Emerging markets: Three things eCommerce trailblazers should remember
When Goldman Sachs first coined the BRIC acronym to group together the world’s biggest emerging economies, Brazil, Russia, India and China were the only countries to make the cut. It wasn’t until 2011 that South Africa was added to the list, seemingly pluralizing the acronym. Since that time, Mexico, Indonesia, South Korea and Turkey have been lumped together under the acronym MIST as have countries in the Middle East and North Africa under the term MENA.
But because of a quickly growing international middle class, economists barely have time to create new acronyms for the many emerging regions of opportunity. In fact, emerging countries are making such major contributions to this year’s eCommerce sales, which are forecasted to hit $1.5 trillion, that it would be foolish not to consider the possibilities of selling overseas.
The first-mover advantage
Selling into an established country like the U.K. means you’ll be competing with a slew of established brands. But being one of the first into an emerging market offers competitive advantages not granted to those who arrive late to the party. Those with a first-in mentality are afforded a greater chance for building brand recognition with residents, and they’re also granted the first opportunities for developing relationships with local businesses.
This first-mover advantage, therefore, is the competitive leg-up only given to those companies or organizations that are first to enter a specific market or industry. According to Investopedia.com, “First movers are often followed by competitors that try to capitalize on the original company’s success. By this time, however, the first mover has usually accumulated enough market share, expertise and customer loyalty to remain on top.”
So for those eCommerce firms that were willing to make the first path through uncharted territory, the badge of trailblazer can be proudly worn. However, those who come through in the second and third waves will also reap the early-in benefits, especially if their specific product segment has yet to be fully established. But they, too, should expect to encounter a few bumps in the road – literally.
They’re called emerging markets for a reason
Patience is a virtue, and with those words of wisdom on the table, it’s important to remember that emerging markets are well, still emerging. After all, they were flagged for their potential and not necessarily for their current marketability. Investopedia.com says that “although the term ‘emerging market’ is loosely defined, countries that fall into this category, varying from very big to very small, are usually considered emerging because of their developments and reforms.”
These countries see a potential in themselves, but they realize that they must focus on internal improvements. Fortunate for eCommerce firms needing to ship their goods from point A to point B, many of those improvements are taking shape in the form of infrastructure projects.
Take India, for example. Its rural roads program is responsible for building nearly 200,000 miles of new roads with many more improvements to come. In Brazil, the World Cup and the 2016 Olympics are spurring all sorts of infrastructure improvements. And in South Africa, where investments in its infrastructure have been a priority for some time, its transportation system is now being described by some as world-class.
Overcoming the challenges of logistics is possible
Not all emerging markets are as well off as South Africa, however. Being the largest country in the world according to land mass, Russia’s road to road recovery will be a long haul. Currently, the M10 highway, one of Russia’s biggest, is in such bad repair that it takes truck drivers 24 hours instead of 10 to make the trek from Moscow to St. Petersburg.
But as with other emerging markets, Russia is investing in its infrastructure. By 2018, the government expects its new M11 highway to be a welcomed alternative to the slow-moving M10. In the meantime, however, eCommerce companies can work with established shipping companies in Russia, who have long since learned how to effectively navigate the country.
And just as stateside retailers take advantage of shipping plug-ins to quickly connect their stores with popular carriers, the same technology can be employed by companies whose packages are headed overseas. Fortunately, most of the bigger carriers, like DHL and FedEx, have been in business in emerging nations for some time. Connecting with smaller, local carriers, however, is possible by custom-developing shipping plug-ins for their systems.
For U.S. retailers looking to emerging markets for growth opportunities, heading across the border can be a lucrative endeavor. That leap over the pond, however, doesn’t have to be a blind leap of faith. By partnering with companies like NetSphere Strategies, who provides its clients with tools like custom-developed plug-ins, the journey can be smooth.
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