Tony Blair, told Newsweek last year, The New World economy we find ourselves inhabiting is indifferent to tradition and past reputations. Success will go to those companies and countries which are swift to adapt. He added that the Chinese economy is growing three times faster than the UK’s and the emerging economies of Asia and South America are seizing the opportunities and transforming their societies.
The B2B sectors within these markets are set for rapid expansion. The services sectors of the Indian and Chinese economies grow at 60 per cent and 40 per cent plus per annum respectively. The demand for market research into emerging markets increases each year, but B2B markets are harder to research than consumer markets.
Learning the language
The first obstacle to assessing B2B opportunities in emerging markets is the shortage of secondary data. Company statistics, demographic data and specialised industry reports are extremely basic or non-existent. Locally-based employees or sales agents are a market intelligence source; the downside is that they don’t always provide the depth of detail needed. Insights are clouded with a ‘rose-tinted’ view or there is an inability to quantify the opportunity, in comparison to other emerging regions.
The bottom-line is that ‘local’ contacts are not research experts.Sometimes the ‘low cost’ option of desk research, combined with putting out ‘feelers’ to your network of human intelligence sources, is sufficient. Yet, more often, a fully scoped B2B market research project will yield better results.
Huge distances, time-zones, language and cultural barriers – plus the need to schedule research around local events – adds complexity to research in emerging markets. However, these issues are not problematic for experienced research agencies. For clients, the four major issues to watch out for with B2B research are:
1. Finding the right people to research. Business networks operate on more informally and the absence of quality business directories or sample lists is a major issue. In India, this can be resolved by descending on a business district and recruiting respondents face-to-face. The same approach won’t get you far in Sao Paolo where the businesses expect appointments to be made in advance.
2. Methodology used in developed economies may not be applicable. Emerging markets have long-established ways of doing business. For example, in India the word ‘no’ has harsh implications; evasive refusals like ‘I’ll try’ or ‘perhaps’ are more common. Closed questions seeking ‘yes’ and ‘no’ answers may not have any real meaning, unless ‘cultural bias’ is taken into account.
3. Tapping into the informal business networks is difficult, but can deliver results. In Chinese business , the concept ‘Guanxi’ or ‘relationships’ is practiced. An informal network of interconnected parties supports one another and exchange favors on a voluntary basis. Relationships are developed over dinner or on a golf course. The ability to tap into the right Guanxi, is critical.
4. Local rules and norms apply, so the research needs to be adaptable. This is best seen in Brazil, where the unexpected is considered to be inevitable. Consequently, business decisions are often put off until the last minute as plans can quickly change. For this reason, ‘jeito’, or ‘the quick fix,’ is a way of life. A whole class of ‘despachantes’ exist to find a solution for others who lack time or know-how.
Emerging markets are in transition from ‘developing’ to ‘developed’ status. Now may be a good time to investigate emerging markets opportunities. Here are five tips to get started:
1. Establish the foundations. Unless you are fortunate, information about your business sector is probably not available. However, there is good background material that enables you to familiarise yourself with markets of interest. The World Bank, IMF and CIA websites are excellent sources of statistics, economic indicators and country profiles.
2.Utilize ‘free’ intelligence sources. Conversations with colleagues ‘on the ground’, channel partners or sales agents provide insights on opportunities. Many trade and professional associations have international department that can be contacted. If initial findings are positive, a field trip would yield deeper insights before launching further research.
3. Select an appropriate partner. Without first-hand knowledge of the emerging markets, it’s best to use a market research agency. The essential criteria are that they should be B2B research specialists, know your sector and able to produce client references. Reputable companies are listed in the UK Research Buyers Guide.
4. Give yourself a longer lead-time. Emerging market projects involve multiple agencies, languages, time-zones, contacts and timings. Business takes place at a slower pace and the desire to meet, understand and engage with contacts directly is much stronger. Allow extra time than is normal for European or US based projects.
5. Be flexible. Research tools that work in developing economies are narrower. Phone interviews and online research can be effective, but face-to-face interviews probably work better. Direct comparison with existing markets is not always possible, or appropriate. The new market won’t change for you, so accept the limitations and accustom yourself to it.
