English speaking across many countries doesn't mean that you your culture is the same and it's massive from South Africa to U. S. And to U. K. And elsewhere.

So our ICP is brands. So we are marketing measurement platform, so slightly different, but we basically, we've been studying and tracking sort of brands in the U. S. And the big thing that I've been focusing on the last year is events, and I found that that's been massive.

So brands going to events, everybody flies across the US and goes to all these key things. Very happy to share my learnings over the last year of where all the key events are and that brands are going to, where they're getting the learnings and all of that. So very happy to share all of that. It's cost us a fair bit to to get there.

Yeah.

And then the thing that we found is that partnerships have been a really big part of being a success just due to the scale and the complexity and the learnings that other people have done. And from a brand side perspective, how do you think partnerships could play out and what do you think the value of those are in terms of going into the U. S. Market?

Yeah, well, so again, great strategic approach.

It's why I listed it in the presentation Sorry, I did step out for five minutes, I might have missed it.

So, that was probably it.

No worries. I think, again, culturally US brands are a lot more open to partnerships than traditionally in South Africa.

So, definitely even on a high level like brand collaborations, you'll see so many more brand collaborations, high level brands. I'm talking about household brands willing to collaborate with other household brands on a fairly regular basis that they don't have the same long term view that we have on it. So, I would definitely consider partnerships, but there's so many different angles that you can look at it. You can consider partnerships as an investment segue.

So, other words, you can look at initial entry to market partnerships like with third party distributors or licensing partnerships. There's so many approaches to that, but you can also look at just sales channel partners like you can go and like I said, you can simply go and team up with Amazon and team up you know on an intimate level with the right type of influencer and you can build a successful brand in the US. That's how the economies of scale work there. It's gonna cost you a fortune initially, so you're gonna have to invest some capital to get that done initially, but it has that that market has the potential to scale from that that type of platform so partnerships has to be a key part of whatever your strategy is in any case in my opinion.

I would definitely recommend partnerships as a strong channel.

And I'm keen to chat more to you, maybe post today's call about events because again, please love to.

Love to support you.

Travel so much in the US, you know, all over the country to go to all of these events and we're kind of seeing But we benefit them all together.

Yeah, I'm going to Vegas now again in August to what's the big pet expo there in Vegas. We're going there because we've got a few brands in the pet wellness space.

Amazing.

I have a last question. It's quite a huge theme that I heard from a conference that I was at two weeks ago is about people are discovering products in different ways now, especially with the launch of AI, agentic search, all of this. So brands are having to figure out where to go and where the customers are discovering and where to meet them through a very, very different journey. How are you dealing with that? How are your brands dealing with that?

Adapting to AI and Consumer Behavior Changes

Sure. Yeah, look, AI, we're still going to learn a lot about AI. So our agency has been integrated with AI for quite some time. We've invested in AI research platforms quite a few years ago before AI was the hot topic and the trend that it is at the moment. We as an agency and as a company that's responsible for quite a few brands within the U. S. Landscape, we're very, very reliant on data.

So, every single brand within our portfolio has got a fairly sophisticated data ecosystem that feeds us information on a weekly basis basically. So, we get data reports on a very regular basis that tells us consumer shift. We integrate it with most of our brands with direct retail spend and sales data, so we can see drops, we can analyse how campaign efficiencies work between social, search, paid, all of channels where we spend, we track quite regularly and very specifically to understand when the drops happen. So, it's really a case of continuous tweaking, optimizing spend allocation and application on consistent basis. I would say the only solution to that problem is data. There's no other way to get around that problem.

Remember access to data in the US is a lot cheaper and easier than what it is in South Africa.

Congratulations for don't know, to get like IRA retail data in South Africa costs you a fortune.

In the US there's ways to get access to retail data. That's a lot more affordable and accessible.

In fact, most retailers actually just give retail clients to their if you reach a certain tier as a supplier, you can get access to that data without major major cost implications.

I actually I'm thinking about what I'm saying now not not in all instances in some retail groups, the big ones still make you pay for them like the Walmart and the and the Home Depot. They still make you pay for for retail data, but I would simply recommend that you stay very in tune and on point with your data analysis to make sure you understand the shifts and don't buy into fabs and trends too quickly.

AI is not quite going to close down the world there's still some stuff that needs to happen before that happens. Consumer behaviour doesn't change at the drop of a hat, know, fight or flight instinct. Actually, there's a super interesting article on our website about behavioural science written by one of our strategists, Candace Mason. I can share a link with you guys to go and read that article because I think that article gives a very good summary of our agency's point of view on that question and that topic.

Thanks, Etienne. Hermes, let's do one more question and then, yeah, we'll close it off.

Lessons from Global Markets Beyond the US

Thanks, Ranir.

Thank you very much Etienne, that was very good. It was a very good presentation. I would just like to emphasize I live in Dubai, in the United Arab Emirates.

