5 ways startups can cash in on the emerging markets wave

Africa is the final frontier. The subject rose quickly on CNBC after the Wall Street downturn. It has also been a major topic on the World Economic Forums on Africa‘s agenda since 2007.

While consumers were buying less in established developed markets, finding new consumers meant taking advantage: Emerging markets have over three billion people startups can target. At the very least, most people have mobile phone access. At best, disposable income on average is on the rise like never before, according to McKinsey, a global management consulting company.

So how do you take advantage? 5 ways start here:

  1. Be part of a bullish trend. And credibly so. If you are in the business of applications for mobile phones, cite the fact that wireless telecommunications development company QUALCOMM believes its new mobile medical apps will have a more successful run here than in the US. Why is that? Ownership is increasing and emerging markets are often less regulated, so getting your startup application or service out there quickly can be an edge. Tech companies don’t face the infrastructure challenge that adds delays and costs to other industries.
  2. Whatever you are doing, emerging markets are growing. And tech will continue to be part of that trend. If China’s commodity boom lessens and slows growth as some are predicting no one is going to stop going online (barring an instance where the Egyptian government decides to shut down the net). A slowdown in any one of the emerging markets is a lesser threat to tech than it is to most industries. Whatever happens, governments are willing to do a lot to get their populations connected – and you can be sure Google is doing even more. Drive this point home to investors and the media.
  3. If you have big plans, put them in context. Major companies are struggling to access emerging markets. By virtue of being in one, your foot is in the door and you know your environment. “We are an emerging markets X” is a draw card than “we want to be a global X”. Why? Because as US-based QUALCOMM shows, beginning in an emerging market with a great product now makes good business sense.
  4. Get to a summit and offer your perspective. Hundreds of conferences are on the go all the time. If you have considered your market and why you are successful, then you having something valuable to add to the analysis and endless opinion offered many who aren’t actually even active in business. Submit two press releases, one before your talk and one after, explaining why your perspective matters and what’s unique about what you are saying. It’s a credibility adder. If you don’t think you have anything to offer, ask yourself what is so unique your business. If you can’t crack the media, double check you can actually crack the market. The media does miss big stories, but more often than not great startups miss the media.
  5. Get into a trade forum: Brazil, Russia, India, China and South Africa (BRICs) are the focal point of investors. Standard Bank, released a report in November last year, predicting the BRICS’ share of Africa’s total trade, excluding South Africa, would increase from one-fifth to one-third in the next five years.

Look closely at these markets: China will make up more than half of all trade with the continent. So although the critics rightly point out we are the 27th largest economy according to the International Monetary Fund (IMF), China, is the second biggest, Brazil the eighth largest, India is ranked 11th and Russia stands at 12th.

Trade forums, whether state-run or private sector driven are entry points into networks that assess markets of millions. Cape Town-based startup Twangoo, who negotiate huge discounts on popular local goods, services and cultural events, had one simple answer when asked how they attracted interest in acquisition from Groupon: “think global”.

Put your head and your business in that environment, even before you seek to expand. Don’t assume nobody out there wants to partner to take your idea to an overseas market, acquire your IP or take a stake that will increase your working capital to accelerate your startup.



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