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+150% of revenue: how an IT startup can successfully enter foreign markets

Editorial staff Forbes.kz He shares a business scaling guide from Meir Adilzhanov, Chief Specialist for New markets at 1Fit International company, one of the fastest growing IT startups from Central Asia.

Today, 1Fit is a cash flow positive startup with a profitable unit economy and healthy metrics such as a 72% gross profit margin. Meir Adilzhanov, Chief New Markets Officer at 1Fit, explained how to proceed if you plan to expand your business to foreign markets.

— Today we are the largest fitness company in Kazakhstan, and in 2021 we set ourselves the task of surpassing the best World Class profit figures, we succeeded - in 2021 we made $4.5 million in revenue. Even then, there was an understanding that it was time to go beyond Kazakhstan. We decided to try our hand in Russia, and St. Petersburg was chosen as the first city for expansion. An important point: we analyzed the market in detail and actively studied the competitors. When choosing between Moscow and St. Petersburg, we collected as much information as possible, our main competitor in Russia was FitMost, we analyzed their data and made sure that it was better to launch in St. Petersburg, since its market is as similar as possible to Almaty, and everything is heterogeneous in Moscow," says an expert on new markets.

The Council: study your competitors as well as possible. Through open queries, any sources, anything that comes into your hands, everything will be useful. 

"We were successful in Russia, but because of the outbreak of war, we decided not to develop our business there and focused on other countries," Meir recalled.

1Fit decided to continue expanding its business and organized a launch in Uzbekistan and Kyrgyzstan. "The first thing we did was go exploring, and it was a trip to potentially attractive countries that showed what we could really expect," Meir notes.

— Uzbekistan turned out to be different from how we imagined it, initially we thought that Tashkent was a little behind Almaty. But when we got there, we realized how much we were mistaken: Tashkent has a huge potential, because the state supports startups and pours a lot of money into the IT industry. Uzbekistan is striving to make IT exports worth a billion dollars. The trip gave us an understanding that there are all chances for the successful development of our business in Tashkent.

The launch in Tashkent is in July 2022, 1Fit's revenue in the first month was $11,000, in December it was more than $100,000. In 2023, revenue in January and February amounted to $177,000.

The launch in Bishkek is in August 2022, the company earned $4,400 in the first month, and in December revenue amounted to $87,000, thus increasing the increase by 20 times in 5 months.

"In 5 months, the operating companies in Tashkent and Bishkek have started to fully support themselves," Meir Adilzhanov comments on the indicators.

— Be sure to make contacts, visit forums, meet the same startups, find the people you need. The more contacts you have, the easier it will be for you to launch! – the expert shares.

According to Meir, a comprehensive study of the market and a trip to a new country will help you understand the real situation, get the right contacts and overcome the fear of starting.

— Until you see it, you don't talk, it's like you're building barricades for yourself, it seems that everything will be difficult. But when you come and get to know the locals, you realize that these are the same people, they have the same needs and they want to go to the gym, plus or minus in their region, they earn the same as customers in Kazakhstan. From this point of view, it is absolutely necessary to come, see, and see everything. Thanks to this experience, we no longer have any fear of launching anywhere! – emphasizes Chief New Markets Officer 1Fit.

After the launches in Russia, Uzbekistan and Kyrgyzstan, 1Fit decided to conquer the UK as well. According to Meir, the company has already formed a clear vision of which specialists are needed at each stage of building business processes in new countries.

— We have everything in-house: product team, back office, marketing. Since the scheme has already been debugged and worked out, everything goes quickly and smoothly at the initial stage. And in the future, when we realize that there is potential and we will grow, we begin to assemble a separate team for the new country, which is responsible for the development of the region. An important feature of 1Fit is that the business scales in new countries by choosing one of the most attractive cities. For example, even in his native Kazakhstan, he only works in four major cities. Every business is unique, and I advise you to experiment and find the solutions that are right for you. Over the past 4 years, we have managed to build basic launch guidelines, but with each new launch we learn something new and grow," the company's top manager shares his experience.

Launching in new countries suggests that you may encounter a number of difficulties at first, until you get the hang of it.

— When we launched in Uzbekistan and Kyrgyzstan, we had major difficulties with personnel: there are a lot of talented guys in these markets, but they either quickly find good jobs or leave. Personnel is one of the main problems of neighboring countries.

Other difficulties are mental: each country has its own culture, and somewhere you can say some things directly, and somewhere you need to look for a different approach.

— For example, in order to reach the PLP (decision makers), it was necessary to be sophisticated, administrators and staff of the halls were reluctant to give their contacts. They saw us as competitors and were in no hurry to meet them halfway, although objectively we bring customers and help develop their business.

In Kyrgyzstan, we are faced with the fact that the banking sector is only developing there, and Kazakhstan is much ahead in this regard. We often had product integration difficulties, and there were not enough sales tools on the market, especially in Bishkek. But time is passing, the banking market is developing, and I think with a little patience, everything will get better," says 1Fit's Chief New Markets Officer, adding: 1Fit has overcome all difficulties, and financial indicators eloquently confirm that the launches in Central Asia were successful. 

Source: Forbes.kz

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