Over the past few years, emerging and frontier markets have been considered synonymous with (untapped) opportunities and (long term) prosperity, rightly so, as these markets have experienced more rapid economic growth in comparison to developed countries, and are foreseen to continue with this positive trend in the years to come, (even if there are certain exceptions). These markets are spread all over the world- right from South America to Africa, Eastern Europe to Asia and they provide a plethora of possibilities due a wide variety of reasons, making them attractive targets to ambitious businesses. Emerging markets have a history of being more resilient to global crises and to continue to progressing, documenting 70% of global growth, thanks to the booming population of middle class and their adaption of the new technological age.
There have been ever-increasing cross border interactions between the “developed” world and the Emerging Markets over the years. However, penetrating these markets is easier said than done, as each of these markets have their unique characteristics and challenges which need to be taken into consideration, before diving headfirst into them. Entering an emerging market is not a simple task because you have no clear picture of the market situation and other barriers present in that country. Some of the characteristics to consider are business cultures, local languages, market potential, regulatory landscape, competitive environment, political situation to name a few. A holistic and careful evaluation of such factors is what makes narrowing down on one or more emerging markets as a business’s corporate strategy a tricky one. A business’s entry and growth in new markets depends on their ambitions, commitment to grow, risk appetite and investment budgets etc.
At a broad level, every ambitious business which is considering to venture into these markets has five options to explore the market potential to decide whether it will be worthwhile to take a plunge or not. The choice within these five depends on several aspects (but not limited to) such as the commitment and determination to grow, one’s appetite for risk, the corporate vision, and financial strength and security.
- Do in-house research & analysis | Secondary research + Flying down executives
Many businesses use this as a first step when they are contemplating any market prioritization. The seeds of their strategy and initial baby steps are found in some in-house secondary research. The ones which are more enthusiastic or curious even end up flying down their executives to the target market(s) for some initial scouting and meetings. But if not carefully and objectively planned, these trips can prove to be unproductive. For e.g., there is not much a foreigner can do alone when visiting Bhasa-speaking Indonesia. To make things easier, there are a number of translators as well as “meeting-schedulers” present in emerging markets who can make you have a more useful trip. However, such an exercise is more useful if one is looking at a market from an export or tie-up perspective. Any larger ambitions might not be fully satisfied through this approach.
- Carry out low-cost surveys | Hire freelancers from online marketplaces
Sometimes businesses (especially B2C ones) who need a closer understanding of the new markets across areas such as consumer behavior and buying patterns, and are on a shoe string budget, prefer contracting market research freelancers. With the evolving world, there are several marketplaces and other avenues which can help businesses find “cheap resources” who can stand nearby point of sales and push for consumer observations or feedbacks or even indulge in mystery shopping. But then, sitting hundreds of miles away, how are you sure that the information recorded is accurate? And who will sort out that information? Do you have people in-house with the competency and bandwidth to analyse the data? What does the data point out- softer points of the blind curves? Will you be able to define focal points of that market, without having done your own homework and research on it? But still if you prefer this low cost option, there are several freelancing marketplaces present online.
- Hire a local independent consultant | Post requirements on expert networks
There are cost-conscious businesses who look out for local “one-man shows” who can guide and do some initial hand holding for companies aspiring to enter new countries. But this could work both ways. Chances are high that the experienced individual knows it all and can guide but will they be willing to get their hands dirty to answer all your queries or will they only use pre-conceived notions and biases of the market, which may or may not be close to reality. Can there be a selfish-interest in his opinions of glorifying the market potential for a better professional opportunity with the client? Furthermore, independent consultants normally charge by the hour, so the incentive to deliver is misaligned. Therefore, one needs to be very careful while bringing an independent consultant on board. But the good news is that the internet has several expert networks where one can post their requirements in pursuit to find the most relevant person available.
- Quick Macro & Market Info | Market Research Report re-sellers
Another option for businesses contemplating entering newer markets is purchasing a market research report relevant to their offerings or industry. Before buying a market report, you should make sure that you have absorbed all the fact-finding you have done in-house, and only then move to look for reports that will cover up what you are missing out on – typically these reports share the detailed index of the reports for your perusal, to help you decide the relevance of the report. However, buying a report may not be very productive because every business is different and there is no customized go-to market plan – they can’t be looked upon as “know-it-all”. Another thing to keep in mind is that all your potential competitors will most likely access the same report so what edge can this give you? This is a concern with syndicated reports too. But having said that, research reports are a popular option for those who don’t have time for any customized research for starters. There are a number of report re-sellers present online.
- In-depth, unbiased Go-to-market planning | Hire a local MR or Boutique consulting firm
Last but not the least, businesses that are seriously considering newer markets can hire a local market research or a strategy consulting firm. These are your perfect options for customized research where you are given latest and relevant market data and recommendations suiting your business goals and competencies. You have greater control on the scope and the choice of how in-depth you want it to be. If you have super deep pockets, then there are usual suspects i.e. the top 10 global firms which you can engage for your business. But the challenge lies if you are aiming to find local, niche firms as emerging markets are flooded with them. How do you find and choose these firms? You can use Conquerem – it’s the world’s first marketplace for market research and boutique consulting firms of emerging markets. Emerging markets play a different ball game and information about these markets and a go/no-go can only be best relayed by local firms who have feet on the ground.
By 2050, today’s emerging markets shall account for more than half of the world’s 30 largest economies. Do these markets feature in your business’s growth plan?
About the Author
Rachit Khosla, a strategy consultant at heart, founded Conquerem in mid-2015. Conquerem has built access to 1000s of such service providers across Latam, Europe, Africa & Asia. Rachit, an alumnus of Manchester Business School, UK, is the former Country Manager and Director of Solidiance and has rich experience of advising Fortune 500s and large conglomerates on Asia Market entry and growth strategies.