TLDR:
- Emerging markets are brimming with a lot of customer potential. Leverage it by factoring in variables relevant to the customer demographic to maximize on
- You get a significant upper hand with the early market entry advantage, such as capturing market share, setting industry standards and dominating the market with a strong presence
- You can diversify your business risk by entering an emerging market, compared to mature markets where its more prone to economic downshifts and changes in consumer tastes and preferences
- Emerging markets are all about innovation and adaptability. Niche down as much as you can to charge an even higher premium for your products and services.
- It enables you to better your strategic thinking skills from a business perspective that you can apply to the entirety of your business
- “Failure is a wonderful teacher” ~Steve Harvey
How untapping a potential market may untap the potential of your business
When it comes to looking to exponentially grow your business, there are an endless number of routes you can take. Some are low-risk routes while some are high-risk that could pay far more dividends if traversed through correctly, and one such route is emerging markets.
Everyone is quick to jump on the train for the hottest market right now. Just look at fidget spinners and slime back in 2016-17 for example.
But it’s different for emerging markets, where a lot more people would be averse due to the degree of uncertainty that may be surrounding it.
However, if you do your homework correctly, it could end up being the best risk you’ve ever taken for both your business and your life, as we explain 5 reasons why.
1. Customer Potential
Depending on the nature of the emerging market, odds are it's brimming with a lot of potential for customers, especially if purchasing power for people may have increased as a result of economic growth. If you want to leverage this:
- Conduct thorough market research to understand the specific needs and preferences of that market’s demographic. Also, study culture and economic conditions if applicable.
- Provide products and services tailored to the unique demands of that market’s customer demographic
- Implement pricing strategies that align with the economic conditions of the market.
So if the emerging market you’re looking to tap into is pertaining to tech accessories but the vast majority of buyers are those with below average purchasing power, you could introduce a budget-friendly product range.
2. Early Market Entry Advantage
Being an early entrant to any market gives you a significant upper hand, but this advantage is further amplified by emerging markets due to the low volume of competition. It is easier to establish your brand and build customer loyalty from scratch, and you can avail this advantage to the fullest by:
- Capturing market share, setting industry standards, and building brand recognition
- Dominating the market with a strong presence
- Integrating with local culture if applicable
- Hiring talent familiarized with the ins and outs of the market
A classic example is fashion. There’s always something new that is trending in the world of fashion, and if you’re a boutique store that maximizes this before it is the case, you become a trendsetter, with your reputation skyrocketing at the same time.
3. Diversification and Risk Mitigation
Tapping into emerging markets can also be a diversification strategy to spread business risk, as relying entirely on building your business in a mature market can make you prone to economic downshifts and changes in consumer tastes and preferences. You can diversify effectively by:
- Offering a broader range of products and services that cater to diverse markets and consumer needs
- Exploring emerging markets in different regions to minimize exposure to economic fluctuation in a mature market
- Conducting an in-depth risk assessment taking into account your manpower and resources to identify challenges you’d face in entering an emerging market to develop effective risk mitigation strategies
For instance, if you own a local bakery that specializes just in gourmet items that are relatively on the higher end of the spectrum, you could diversify by offering lower-budget items to cater to different customer segments.
4. Innovation and Adaptability
Typically, emerging markets are all about innovation and adaptability, and you can thrive in this regard with niching, which you can do by:
- Offering unique solutions to a very specific problem this specific avatar is facing that you know won’t be available elsewhere in the market
- An agile business model that allows you to pivot quickly in response to changes in market conditions and compete in a category of one
If you niche down as much as possible in an emerging market, you’ll be able to charge a handsome premium for your products and services. We explain the importance of niching your idea down to the max here.
5. Strategic Learning
To enter an emerging market, you have to know how to think strategically, which can enhance your business’s overall agility by:
- Serving as a testing ground for new strategies, business models, and products before introducing variations to mature markets
- Gain valuable insights from those familiar with the market that can be applied to your business
- Becoming more agile in decision-making by tackling the intricacies of complex markets, enabling quicker adaptation
Remember that the learning never stops, irrespective of whether or not you’re building a business and your age. Even if you end up entering an emerging market and experiencing failure, remember that you cannot succeed without failing initially; that’s why it’s called a high risk route.
Failure allows you to reflect, take the learnings and become both a better person and entrepreneur to inch one step closer to your end goal, for as Steve Harvey says, “failure is a wonderful teacher.”