The global economy is becoming more and more interconnected. This means that emerging markets can be an excellent place to find new customers for your business. These countries are experiencing rapid industrialization and demographic shifts, which leads to considerable business opportunities as well as challenges.
However, before diving into these challenges, you must first understand what the term “emerging markets” means and which metrics to monitor while assessing market conditions for your business.
History of the term
In the early 1980s, the International Finance Corporation (IFC) began tracking the performance of several local stock markets in countries including Argentina, Brazil, Chile, Greece, India, Jordan, Korea, Mexico, Thailand, and Zimbabwe. As a result of their analyses, they proposed the creation of a ‘Third World Equity Fund’ which was designed to attract foreign investors. Then the name has been changed for a more positive perception, and thus more successful in attracting investors.
IFC executive Antoine Van Agtmael suggested the new name “emerging markets”. Since then, the concept has evolved and we now use the term widely. So, what exactly do we mean when we say “Emerging Markets”?
What is the term emerging markets?
“Emerging market” is a term used primarily for countries where there is widespread development and industrialization which comes with economic growth, new jobs, and significant investments. Generally, the term “emerging market” defines a country that has some characteristics of an industrialized nation, but does not have the same production capacity or standards of living yet. All countries experience economic growth and development, but this term is typically used by experts for those that have a high growth rate in GDP (gross domestic product), thus carrying a potential for business.
These markets are full of opportunities for investors and businesses alike. Are you prepared for emerging markets?
List of emerging markets
There have been changes among the members of emerging markets since the term was introduced. Now, a significant number of countries around the world are considered among them. These markets present the greatest opportunities for value creation if you can identify which ones are right for your business. Here is a list of 24 emerging markets We’ve compiled that you might want to consider going into:
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Brazil
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Chile
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China
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Colombia
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Czech Republic
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Egypt
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Greece
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Hungary
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India
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Indonesia
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Kuwait
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Malaysia
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Mexico
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Peru
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Philippines
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Poland
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Qatar
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Russia
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Saudi Arabia
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South Africa
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Taiwan
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Thailand
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Turkey
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United Arab Emirates
Macroeconomic metrics to consider
Market expansion to emerging markets is a logical choice for companies to provide growth to their product portfolios and provide a greater client base. Investors are reminded that macroeconomic metrics such as GDP, labor statistics, employment data, interest rates, and many more, should be reviewed carefully. To conduct this review, we can list the prominent resources as follows:
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Worldbank provides a variety of statistical data, including world development indicators and data on external debt, financial flows, health statistics, social and economic indicators worldwide. They offer reliable data and advanced comparison capacity with a global perspective.
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IMF (The International Monetary Fund) provides statistical data on countries, including IMF funds, exchange rates, and other economic statistics. In addition, they publish reports, guides, and manuals on statistical practices.
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Our world in data The online, scientific publication Our World in Data is dedicated to large problems affecting the world, such as poverty, disease, hunger, climate change, and war. It is led by economist Max Roser and other team members at Oxford University. They are often cited in academic scientific journals.
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Statista is a market research database that contains current figures and forecasts for the most important consumer goods within more than 200 markets. Through more than 1,000,000 statistics on more than 80,000 topics, they provide a wide range of information especially on the market and consumer data.
Micro metrics to consider
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Market size and growth for your industry: Market size and growth are aspects of your current industry that you should always want to be aware of. They help you figure out how much opportunity is actually available for your business and how much space you have in the market for growth.
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Competition in the market: Market competition is always one of the key metrics to follow in any business. Detecting market competition allows you to identify areas of opportunity, better understand the playground. Further, knowing who to target can generate a higher conversion rate throughout your funnel and increase your ROI.
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Innovation readiness for the industry: Innovation readiness is an important variable in the strategic management process. It considers the market’s preparedness to adopt new innovations and their willingness to improve and grow.
How to move forward
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Finding the right partner: Finding the right partner for expansion in emerging markets is the key to the success. A comprehensive, analytical approach to your business goals and implementation process should be the foundation while giving you trust through expertise along the way.
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Completing the business plan: Preparing a comprehensive business plan for expansion into an emerging market is one of the most important steps. By evaluating all relevant market dynamics, considering micro & macro metrics, turning all analysis and observations into actionable agenda items is a challenging part of the process. Therefore, choosing the right partner gives you a significant advantage.
With thousands of metrics and variables available to track, it’s difficult to know which metrics actually matter for your business. Especially the micro metrics that you will consider should be customized for your brand and industry, answer more detailed questions and pave the way for drawing a clear path for the strategy.
It can be challenging to complete this complex task, Metheus will handle all these processes for you, letting you focus your energy and attention on growing your company. Let us help you, get in touch with us now.
