My recent webinar “First Steps to Success in Emerging Markets” explored the vital factors for consideration when selecting new country markets. These are framed by our four pillar model: Market, Population, Access and Business Environment; which brings methodological clarity to the market selection process. Attracting more than 300 attendees, the webinar ended with a thought-provoking Q&A session. Highlights of which are below.
How do you rate Cuba as a prospective market?
Cuba has been identified by Euromonitor as a “Consumer Market of the Future”, even before the thaw with the US. It has some demographic challenges – a relatively old population in slow decline, low average incomes and weak infrastructure – but it also has growth potential for fast-moving-consumer goods – tailored to suit local tastes. Yet competition already exists from Chinese companies and Spanish, as well as home-grown. Also tackling issues like a lack of brand awareness and a culture unused, or unaccepting of commercialism, means it’s not without its challenges. Although the US embargo has not yet been lifted, the time might be right to re-evaluate Cuba’s potential as a consumer market.
If looking at Eastern Europe, which countries would you choose?
To begin with I need to reiterate the point that much depends on your business – the appetite for risk, specific product details etc. Eastern Europe has some challenges: particularly demographic. So one point is not to take the figures at face value – go beneath the top-line. If you do that, you see some countries, regions or cities experiencing strong growth even if the population as a whole is in decline.
Eastern European EU member states have an advantage with easy access to western European markets. But some of the fastest-growing EU economies are very small – the Baltics for example. Poland is a large, stable market. Romania is also large and presents some interesting opportunities, although not without challenges of course.
Which are your top 5 emerging markets outside of BRIC?
Again, it very much depends on the nature of your business. In economic terms I think Philippines in Asia, and Indonesia – although with some caveats, Peru and Colombia in Latin America present many opportunities. Malaysia is also interesting, as is Mexico – its current growth is sluggish but the reform programme it is implementing should lay the foundations for future growth.
Are you an advocate of the “Africa Rising” narrative?
Yes I am. Sub-Saharan Africa has fast-growing economies with young populations. As ever the devil is in the detail and the region should not be treated as one country. It is home to a diverse range of people with different income levels, tastes, motivations and aspirations. Ethiopia, Angola, Ghana, Senegal and Tanzania are all amongst our African “Markets of the Future”. Ethiopia has a strong growth outlook and a large population. This is driven by increases in consumer spending – in turn supported by remittances. Ghana has plentiful natural resources and a sizeable middle class. Angola is driven by oil and reconstruction.
What are your thoughts on development in Africa? Could growing infrastructure mean future outsourcing?
In some cases perhaps, aided by increase internet access and fibre-optic undersea cabling. The Ethiopian government is one which is striving towards this. This is good as it shows the continent is about more than just natural resources, but the real attraction in Africa is as a consumer market in its own right – not just a base for low-cost manufacturing. There are greater opportunities than in outsourcing alone for home-grown business and multinationals alike.
Some say that Myanmar is a ‘silent dragon’…what’s your thoughts?
Myanmar has been identified as one of Euromonitor’s “Markets of the Future” and is certainly an interesting economy. It is seeing strong growth in many areas – including GDP and internet use but from a very low base. With a population over 50 million, its size makes it an attention-grabbing option. In recent years, consumer expenditure has shown only slow growth in real terms, but with the opening up of the market that should change in the medium term. Challenges remain immense however – Myanmar is one of the most difficult countries in which to do business in the world. In 2014 the World Bank placed it at 182nd position out of 189 economies.