Any entrepreneur, it's not only for the US market.

I see it daily in the Middle East as well, South African businesses that tries to come enter this market.

They underestimate the time it takes before you show a profit and before you actually be successful. And if you're not one hundred percent sure that you've got the capital behind you, I absolutely agree with Etienne. I know this session is about America, but it's true I think for any other market. Go the partnership route, especially in the Middle East. I would strongly advise that you go that route.

And then just to answer Tamara regarding AI and all of that and what Adrian said about the tracking, I'm glad that you guys brought it up. In the Middle East, AI is number one at the moment And there are actually now measurements that you can use with your data to see the shift of your specific market of whether they use Google in the past for searches, they move over now to LLX, like chat GTP to do their searches. You can actually track that. So, Tamara, I share that data with you if you want.

Great, always interesting.

You can go to sedus dot com, their website. It's an agency actually, it's in the Netherlands, they specialise in it.

Thanks. Fabulous.

No, fantastic. Wow, so a lot to consider. I think, yeah, it's a massive market. I think the sentiment, yeah, go big or stay home is essential.

If you're just going to go and try it out and dip your toe in, you're going to lose all your money.

That is the case. There's better ways to spend your money in South Africa than going and dipping those into the US landscape. It's too important and too big to do that.

And I think one of our mandates and maybe what we want to do in the future is help our South African brands get into the US by finding the people that can fund that expansion. I think that's key. Because if you go in with a little let's try it out sentiment, it's not going to work. You need a proper strategy backing agencies like yourself to really make it work.

And I think myself, Nick and the team, one of the mandates we're working on is to make sure that we find those people to help our brands within the network do that. Because we have amazing products within the network and we are going attract a lot more beautiful brands. So yeah, it's phenomenal to hear what you've done and how you've helped people. And we'll keep the conversation going.

But Eitan, thank you very much for being here, Nick, for setting this up. You guys have been amazing. Fantastic we've recorded this. This is going to go to all members and any new member that comes in that has a product or service that wants to come to the US, I think it's essential that they look at this just to understand the risk and the reward when they do that risk.

Closing Remarks and Future Opportunities

But amazing.

All right. Well, you guys have my email address. If anyone's got any additional questions or want to drop me a mail, feel free to do so. I'll try and get to you know all of them in in in due time. Nick and Renee, thanks for the opportunity to address the the network much appreciate that I had fun working on this presentation.

Also need to give you guys access to a few, you mentioned, know, looking for investment partners. Lucky for all of us, the US investment market loves South African entrepreneurs. So, there's a long list of introductions I can make for you guys with, you know, VC companies and investment companies in the states that that are looking for hungry South African brands with the required infrastructure to deliver. That's normally where it where it becomes tough is South African. Everyone wants to, but those who can are the ones they want to have conversations with. Happy to set you guys up with a few conversations when the timing's right. Yeah.

US Market Entry FAQs

1) What is a US Market Entry Strategy?

A structured plan for entering the American market: validate demand, select the right entity and location, map regulatory/tax obligations, choose channels (marketplaces, DTC, retail), localize brand/offer, and resource logistics, marketing, and compliance. U.S. government program SelectUSA outlines key steps and support for foreign companies planning investment and expansion.

Trade.gov

2) How should South African brands adapt positioning for U.S. consumers?

Treat “quality” as table-stakes and emphasize personal benefit, frictionless service (e.g., easy returns), direct messaging, and category cues U.S. shoppers expect. Don’t assume home-market wins will transfer—retest value props, packaging, and tone against American norms and retail realities. Your page highlights these gaps and the need for explicit U.S.-specific proof and experience design.

Magnetic Creative

3) Which channels should we prioritize—ecommerce or retail?

Plan for both. Ecommerce now represents ~16% of U.S. retail sales, making DTC and marketplaces vital for discovery and testing, while retail drives scale, velocity, and trust. Use ecommerce to validate pricing and positioning, then build retail selectively with retailer-specific activation, trade terms, and in-store support.

Census.gov

4) What regulations and taxes commonly trip up new entrants?

Three big buckets:
• Advertising must be truthful and substantiated (FTC).
• Product labeling varies by category (e.g., FDA for cosmetics/OTC).
• Sales tax: post-Wayfair economic nexus rules require collection once state thresholds are met—even without physical presence. Plan for state variation, and don’t overlook claims like “Made in USA.”

Federal Trade Commission | U.S. Food and Drug Administration | Sales Tax Institute | Reuters

5) How much budget and runway should we plan?

Budgets vary by category and model, but U.S. CMOs report marketing spend at ~7.7% of company revenue on average. For market entry, fund research, localization, compliance, channel setup, and 6–12 months of working capital to reach repeatable demand. Expect higher media and trade costs vs. SA and build contingency for retailer terms and inventory.

Marketing Brew | Magnetic Creative