When Finance Minister Bill Morneau's council of economic advisers recently issued a fresh set of recommendations, they encouraged Canada to boost trade with Asia, notably China, Japan and India.
As founder and CEO of a Canadian fintech startup whose primary market is Asia, I applaud this advice. From my perspective, Asia represents by far the world's largest pool of untapped opportunity for Canadian firms, especially in the technology sector.
Due to proximity and a similar culture, the Canadian tech sector has always had strong commercial ties to the U.S., especially in key hubs like Silicon Valley and New York. My company was also in New York, until our exposure to Asia through a soft-landing program showed us that it represented a far bigger opportunity than the U.S.
While it might seem complicated to service clients in Asia from a base in Canada – and the time difference does add complexity – the benefits far outweigh the challenges. You might have to take calls late at night or early in the morning, but you also get to work at an unprecedented scale, with deals involving tens of millions, and sometimes hundreds of millions, of end users.
As Canadians, we tend to take cultural diversity for granted, and don't realize that this makes us far better suited to dealing with different cultures than most other Western markets. There's a reason Minister Morneau's economic council mentioned China and India as primary markets for increased trade: Both countries are very well represented in Canada, in the form of millions of immigrants, including many entrepreneurs.
Tech companies that build products for other businesses, rather than for consumers, face a particularly rich pool of opportunity, especially those with strong intellectual property and unique offerings. Canada's tech sector has an abundance of these business-to-business (B2B) companies.
Fintech (technologies related to financial services) is in particular demand in Asia right now. While Canadian banks are also opening themselves up to new technologies, their Asian counterparts have moved a lot faster, often leapfrogging technologies and going directly from nothing to best in class. For example, until recently, China had no credit rating system, loans were expensive and hard to obtain, and businesses were underserved by a technology market geared to consumer products. Fintech companies are now filling that gap, and the evolution has been so rapid that a recent Ernst & Young report named China as the most innovative fintech market globally, ahead of Silicon Valley and London.
This represents massive opportunities for Canadian companies to leverage "Made in Canada" products and services to meet these needs, where local expertise often does not yet exist. Canada's image can also help in this regard. Prime Minister Trudeau enjoys near-celebrity status, and Canada's strong brand is an advantage at a time of uncertain relations between China and the new U.S. administration.
Even compared to 18 months ago, it is far easier for a Canadian company to succeed in Asia. Here are a few tips for companies looking to make the move:
– To conduct business in Asia, you need to meet face to face, probably more than once to get your first deal. A good initial strategy is to attend one of the many high profile fintech or financial services events and book meetings around them. Taking advantage of the Canadian Digital Media Network's Soft Landing program, or the government's recently launched CanExport program, can help offset these early costs.
– Getting meetings with senior decision makers in Asia is actually much easier than in North America. Don't be afraid to request them, because if you have a value proposition that resonates, C-suite executives will meet with you.
– Focus on execution to prove value, offering "proof of concept" that helps potential clients understand the value of your product and build internal support.
– Leverage the Canadian network. A recent fintech mission to Hong Kong organized by the Consulate brought six Canadian companies, including mine, to attend the prestigious Asia Financial Forum and meet with key stakeholders. The results were unanimously positive with follow-up meetings as soon as a few days later. Take advantage of the market intelligence and relationships that the Trade Commissioner Service can provide, as well as the introductions that innovation hubs like Communitech can make to counterparts like Cyberport in Hong Kong.
For entrepreneurs who are willing to expand their horizons beyond the 49th parallel and look east, they'll find plenty of opportunities in the Asian market to grow the billion-dollar companies that Canada needs.
Dr. Cédric Jeannot is the founder and CEO of APrivacy, a fintech company based in Waterloo, Ont., and Hong Kong. Its technology enables the financial services industry to communicate securely.
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