The BRICs are expected to rank among the biggest economies in the world by 2050. Dan Bobby, co-founder and chief executive at Calling Brands reveals five areas to consider when targeting this market.
The key to succeeding in the BRICs is understanding the scale of challenges you will face. If you are looking to enter this market now, you are already behind the curve, and to be successful, you will need to be competitive and have a genuinely compelling point of difference.
That said, there are categories with explosive growth projections across the BRICs, and the 2016 Olympics in Rio presents many commercial opportunities.
But you have to be careful and ask yourself whether your competitive edge in the UK is transferable. What will you be bringing to the table that doesn’t already exist? Why should potential customers stop buying from a company they know and trust and trade with you?
Below are five areas of consideration that can significantly help to ensure you are on the right track – however, if you only take one thing away from this article, it should be the first point.
1. Adapt to the culture
While you may have identified an opportunity for your business, the differing culture and value sets are not to be underestimated; neither should the length of time it will take to get everything set up and running. You may be required to adapt your product or service to meet local regulations, tastes and preferences.
There are also many cultural differences that need to be understood, for example in China, ‘yes’ doesn’t always mean ‘yes,’ saying ‘no’ or ‘I don’t know’ is considered rude so yes can mean, we will try. Having a local on your team is vastly beneficial as they can help translate the cultural differences and make the initial culture shock less overwhelming.
2. Know who you’re up against
You need to investigate whether your competitors are trading internationally, and if so where, as some markets will have already been exhausted.
Can you compete against the big guns? In Brazil, larger multinationals such as GM, Siemens and Fiat have been established for a long time. In China, some markets are dominated by one brand – Boeing, Microsoft and Apple, to name the biggest ones. Microsoft, for example, has 99.3 per cent of marketshare in PC operating systems in China, with no competition.
In some cases, BRIC countries answer their own demand by taking inspiration from western brands and making their own versions. So before entering a BRIC market – or any market for that matter – it’s important to ensure there is a secure and reliable environment for protection of intellectual property.
3. Ensure it will make money
Considering your pricing strategy is very important, you must work out if you can sell at a price that will produce a reasonable profit margin while being competitive. This is not just because the pricing expectations will be different, but also because you will be working against intra-BRIC trading. So if you cannot adapt your business model to serve the emerging market, fast-growing companies from other emerging markets will fill the gap.
4. Know your USP
On a positive note, in Europe we have an advantage over rival emerging countries due to our understanding of brand marketing.
In my experience with BRIC countries, it’s not often we find customers who understand the power of branding as a tool to transform and differentiate their business. In China, for example, branding just isn’t given the importance that it is in western countries. In Brazil, the view of brands is also still pretty one dimensional – customers want a logo or graphics, rather than a brand in the true sense.
Knowledge of how to create and grow a brand is a potential strength, but assuming you’re already an important brand in any BRIC market would be a massive weakness.
5. Understand the market
Before heading off into any overseas market, you need to do your research.
First and foremost, you’ll need to make sure the market you want to enter is open to you and check whether restrictions apply. Next, the research – which can be carried out through looking into economic and sector analysis via the internet – consulting with suppliers, customers, consultancies, research agencies and public sector trade promotion organisations.
In your research you will need to investigate the geographical location, examine the culture and the availability of talent.
So as you can see it’s a challenging undertaking. However, if done correctly, you could be onto something truly enterprising and in the long-run benefit from expanding and marketing in the BRICs.