Expanding into the UK
Article Date: Oct 07 2009
Azran Osman-Rani, CEO, AirAsia X
Companies opening their first office in the UK are likely to be warmly welcomed by government agencies, but there may be cultural differences to navigate. We hear from five companies which have made the move.
The British have always been champion moaners when it comes to their own country, but the nation still has its appeal as a place for foreign companies of all shapes and sizes to set up shop. Whether it’s Asian corporations seeking a European base or businesses from the US looking for a bridgehead to continental Europe, every year hundreds of foreign enterprises settle here. GrowthBusiness meets some of them and asks what the UK is like as a place to do business.
Azran Osman-Rani
CEO, AirAsia X
Sector: Aviation
Based: Kuala Lumpur, Malaysia
We started marketing AirAsia in the UK long before we announced the service. Our relationships with Manchester United and the Williams Formula 1 team created a strong foundation for the brand, and because these brands are also huge in Asia it helped our business there.
'We haven't had any legal issues'
We recognised that the 65-plus destinations we serve might not be so well known in the UK as places like Spain and Florida, with travellers assuming that South-East Asia was too expensive to get to. So, as well as promoting the destinations themselves, we emphasised the airline’s low cost and the network that enables customers to build an itinerary around the region without having to backtrack.
In many ways, the expansion into the UK has been pretty straightforward. The UK market is used to buying online and not using travel agents, and 95 per cent of our business comes direct via AirAsia.com – though we do provide a local-rate reservation hotline for UK customers if they have any questions about our destinations or services.
We haven’t had any issues with legislation or tax in the UK either; we operate in countries as diverse as Australia and Myanmar so we are used to national differences in doing business.
What’s really important for Asian companies looking to break the UK market is to spend the time and money establishing a strong brand. Put a face on that brand (in our case the AirAsia girls and our founder Tony Fernandes) and show that the service you provide is fun – too often Brits think Asian companies are a bit stuffy.
Albin Serviant
CEO, MXP4
Sector: Interactive online music
Based: Paris, France
When I joined the company in January, my strong conviction was that we needed an office in the UK, followed by a move into the US. We met former employees of Last.fm, who were all English, and that was our key to understanding the market. Three of them are now part of the management committee. Another important push was to sign up UK artists [to release their music on MXP4.com]. We’ve got artists like Lily Allen, Pet Shop Boys and Bat for Lashes involved.
'The UK is faster at doing business'
People say an internet business can be based anywhere, but the music industry is all about personal connections. It’s important to deal face-to-face with the artists’ managers because they are so powerful. For most of the deals we have signed in the UK it’s been directly with managers. Also, a lot of big music companies like EMI have their European bases in the UK. That’s why we needed the business development side to be in London – we’re currently looking at some places in Shoreditch – though the technical development side will remain in Paris.
As far as doing business is concerned, the UK is faster than any other country. You get a yes or no answer and you get it very quickly. It’s also easier to approach managers and artists: I don’t know why, but it’s just a fact. The UK is also our biggest country in terms of web traffic – 55 to 60 per cent on a daily basis. In terms of paperwork and legislation, it’s too early to tell how easy or expensive that’s going to be, but if there’s something we need to do then we’ll do it.
Colleen Jolly
Managing director (UK), 24 Hour Company
Sector: Design
Based: Virginia, USA
We officially launched in the UK last year after we realised that no-one here was offering exactly the service we offer: helping companies design presentations and literature to assist them in winning big government contracts. Because we speak the same language (sometimes) we figured it would be a softer landing. There’s a great infrastructure offering support and advice for businesses setting up here; Locate in Kent was very helpful.
'People have to meet and like you'
The biggest difference is in business culture. In the US, people will call us out of the blue, from any state, and start working with us, perhaps just on the basis of a recommendation. We may never meet in person. In the UK, if people don’t meet you and like you, they don’t want to do business with you. It’s more of a dance – they’ll want to meet you a couple of times and ask questions.
All our visual communications, including our logo and website, have been completely rebranded for the UK. We have a more European look, with flat, clean blocks of colour rather than montages or collages of photos. The last thing we want is to look like a US website.
As far as regulation is concerned, I have driven my poor solicitors nuts asking about VAT, which we don’t have in the US. In the US we are quite fond of firing people randomly; in the UK you can’t do that. There are lots more holidays here, while in the US people work themselves to death. In fact, I rather like the UK culture, which is my selfish reason for wanting to work here.
Malcolm Higgins
Country Manager (UK), Enex TestLab
Sector: IT testing
Based: Melbourne, Australia
Enex TestLab was spun out of RMIT University in Melbourne six years ago. Since then it has expanded in South-East Asia and is particularly strong in government circles. Two years ago, the company secured a contract to become a test lab for the UK government’s IT accreditation scheme and I was brought in to help with the planned expansion. We secured £300,000 through the Welsh Assembly, which took all of last year, and an office was set up in Cwmbran, South Wales.
'The red tape has been a shock'
Enex in Australia has been operating for 20 years, and they have some great clients such as Symantec, Microsoft and Intel. However, it’s not a given that you will win the UK arms of those companies as clients when you move over here. It’s easier to get an introduction to the right person, which is a big help, but you still have to make a good business case and have a sharp pencil to get the price right.
In this country, as soon as you reach the five-staff threshold, a lot of employment legislation kicks in, which appears to be much more onerous than in Australia. The red tape has been quite a shock to the founding directors, and everything costs a lot more here too.
Although the cultures of the UK and Australia are quite similar, that can lull you into a false sense of security. It’s worth remembering that things are still done in a more formal way in Britain. It’s not uncommon for me to edit emails, letters and presentations for a UK audience because they are not phrased in a way that people would be comfortable with here.
John Bendel
Founder and owner, OH2 International
Sector: Translation services
Based: Barcelona, Spain
I founded the company in 1991, a year before the Barcelona Olympics, which really put the city on the map. We started off in translation and language training, but we’ve increasingly moved into helping businesses go through the whole export process.
'The biggest surprise was how well things work'
We’ve always had clients all over Europe, but this year we’ve opened our first office outside Spain, in the West Midlands. I’m from the UK but I’d been living in Spain since 1982 so there was a bit of a reverse culture shock in coming back here. But the biggest surprise was realising how well things work. I don’t think Brits realise how good we are at doing business – the whole business services culture, the use of technology and the internet here is much more sophisticated than in Europe in general. Even the banks are more helpful.
The most common question I get asked is, ‘Why on earth did you leave Spain to come and live in the UK?’ But the reality is that a lot of things are easier. For example, you can pay your tax and national insurance online in the UK; in Spain only the owner of the company can sign the form and it has to be done on a certain day before 2pm.
We’ve received tremendous help from Advantage West Midlands, who gave us a lot of information and contacts. Then we received an invitation to open our office on the University Science Park in Keele, rent-free for the first six months. It was a good welcome and we’re planning to open another office in Nottingham before the end of the year.
