Many companies look to emerging international markets for corporate growth initiatives. Entering a growing market on the upswing provides a number of advantages. Costs for expansion are usually lower in emerging international markets, as the local economy has not reached its full potential. Companies gain significant advantages through:
- Lower costs for land, buildings, rent, and equipment
- Exposure to foreign investment with high potential
- Market diversification enabling growth in new markets to balance stagnation in other markets
- Enhancement of the company’s global reputation
- Learning new cultural perspectives that may enhance growth initiatives
What are the Top Emerging International Markets?
The four largest emerging international markets are Brazil, Russia, India, and China. These four countries are known by the acronym BRIC. The BRIC nations have several features in common, including a government focus on economic growth, well developed financial markets, and strong interest in international trade initiatives. However, they share some challenging issues, such as currency issues and fluctuations.
Addition of South Africa to BRIC
South Africa joined the BRIC nations and represents the “S” in BRICS. The addition of South Africa is due in part to the other nations’ desire to forge closer ties with Africa’s leading economy. The first five-member BRICS summit was held in 2011. By 2020, BRICS countries expect to contribute nearly half of all global Gross Domestic Product (GDP) growth.
New Development Bank for Emerging International Markets
The New Development Bank (NBD) for BRICS is seen as a success story for this group of large economies. NBD’s general strategy document for the period 2017-2021 calls for the bank to place two-thirds of its loans into sustainable, “green” infrastructure and renewables over the next five years.
- 2nd largest producer of iron ore in the world
- Large producer of ethanol (more than Europe and Asia combined)
- Rich natural resources
- Leading exporter of oil and natural gas
- Strong growth in commodities
- Significant free market reforms driving economic growth
- Leading producer of food and farm goods
- Known for information technology and business process outsourcing
- Growing demographic and workforce trends
- Leading exporter of consumer goods
- Mid-range producer of value-added manufacturing products and assembled goods
- Government plans to achieve dominance of high-tech sectors to lead emerging international markets
- Diverse economy driven by domestic consumption
- Abundant natural resources
- Largest economy in Africa with world-class and progressive legal framework
What are Success Strategies for Emerging International Markets?
In order to achieve success, companies should define a plan for how they will approach entering new markets. Proven success strategies include:
- Leveraging trade associations, events, and government agencies that can support the endeavor
- Conducting market research on all aspects of the local culture, businesses, and strategic fit
- Building a network of strong relationships to help open doors in the new markets
- Identifying strategic partners that can work with you in the local markets
- Planning for contingencies and flexibility to respond to local market nuances
- Commit for the long term so the emerging international markets become integral to your business
What Does This Mean?
Companies looking to enter emerging international markets should follow proven success strategies. As a result, they will gain valuable market information, develop strong relationships, and define a robust and executable market-entry plan. Companies should determine whether one or more of the BRICS nations should be on their target list for market entry.
What Should Employers do About Emerging International Markets?
Companies looking to enter emerging international markets should review their relocation programs. A qualified Relocation Management Company (RMC) with knowledge and experience can provide a number of helpful resources. As a result, companies will maintain a strong competitive advantage in relocation for new hires and transferees. A global relocation program that provides the highest level of relocation benefits and services for employees will help companies attract highly skilled and talented candidates.
GMS’ team of global relocation experts has helped thousands of our clients understand how they can use global relocation to enter emerging international markets. Our team can help your company understand how to leverage global relocation to any of the BRICS nations and gain all the advantages these markets offer your company as well as your new hires and transferees.
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Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to discuss your company’s interest in global relocation to emerging international markets, or give us a call at 800.617.1904 or 480.922.0700 today.