Author: Dani Horwitz, CEO, VMAX USA
So you’ve got a really successful micromobility brand, the local market loves your product and you’ve got manufacturing all figured out. You’re ready to expand into a new geographical market. You’ve got this…right?
Introducing a brand to a new market is always full of unexpected twists and turns (micromobility pun intended). In the past, I’ve been privileged to steer the marketing penetration strategies of leading Israeli, Chinese and European micromobility brands into the US. However, this past year, I led the operational expansion of the premier Swiss electric scooter brand, VMAX, into the US and Canada. As the year comes to a close, I’d like to share with you tried and tested insights from the launch of VMAX USA several months ago.
Here are five dos and don’ts for entrepreneurs, especially in the Personal Electric Vehicle (PEV) and e-scooter sector, looking to establish themselves in the U.S. I hope these lessons, learned from VMAX’s journey earlier this year, prove valuable to others on a similar path.
Lay a solid foundation
Do: Recognise that a solid foundation is crucial for smooth operations going forward. This means delving into and understanding various legal and strategic aspects specific to the U.S. market, including:
- Deciding in which US state to register your company.
- Navigating sales tax and tax nexus, which are distinct from the European VAT system.
- Registering a local mailing address (and finding the right warehouse space or office) and securing a U.S. phone number.
- Understanding the US importing process
- Obtaining necessary licensing and insurance coverage.
- Opening a U.S. bank account and obtaining credit cards.
It’s also essential to find professionals who can help with these tasks, including lawyers, accountants, real estate agents, and insurance brokers. They can provide invaluable assistance in navigating the complexities of setting up in a new market.
Don’t: Underestimate the time and costs involved in establishing your business foundation in the U.S. market. Particularly if you’re trying to open a business while overseas, setting up a company can be more time-consuming and more expensive than anticipated. Just one small example: registering a US phone number that can receive text message codes from banks sounds very simple but can take several tries to get right. Overlooking seemingly minor details of the initial setup structure, can lead to significant challenges and delays.
Adapt to the local market
Do: Highlight what makes your product unique but also ensure that it aligns with both local regulations and consumer preferences, which can differ greatly from those in foreign markets. For VMAX, capitalising on our Swiss heritage of quality and offering features like a 24-month warranty and UL certification on all VMAX electric scooters have been key selling points.
Tailoring your product to US market standards and regulatory requirements is equally important. This is particularly true if you’ve been selling overseas and now want to launch in the US. This might mean adjusting features like speed limits where there are generally stricter regulations abroad than there are in the US. When it comes to US regulations at times there are not only US federal laws, but also different laws in each US state and it’s important to be aware of these.
Don’t: Take for granted the importance of crafting a strong differentiation strategy in a crowded market. Simply duplicating what worked in Europe without tailoring to the U.S. landscape can significantly limit your product’s potential. It’s crucial to strike a balance between preserving your brand’s unique identity and adapting to the distinct tastes and needs of the U.S. consumer base. As a general rule, don’t be afraid to speak with people in the industry, from users of competing products to enthusiasts and experts. This will give keen insights into the local market.
Strategise your launch plan
Do: Have a well-thought out launch plan to introduce your brand in the US market. Whether you start with a soft launch or plan something extravagant, you need a solid go-to-market strategy. For VMAX, launching onstage at the Micromobility America convention in San Francisco provided us with the perfect platform to showcase our product line, offer test rides, and engage with both consumers and industry partners. Additionally, leveraging influencers and online platforms can offer wider exposure. At VMAX, we aligned with different electric scooter influencers and journalists for product testing, which helped to greatly amplify our reach and credibility early on.
Don’t: Underestimate the power of having both a physical and digital presence in your launch strategy. Skipping out on important industry events or neglecting online marketing channels can limit your brand’s initial impact and reach. Avoid a low-key launch that fails to capture the essence of your brand or fails to engage directly with your potential customer base.
Your launch is your first major opportunity to make an impression in the new market. Make it count by blending physical showcasing with digital outreach.
Understand the market’s geography
Do: Recognise the vastness of the U.S. and plan your logistics and marketing accordingly. Here are some examples we’ve learned along the way since launching VMAX USA:
- Prepare for varied shipping costs and times, especially when delivering from coast to coast. (Tip: shipping an electric scooter from Los Angeles to New York is really expensive. Also, when dealing with Lithium batteries you’ll most likely need to stick with ground shipping options which can take longer).
- Set up a network of local support across the country. At VMAX, we’ve partnered with repair shops in numerous large cities across the US to provide localised customer service. We also have a warehouse full of spare scooter replacement parts. This will help our customers get the service they need in a shorter time and limit long distance back-and-forth shipping of our scooters in case a repair is needed. We see this as a win-win-win for the consumer, climate and our business.
- Local marketing can lead to big wins. Just recently back in November, when California’s I-10 highway shut down in Los Angeles due to a fire, we launched a very aggressive targeted ad campaign around LA talking directly to drivers who were fed up with the sudden and sharp increase in city traffic.
Don’t: Diminish the logistical complexities and marketing challenges due to the country’s size. This is something that could be easily misjudged, especially when coming from overseas. Adopting a one-size-fits-all approach to the United States can result in many missed local opportunities. In just one very simple example, it could be freezing temperatures in New York and Chicago but warm and sunny in Miami and LA. Lack of attention to regional nuances – including climate, culture, and consumer behaviour – can very easily lead to ineffective marketing strategies.
Be flexible and responsive
Do: Be prepared to learn and adapt quickly. Once you begin selling and talking regularly to customers, you begin to learn very quickly what’s important and what isn’t. For example, we did not intend initially to offer test rides but once customers began requesting this option, we introduced the possibility to test ride a VMAX together with our partners in several leading markets.
Similarly, during the holiday shopping season we had a whole slew of customers asking for flexible payment options. We made a very big effort to set up Buy Now, Pay Later (BNPL) options as quickly as possible in response to customer demands. Today, we are proud to be offering ShopPay, PayPal Instalments and Klarna to meet our customers needs.
Don’t: Remain rigid in your initial business plan. The U.S. market can present unexpected challenges and opportunities, and being agile is key to capitalising on them. Just like a VMAX electric scooter, you need torque, speed and range to properly deal with all the ups, downs and opportunities thrown your way as a new brand.
Launching a European brand in the U.S. is a journey filled with learning and adaptation. By focusing on these dos and don’ts, businesses can navigate the complexities of a new market more effectively. For VMAX USA, embracing these principles has been instrumental in our successful expansion into the American e-scooter market. Wishing everyone a magical holiday season and a very successful New Year.