Testing the Waters: How Global Brands Use Proxy Markets to De-Risk Innovation

Before launching new products, features, or pricing models globally, leading brands test in smaller, lower-risk markets to refine their strategies. In this article, intO’s Commercial Director, Chloe Amos-Edkins, explores how proxy markets help businesses avoid cultural misalignment, usability gaps, and regulatory pitfalls, highlighting how businesses can choose the right proxy markets, run effective research, and avoid common pitfalls to ensure successful global rollouts.

Launching new features, products, or pricing strategies on a global scale is risky. Even the most well-researched innovations can stumble due to cultural nuances, regulatory hurdles, or unexpected shifts in consumer behaviour.

That’s why leading digital brands test in smaller, lower-risk proxy markets first—a strategy that helps them fine-tune offerings, validate assumptions, and avoid costly mistakes before full-scale launches.

At intO, we’ve seen first-hand how strategic proxy market research can transform a launch from uncertainty to high-impact and success. This article explores how brands can choose the right proxy markets, structure their research effectively, and avoid common pitfalls—with insights from intO’s WhatsApp Communities study in Ghana and Peru.

What Are Proxy Markets, and Why Do They Matter?

Proxy markets are strategically chosen locations where companies trial new products, features, pricing models, or marketing campaigns before rolling them out globally.

A well-selected proxy market provides cultural and behavioural parallels to the target region while offering a lower-risk environment for experimentation. When used effectively, proxy markets help brands:

• Understand market readiness – Are users ready for the innovation? Do they need education first?
• Fine-tune usability and UX – Does the feature work as intended? Are there friction points?
• Validate pricing models – What price points drive adoption without impacting revenue?
• Test marketing messaging – Does the branding resonate with local audiences?
• Identify potential regulatory roadblocks – Are there compliance issues that need adjustment?

However, picking the wrong proxy market can be just as risky as launching globally without testing. So, how do brands choose wisely?

Challenges and Risks That Proxy Markets Help Overcome

Without proxy market research, brands risk:

• Cultural misalignment – Features that work well in one region might fail elsewhere due to different social norms, digital trust levels, or privacy concerns.
• Regulatory pitfalls – Banking, AI, and data laws differ dramatically worldwide—testing helps identify compliance challenges early.
• Usability gaps – UI/UX that feels intuitive in one country might not translate well across languages, accessibility expectations, or device penetration rates.
• Market readiness misjudgment – Testing helps brands gauge whether consumers are actually ready for a new product or if more education is needed.
• Wasted marketing spend – A misstep in messaging, tone, or positioning can result in low adoption despite high investment.

Example: How WhatsApp Used Proxy Markets to Minimise Risk

WhatsApp worked with intO to test its Communities feature in Ghana and Peru before launching in key markets like Nigeria and Brazil.

Why Ghana and Peru? These proxy markets shared crucial similarities with WhatsApp’s key target regions but provided a controlled environment to fine-tune features:

• Community engagement similarities – Like Brazil and Nigeria, Ghana and Peru have strong group-based digital interactions and rely on peer-led networks for both social and business communication.
• Mobile-first economies – Both proxy markets have high smartphone penetration and share messaging app usage patterns with Brazil and Nigeria.
• Regulatory differences – Testing in Ghana and Peru allowed WhatsApp to refine content moderation policies before introducing them in high-scrutiny markets like Brazil.

What WhatsApp Learned from Testing in These Markets:

• Uncovered onboarding challenges – Users in these regions flagged friction points in the user journey, leading to refinements before launch.
• Refined group management features – Real-world usage highlighted necessary improvements in group admin settings and privacy controls.
• Validated engagement patterns – Testing confirmed that the Communities feature aligned with social communication trends in target markets.

By de-risking the launch through proxy market research, WhatsApp ensured a smoother and more impactful global rollout. Read more about the case study here.

Choosing the Right Proxy Market – Cultural Considerations Matter

Many brands focus on market size and digital penetration, but cultural fit is just as important. When selecting a proxy market, brands should evaluate:

• Shared digital behaviours – Does the proxy market mirror how users in the target region engage with technology? (e.g., social commerce adoption in Southeast Asia vs. Latin America).
• Attitudes toward innovation – Are users early adopters, or do they require longer trust-building cycles? (e.g., Japan prefers established brands, while Africa embraces fintech disruption).
• Community and social structures – Do users engage in peer-driven adoption, or is brand influence more top-down? (e.g., Latin America’s strong group buying culture vs. the US’s individual decision-making).
• Economic and social parallels – Does the proxy market share economic mobility trends with the primary target market?
• Regulatory flexibility – Is the proxy market more lenient for early experimentation? (e.g., UAE’s progressive AI regulations vs. EU’s stringent GDPR compliance).

Activating Research in Proxy Markets – Best Practices for Success

At intO, we’ve developed a 10-point checklist for running effective proxy market research. Here are some key takeaways:

• Understand local nuances first – Superficial similarities don’t mean identical user behaviour. Conduct pre-research to map out local mindsets.
• Mix qualitative and quantitative methods – Ethnographic studies, usability testing, and behavioural analytics together give a full picture of user responses.
• Engage local researchers – On-the-ground researchers provide deeper cultural understanding and participant trust.
• Account for trust and privacy concerns – Data sensitivities vary widely (e.g., Europe’s GDPR vs. China’s surveillance-heavy model).
• Align internal teams from the start – Make sure UX, marketing, compliance, and leadership all understand the proxy market goals.

Common Pitfalls to Avoid in Proxy Markets

• Using one proxy market for all learnings – No single country can perfectly reflect all cultural and economic factors.
• Skipping contextual research – If you don’t fully understand the proxy market’s local realities, your results will be skewed.
• Assuming local success means global success – Just because something works in Singapore doesn’t mean it will work in Tokyo.
• Focusing only on short-term metrics – Adoption data is useful, but long-term retention and cultural resonance matter too.
• Neglecting ethical considerations – Data privacy, consent, and research transparency must be respected across regions.

Final Thoughts: Why Global Brands Need Proxy Markets—And the Right Research Partner

A well-chosen proxy market is a powerful strategic tool—it reduces risk, fine-tunes strategy, and ensures that new launches truly resonate in key regions. But success isn’t just about launching a product—it’s about making sure it gains traction, delivers value, and meets real user needs worldwide.

intO brings deep cultural intelligence, global research expertise, and a real-world approach to proxy market strategy.

Ready to optimise your proxy market research? Get in touch with Chloe Amos-Edkins, our Commercial Director, for an exploratory conversation.

Connect with Chloe on LinkedIn
Email: [email protected]

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