How to Access Emerging Markets with the
Overseas Business Network
Susana Córdoba
Overseas Business Networks Adviser – North West
What we will look at
• What markets are considered ‘Emerging Markets’?
• Why UK export ready companies should be looking at ‘emerging
markets’, and not only EU, to generate significant export growth
• How UK’s current Trade Outlook looks like?
• How we are supporting UK companies to get into new high growth but
also considered hard to access markets
What are Emerging Markets?
•
Emerging Market is defined as an economy with a
low middle per capita income
•
Vary in size – from small to large
•
EMs are characterised as ‘transitional’, meaning they
are moving from a closed economy to an open
market economy
•
These markets are also introducing massive
economic development and political reforms to
enable a more robust economic performance,
transparency and efficiency.
•
Most of these markets are also recipients of major aid & guidance from donor
agencies such as the World Bank, IMF & EU.
•
EMEs also experienced increase levels of both local and foreign investment
Demographics & overall GDP growth
According to an Euromonitor International Report (2013), EMEs were
home to 80% of the World’s population.
The share of people under the age of 30 worldwide has shrunk from
62.1% in 1980 to an estimated 49.8% in 2014. However, Did you know
that currently, emerging markets & Developing economies stand out as
home to a massive 89.8% of the under 30s population? - One of the
main drivers for internal consumption and growth.
In 2000, Emerging Markets accounted for 37% of the global GDP (in
purchasing power parity terms). By 2020, they are expected to reach 65%
of the global GDP.
Consumer Profile
•
Growing middle classes with higher purchasing power. Over 95%
of the purchasing power is outside the UK.
•
Fragmented Markets, there are also still income gaps
•
Demanding markets & cultures
•
Value for money especially for those with limited resources.
•
Tailored to their needs e.g. smaller sizes, packaging
•
High Quality & luxury products
•
Consumer spending - Thirst for Brands, latest gadgets, luxury
consumer products (health, beauty, food and drink , accessories,
clothing, etc.)
•
Environment Focus
•
Fitness & Healthy living
Consumer Profile
• Digitally attuned - Internet |Social Media
|E-commerce – New ways to reaching
global customers
• Increase use of Mobile devices – which has
revolutionized how financial services in
many regions. Did you know that Africa is
known as the ‘mobile continent’?
Researchers predict the use internet on
mobile phone will increase 20-fold in the
next 5 years (double the rate of the rest of
the world)!!!!
Consumer Profile
• Increase tourism and immigration
to developed countries.
• Enhancing their talent pool by
sending their brightest to the best
universities in the world.
• Remittances sent to developing &
emerging markets have grown massively.
LATAM & Caribbean for example, have
grown at double digits in the last decade
helping massively reducing the level,
depth and severity of poverty in these
countries.
Logistics & Infrastructure
• Infrastructure is weak – hence major
investment projects are underway to
improve it. From Hospitals and education
centres to bridges, airports, roads, ports and
more.
• Distribution Channels are weak and
complex – require careful consideration
• Technology remains under-developed in
some large rural areas (e.g. Africa, Asia)
• Large Urbanization projects as more
people move from rural areas to the cities
Political Stability & Business Environment
•There has been significant changes in some of the Emerging Markets which were
considered 20 yrs ago were seen as highly unstable. E.g. Colombia.
• Through political and economic reforms, many emerging markets have improved
their ‘Ease of Doing Business’ – we can see many of them climbing the ladder
according to the World’s Bank guide.
• Developing countries still have enormous challenges in the areas of education,
health and social services. 1.2 billion people still live on less than $1 a day. These
challenges are also create opportunities for British products and services which are
innovative and address these challenges.
• Emerging markets have a vast population of highly entrepreneurial population
operating within the informal sector
Future Of Emerging Markets
•
Between 2013 and 2020 emerging market economies will grow almost three times
faster than developed economies. Emerging Markets combined economies would
have expanded by 45.6% between 2013 & 2020 – but that includes huge
disparities amongst some.
•
Between 2013 and 2020 emerging markets will account for an average of 65% of
global economic growth;
•
By 2020, five of the world’s largest 10 economies will be emerging markets—
China, India, Russia, Brazil and Mexico—accounting for a combined $47 trillion in
GDP
•
Between 2013 & 2020, emerging markets will experience population growth 3x
than those in developed economies
*Source: Euromonitor International Report 2013
Emerging Markets – Outward Investment
CEMEX
Founded in Mexico in 1906 has grown
from a small regional player to a
world’s top company in the industry.
