Finding Growth in Non-Traditional Markets
As “BRIC” Markets Become a Concept of the Past, What’s Next?
In the current global economic state, companies are increasingly looking to emerging international markets with the hope of finding a source of growth. Within the past few years, the “BRIC” countries, Brazil, Russia, India, and China, have been garnering much of the attention. However, there are still other emerging markets to discover.
Brazil, Russia, India and China are certainly strategic markets not to be ignored. These countries represent significant sources of growth and they are quickly becoming key players in the new global economy. It is important to look beyond these four BRIC markets and see the entire picture, which includes many other newly blossoming markets. A few worth highlighting are Egypt, Poland, South Korea, and Turkey. The following provides a glance into each market.
The Significantly Large Egyptian Market
With a population of 77.5 million people, Egypt’s market is by far the largest in the Middle East and North Africa. Egypt has pushed through customs reforms, proposed income and corporate tax reforms, reduced energy subsidies, and privatized enterprises. These measures have significantly lowered market entry barriers for new to market companies.
- The most promising investment sectors in Egypt are oil and gas, power generation and transmission, telecommunications and information technology, consumer goods, and non-food franchises.
- The tourism industry provides increasing opportunities for exporters, including hotel equipment, environmental management services, airport and related infrastructure, U.S. building systems and equipment, and U.S. project management.
- The downside is that a joint venture is needed due to the prohibition against foreign companies bidding directly on government tenders as they are required to act through local agents. Additionally, as the Egyptian market becomes more sophisticated, there is a growing demand for after-sales service, which is more easily provided by a local agent.
Poland’s Commitment to Free Market Principles
As a NATO and European Union member, Poland has a proven record of political stability and commitment to free market principles. In 2005, imports grew robustly from US $49 billion to US $101 billion. Among the ten new EU members, Poland is the largest market in terms of population and economic size.
- Household income and, in turn, purchasing power in Poland are rising steadily along with increases in business activities, together stimulating Polish demand for consumer goods.
- Leading sectors for U.S. exporters include: Automobile Parts and Components; Defense; Computer Services; Computer Software; Construction Materials and Equipment; Water and Wastewater Treatment Equipment; Plastic Processing; and Travel and Tourism Services.
The Advanced Infrastructure of South Korea
In 2005, South Korea was ranked the 3rd largest economy in East Asia and the 11th largest economy in the world. South Korea is a very modern country with an excellent transportation infrastructure, modern architecture, highly advanced telecommunications network and excellent hotels. Although the country may appear to be very westernized and modern, it remains very traditional in its business dealings.
- To ensure that foreign firms achieve success in the South Korean market, local representation is critical. This is especially true when taking into account that business relationships in Korea are built upon personal ties and social introductions.
- Three practices are essential for success in the Korean market:
- Adapting products and procedures to Korean tastes and conditions;
- Regular communication with Korean business partners and customers;
- Consistently exhibiting a strong commitment to the Korean market over the long run.
The Remarkable Geographic Position of Turkey
Geographically, Turkey is strategically positioned at the crossroads of Europe, Asia and the Middle East. This location, the gateway to historical trade routes stretching to the Far East known as the Silk Road, provides U.S. exporters with opportunities to develop trade and investment relationships not just within Turkey but also in surrounding markets.
- Some of the most lucrative sectors for U. S. export and investment include: Power Systems; Medical Devices; Automotive Aftermarket; Technologies - Hardware and Software; Safety and Security Equipment and Services; and Gas Transmission, Distribution, Exploration, Storage and Trading.
- To enter the Turkish market, most U.S. companies first opt to have a local representative or liaison office. As the business develops, companies tend to expand their opportunities by opening subsidiaries.
Developing markets have become an important launch pad for companies looking to enter foreign markets. Creating market entry strategies to reap the rewards of competitive advantage in these emerging markets is unquantifiable. When making the important decision to expand into a new market, be sure to consider all possibilities. Foreign Translations, Inc. can assist with your marketing strategy, including translating marketing brochures, your company’s website, international SEO optimization, and legal contacts with distributors and clients.
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