The challenge of expansion

“I believe careful planning and due consideration are the cornerstones to setting up a successful, thriving business in another country,” writes Khangal Nergui founder and CEO of Storepay


The Oxford English Dictionary defines an entrepreneur as “a person who makes money by starting or running businesses, especially when this involves taking financial risks”.  I can therefore state with certainty that my life so far has been an extraordinary entrepreneurial journey.

In 2009, when I was 18, I launched Mongolia’s first-ever sports magazine, Sole, along with my cousin. For our first issue, we spent every waking hour producing 180 pages of content. Five thousand copies were sold over the course of six months, igniting my passion for business. A few years later I founded Mobile Advertising LLC, a business where companies in Mongolia ran their ads on the headrest displays of taxis. This was a first for the country, so the business was considered a pioneer at the time. However, I decided to close this company after a year due to external circumstances and rapid changes in consumer behaviour, and, in doing so, I learned a very valuable lesson: people will only fully embrace new technology when they are ready for it.

I attended the National University of Mongolia, achieving two Bachelors degrees in both business and law. After this, I completed a Master’s degree in International Business at Queensland University of Technology in Australia. It was during my time there that I learned a lot about what it takes to be successful. I drove a delivery truck as a part-time job, starting at five in the morning. This involved manually loading and unloading 10 tons of deliveries each day. I would then attend my classes and finish the day with a session in the gym. I realised success will always follow hard work and dedication, and that nothing is impossible. These are my core values as an entrepreneur.

Khangal Nergui

I returned to my native Mongolia where I worked for a political institution. But I couldn’t shake the feeling that this was not the correct fit for me. I also felt that Mongolians could benefit from purchasing goods and services in instalments with no fees through a Buy Now Pay Later (BNPL) solution. Many Australians successfully embraced this option while I lived and studied in the country and I thought it would be a great service in Mongolia.

Noticing this market gap led me to start another company. The global BNPL market increased by almost four hundred per cent between 2019 and 2021. Further growth means BNPL transactions are predicted to increase by more than US$450 billion between 2021 and 2026. My vision was to offer Mongolians BNPL solutions to boost financial equality in the country and boost people’s purchasing power. I initially found it difficult to know where to start with yet another new business but eventually embarked on the process in distinct stages. This involved looking for investors, sourcing IT professionals to build the system, and merchants to partner with. Another lesson was learned: careful stage planning will lead you to your ultimate goal. I was lucky enough to find my first investor after three months and with his US$150,000, I was able to fund the start of a fintech company, Storepay. The BNPL provider was officially launched in November 2019 with just myself and two employees. It enjoyed rapid growth within the Mongolian market since, and my ambition is to expand to several other countries, starting with Southeast Asia. However, before expanding into a new market, it’s crucial for a business to weigh the costs and benefits of doing so. I would certainly recommend a detailed analysis of the taxes, fees, and tariffs involved. Such is the value of international trade, the WTO (World Trade Organisation) estimates that world trade values increased by four hundred times between 1950 and 1922.

If the market isn’t right for the product offering, the company risks wasting valuable time and resources. Expanding any sort of business overseas is never a decision that should be taken lightly. The pitfalls, particularly those of an unforeseen nature, can be immense. The COVID-19 pandemic is a perfect example. Between 2019 and 2020 the number of individuals in employment globally fell from 3.3 billion to 3.19 billion, likely caused by the effect of the virus on the global economy. I feel businesses with the most efficient contingency plans in place were those who weathered the COVID-19 storm most successfully.

I believe careful planning and due consideration are the cornerstones to setting up a successful, thriving business in another country. Networking is something I take particularly seriously. How to network successfully is another of the key lessons I have learned in my professional life. Every business requires partners and the best local ones can be sourced through both networking and rigorous market research. This will result in a local network of contacts all of whom will understand local market conditions in their particular territory. These will almost certainly include consumer preferences, behaviours, and trends. Hiring and retaining the right talent can be a challenge, including finding employees with the appropriate skills and cultural fit.

Every country has varying privacy and financial regulations. Therefore, it’s so important for a business to adhere to local laws and regulations. These may include meeting data privacy requirements, complying with anti-money laundering regulations, and obtaining necessary licences. The business must ensure it has the right technology and infrastructure to support its new market operations. Adapting existing technology solutions to meet local needs while ensuring scalability can pose unique difficulties.

Competing with established businesses and local startups can be particularly challenging, so I would recommend learning as much as possible about the competitive landscape. This will help in developing a strategy to differentiate your business from its competitors. Any new business needs to provide consumers with a convincing argument as to why they should choose them. You’ll need to be prepared to do a lot of convincing, particularly with technology vendors, merchant partners, and users. There will be tough days and unexpected events. By normalising and accepting them as part of the process you’ll keep both a cool head and an open mind to successfully deal with whatever comes your way.


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