Unlocking Global Opportunities: Your Essential Guide to Leveraging VR and AR Technology in International Markets

Companies worldwide are leveraging augmented reality (AR) and virtual reality (VR) to engage with customers in innovative ways. These technologies allow consumers to try products virtually—like testing lipstick shades or visualizing a new sofa in their living rooms. However, what works in one country may not work in another, as highlighted by marketing expert P.K. Kannan from the University of Maryland.

Culture shapes how people interact with these technologies. This variation poses challenges for global brands trying to create a universal XR strategy, according to Kannan.

In their research published in the Journal of International Business Studies, Kannan and his colleagues examined XR marketing strategies in tech-savvy South Korea, a country known for embracing these retail innovations. “Korea is at the forefront of XR applications in retail,” Kannan states, noting the influx of both local and foreign brands.

Foreign companies entering a new market face what’s called a liability of foreignness (LOF). This means they may struggle to connect with locals due to cultural differences, making their message less clear and relatable.

The researchers analyzed 257 beauty brands in South Korea over three years (2019-2022) to see how XR influences brand engagement, particularly comparing foreign and local brands.

They found that “brand buzz”—how often a brand appears on social media—plays a key role in brand engagement. If a brand’s XR features don’t resonate, engagement will drop. The study revealed that LOF does indeed exist in the virtual space for foreign brands.

Why? “It all comes down to cultural mismatches in how people process information,” Kannan explains. Issues arise especially with highly interactive and imaginative XR experiences, where cultural interpretation may differ widely.

Interestingly, when a brand is new or launching a new product, LOF can be less of a concern. “People are more focused on the novelty rather than cultural mismatches,” Kannan points out.

Brands can also lessen LOF by investing in local marketing. Companies with their own platforms, which facilitate direct connections with local consumers, often fare better. Community-focused platforms that share brand stories and tips are particularly effective in bridging cultural gaps.

Kannan offers some advice for brands looking to harness XR in new markets:

1. Understand the culture. Learn the local norms and tailor your XR strategy to be relevant to local consumers.

2. Choose XR technology carefully: Some XR tools can be tricky for foreign businesses. Start with simpler features and gradually integrate more complex ones.

3. Use the power of newness: New brands or products can attract attention, allowing for more flexibility in using advanced XR features.

4. Build a community: Develop a dedicated platform to create a loyal customer base, which can help navigate cultural differences.

Overall, while having XR is beneficial, using it correctly is crucial. Poorly executed XR strategies can damage a brand, sometimes more than not using XR at all. “Companies that embrace XR typically perform better, but missteps can be harmful,” Kannan warns.

For more details, check the research titled “Liability of Foreignness in Immersive Technologies: Evidence from Extended Reality Innovations,” published in the Journal of International Business Studies.