With the rise of new technologies such as generative artificial intelligence (AI) and machine learning (ML), more attention is being paid to physical constraints: energy and water consumption of data centres, critical minerals needed for microchips and electrical grids, geographical bottlenecks in supply chains amid geopolitical unrest.
All of the above are hugely important and must be considered when growing a tech business. However, there are other important considerations for scaling a tech business, such as local cultural nuances. While cultural peculiarities cannot be touched physically, in order to make sure costly mistakes are avoided they shouldn't be ignored.
"Glocalisation", the ability to scale globally while adapting locally, will likely become more prominent in the coming years. An increasing number of global players have the capital, technology and infrastructure to expand internationally, but fail to do so successfully if they don't adapt their strategy and processes to local realities on the ground.
When a proven model meets local reality
One example of when local experience made all the difference is eBay's foray into China. eBay entered the market with a proven global marketplace model, but Taobao understood local buyer behaviour much better. Chinese consumers expected more direct communication with sellers before making a purchase, because trust was built through interaction, negotiation and reassurance. eBay's operating model was a complete mismatch for the local culture. The company had to effectively retreat from China's domestic consumer marketplace, shutting down its main local site and moving the business into a joint venture with TOM Online.
Importantly, emerging markets are not the only places where cultural misunderstanding can make or break a business model. Countries across developed economies can be just as unforgiving when companies underestimate local reality. Take Walmart in Germany. The U.S. retail giant made so many mistakes in that market that several case studies were written about it.
For example, Walmart didn't foresee that its low-price proposition would not be a competitive advantage in Germany, where the market is discount-led and saturated with brands offering very low prices. Additionally, the company underestimated consumer price sensitivity and didn't account for local expectations during the shopping experience. Where extra service, engagement and enthusiasm worked well in the US, in Germany people often viewed these 'extras' as disingenuous, intrusive or simply inefficient. On the operational side, the U.S. management style was not successfully adapted to local realities either. Walmart's formula of using motivational chants and group exercises to boost morale and team cohesion didn't work in Germany, where more formal workplace communication is expected.
As examples of Walmart and eBay show, a proven, scalable global model can fail when it is copied without any tweaks in a market without adapting it to local customs, workplace expectations, customer attitudes and local competitive realities. Global tech players should be careful not to repeat these mistakes, assuming that a good product is enough to scale the business. To expand across borders successfully, companies cannot ignore the importance of building trust with local customers on their terms and adapting their management style to local needs and priorities.
Local market, local rules
At SOFTSWISS, we work across the globe, providing locally relevant and legally-compliant technology to enable our clients to scale quickly and successfully across geographies.
We approach every new market by looking closely at the industry landscape on the ground, adapting our products and the way we do business to local realities.
The legal team is often the first on the ground, understanding local iGaming regulations and working with our product design teams that work to answer key questions: What do local users expect from their entertainment experience? How do they leverage our technology to build trust with their end customers?
A product that works perfectly in one market may still need to be significantly adjusted to be successful in a different market, where consumers might use different devices, expect different online experiences or need a different level of reassurance before engaging. Compliance is also key, ensuring all products are fully compliant with such things as data residency and local licensing requirements.
Payments are another important part of localisation. Preferred payment methods, payment habits and regulatory restrictions vary significantly from market to market. There is no such thing as a standard payment journey across geographies, with the rise of alternative payment methods and divergent national payment infrastructure playing an important role for both business-focused and customer-focused businesses.
Customer support is another area where localization matters. Using the local language is only the starting point. Response time, tone, preferred channels of communication and the amount of human contact required for successful customer support can differ significantly across markets.
The market tells you what the model needs
South Africa is a good example of why global scalability cannot stop at technology. When entering the market, we were aware that there are nine different licensing conditions across nine provinces. We learned that smartphone penetration is very high while access to desktop computers is extremely limited, so end users are mobile-first and product design needs to be adapted for this type of device.
We also analysed consumer habits. Older generations still value horse racing, sports betting is widely appreciated and fantasy sports is still developing.
Customer support expectations are also market-specific. South Africans expect an almost immediate response from customer service. They value human contact but may prefer email over a phone call because of cost considerations. They also don't necessarily want to use online chats, including WhatsApp, for resolving issues. These details may sound small, but they can make or break international expansion.
Flexibility at scale
While we offered best-in-class tech: resilient and stable, with 99.999% uptime maintained across 1,400+ brands, we wouldn't have succeeded in South Africa without flexibility at scale.
Our edge is that we have over 2,000 experts representing more than 50 nationalities working across time zones, with operational support that is not routed through one central hub but localised in-market. Our adaptability is rooted in market-specific research and expertise. For global companies entering new markets, this approach can help with several practical lessons.
First, the importance of giving local teams a degree of autonomy and specific decision rights. If all decisions are made centrally, local teams can be left responsible for market execution without having enough authority to adapt.
Second, while high-frequency, always-on digital business requires speed and immediate resolution of fast-evolving challenges, long-term strategic focus cannot be abandoned. Aim for stability over the next three years and make key decisions through the lens of strategic goals you want to achieve over the next several years.
Finally, be flexible and don't try to use exactly the same playbook for every country. Balance proven frameworks with market-specific insights.
The idea that one efficient cloud-based architecture can scale a business worldwide is just an illusion. People from different countries have a lot in common and regulation often follows similar principles, but the devil is in the details. Make sure that as a business with global aspirations, you understand those details and build enough flexibility to accommodate them.