Emerging markets around the world are managing to hold their own against more developed countries, and are posting impressive growth rates. In fact, it is estimated that by 2050, two-thirds of global growth will come from emerging economies. By the same year, these countries are expected to have overtaken the developed world with 19 of the largest 30 economies globally being those currently described as ‘emerging’. This data proves that the future of business lies in emerging economies, and developed markets such as the UK should take note.
Emerging countries are attractive for a number of reasons. For starters, they have weathered the recent global financial crisis better than their developed counterparts. Additionally, large segments of their population are expected to reach middle-class levels of consumption, opening up vast consumer markets for businesses in the UK. Lastly, some of these markets have low-entry barriers and relatively inexpensive but highly qualified labour. This translates to low overhead expenses for companies that decide to establish outposts in these countries.
UK firms that are interested in increasing their trade and possibly realizing greater profits should look into opportunities presented in these developing countries. In order to take advantage of the available opportunities, it is advisable for firms in the UK to establish a foothold while these economies are still young. This way, the companies can gradually become part of the local economic landscape and build loyal consumer bases for their products. Furthermore, developing economies are more dynamic with consumers being more receptive to new brands, compared to those in mature markets. This is a blessing for companies seeking to establish themselves in emerging countries.
Thorough research is essential when looking to find a golden opportunity that other businesses are missing. For example, when people think ‘emerging economy’, Kuwait might not be the first name that springs to mind. The country, however, aside from being a major player in the oil market, also has a strong banking and finance sector, with financial professionals such as Fahad Alrajaan helping Kuwaiti banks to run at an operating profit even during the global downturn. Kuwait has also had a long history of using its own revenues to invest in other emerging economies through the Kuwait Fund for Arabic Economic Development.
Before seeking out opportunities in foreign developing markets, there are a few things that UK entrepreneurs need to do. These include:
- Conducting adequate market research. This will help firms know how to tailor their products to suit local consumers. Market research also reveals competitors and obstacles that need to be overcome in target countries.
- Tweaking their marketing strategies. Strategies that worked in developed markets might not be well received in emerging ones. It is important to adapt advertisements and other marketing channels to match the local culture and business environment.
- Establishing suitable communication channels. Entrepreneurs who choose to venture into emerging markets will have to overcome the language barrier. This can be done either by working with a translator or hiring multilingual staff in their outpost offices. Company websites and social media pages also need to be translated into the local languages for easier communication with local consumers.
The time is ripe for UK firms to begin establishing their brands in emerging markets. With the right research, communication and investment, these markets can prove to be quite profitable in the long run.
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