In 2005 expanded into 20 European
locations, including the UK.
TATA STEEL
Founded in India in
1907. In 1999 entered
the UK market via a
joint venture known as
Corus, and in 2010
became Tata Steel UK.
What is the UK’s Trade Outlook?
• According to HMRC, UK’s top 5 trading partners are (As of May 2015)
IMPORTS
EXPORTS
Germany
USA
USA
Germany
China
China
Netherlands
Netherlands
France
France
The EU continues to be the main
trading partner for UK, however, the
Eurozone keeps registering a sluggish
recovery, with a forecast growth of
1.5% for this year (European
Commission).
Emerging Markets on the other
hand, despite of recent slow down
in growth by some of the giants such
as China and Brazil, their combined
average GDP still is forecasted to
grow at a much faster pace (5,2%)*
than developed countries.
What is the UK’s Trade Outlook?
• The UK is the 7th largest importer & 12th largest exporter in the world. By 2014,
according to HMRC stats, UK’s imports amounted £438bn, whilst exports were
for £287bn, which making our trade balance in deficit.
• CBI & BCC also estimates that only 1 in 5 SMEs in the UK currently export.
• BCC’s forecast is positive in terms of export growth for 2015, but much more
needs to be done to double exports to £1tn and number of exporters by 2020.
Can British firms double exports by 2020?
• We need a massive cultural
change – more risk taking
• Exporting requires time &
investment but fruits will be
reaped in the long term.
• Use of the available support
EXPORTING is GREAT
• There has never been a better
time to export - the ‘Made in
Britain’ brand not only well
recognised but demanded
worldwide.
Overseas Business Network Initiative
 Launched in 2012 by the Prime Minister
 Responds to Government’s ambition to double UK exports to £1trillion and
increase number of exporters by 100,000 by 2020.
 An innovative partnership between the British Chambers of Commerce, UK
Trade and Investment, and the Foreign and Commonwealth Office
 Working with British Chambers of Commerce and British Business Groups from
35 high growth markets but also hard to access markets.
 Aimed at transforming the export support available to British SMEs seeking to
do business in high-growth, hard-to-access emerging markets across the
world.
Overseas Business Networks presence & future
development
USA
LATAM
Mexico
Colombia
Chile
Brazil
EUROPE
Poland, Czech republic,
Slovenia, Slovakia, Hungary,
Rumania, Turkey, Russia
ASIA
China, India, Thailand
MIDDLE EAST
Philippines, Indonesia
UAE, Qatar,
Vietnam, Singapore
AFRICA
Saudi Arabia,
Malaysia
Morocco, South Kuwait
Taiwan, Cambodia,
Africa, Nigeria,
Myanmar, Burma, South
Kenya,
Korea, Japan,
Mozambique,
Kazakhstan, Pakistan
Angola, Ghana,
Algeria
Future expansion envisaged in coming years up to 40
markets for 2016-17
What this means to UK SMEs?
 A British Overseas Business Network offering services and support here in the UK &
overseas, in every stage of your export journey
 Tap into a wider range of sector expertise & qualified knowledge on international
trade
 Inclusion of innovative services to help you succeed overseas
Getting
Started
Planning for
Success
Making
Connections
Making it
Happen
Growing
your
Regional
Presence
Overseas Business Network Services
Market Insight
• Get up to date information on the country of interest, together
with a broader sector specific information
• Identify challenges and opportunities, and understand the nuances
of doing business in a particular region or country
Market Entry
• Market Research Services from routes to market to introductions
to agents, distributors, buyers, suppliers or business partners.
• Introduction to Professional Business Services in country (e.g.
trusted lawyers, accountants, translators, logistic services)
• Soft Landing base – access to a physical base to get you started
offering you an office outside home
Overseas Business Network Services
Market Development
• Specialist advice on the best routes to market – from
appointing an agent or distributor, to establishing a Joint
Venture or a representative office / subsidiary.
• Market Entry Services: Tailored advice, research, marketing
support (Product/Services launch events) and more.
• Access to satellite offices in larger markets such as China and
India
Growing a Regional Presence
• Introduction to approved business to business support groups
in the markets of interest
• Connection to regional distributors & other reputable contacts
• Help with gaining access to government and other support
Overseas British Chambers & British Business Centres
SUCCESS STORIES - ROMANIA
SUCCESS STORIES - SINGAPORE
SUCCESS STORIES – POLAND
Thank you!
For further information and support
e: susana.cordoba@gmchamber.co.uk
M: 07770 17536