Emerging markets comprise more than 85% of the world’s population, and this accounts for 50.1% of global GDP in 2023 – and 66% of global GDP growth in the past 10 years. So, why is there so much reluctance to expand into such potentially lucrative markets?

Full disclosure: I completely understand any hesitance in entering an emerging market.

Not only do many emerging market economies have poor infrastructure, which can make it difficult to transport goods, and to communicate with customers and suppliers, there can also be a shortage of skilled labour, making it hard to find qualified employees.

Businesses are also often put off by regulations in emerging markets, which can be complex and difficult to navigate. And it’s sometimes the case that complying with local laws can be time-consuming and costly. Related to this, the legal systems in many emerging market economies can make it difficult to protect intellectual property, enforce contracts, and resolve disputes.

Then, of course, there is access to financing; many emerging market economies have underdeveloped financial systems, which can make it difficult to access financing for business operations and expansion. And even if financing can be arranged, there is often the obstacle of volatile currencies.

This is all in addition to the challenges thrown up by the political instability which characterises many emerging economies.

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None of this changes the fact that emerging markets represent an untapped wealth of opportunity. They make good investments thanks to their propensity for rapid GDP growth compared to more mature markets. But businesses need to walk in with their eyes open and fully prepared.

What you need to know when launching in an emerging market

Success in emerging markets takes a nuanced approach and an understanding of the unique challenges they present.

It’s vital to learn about the preferences, needs, and purchasing power of the local population, as well as local laws, regulations, and bureaucratic hurdles. I also highly recommend developing a localised strategy and consider partnering with local firms that have market knowledge, distribution networks, and established credibility.

All of this will help build a strong local presence, which will be further strengthened by hiring and training local talent with market understanding who can build trust with consumers.

Once you have a foothold in your target region, you will also find it useful to understand local values, communication styles and business practices. This will not only build trust with local partners, employees, and customers, but help you adapt your growth strategy in line with local preferences and market dynamics.

Take the time to research the culture within a target emerging market, including understanding the local language, religion, history, and social customs, and prioritise building strong relationships with local partners and stakeholders.

As a local payments platform for often overlooked geographies, PayFuture Technologies knows what it takes to make it in emerging markets; not least, a strong vision and the determination to succeed.

A good business model will only take you so far: it’s often not what you know but who you know. Building good relationships with customers as well as negotiating complex government regulations can facilitate smoother operations, as can the ability to pivot your strategy in response to market changes, consumer trends, or new regulations.

A leap of faith worth taking

Operating in emerging markets forces a business to be innovative, leading to a culture of creativity and the development of new products, services, and business models. It should therefore come as little surprise that emerging market economies are home to some of the world’s fastest growing and most dynamic businesses, and they’re attracting increasing attention from investors and multinational corporations seeking new opportunities for growth and expansion.

There are so many emerging countries around the world, all representing huge untapped consumer bases. India, Brazil, Egypt, Mexico, Peru, Japan, Thailand, Ghana, Kenya, Malawi, Bangladesh, Pakistan, to name a few. As these economies grow, so does the purchasing power of their populations.

For businesses willing to remain open to adapting business practices and strategies based on feedback and cultural insights, there is a wealth of opportunity – making it well worth navigating the unique challenges associated with these areas.

Success in emerging markets may take time, flexibility, and a fair share of courage, but stay the course and you’ll be a step closer to establishing yourself as a market leader.

Zaki Farooq is co-founder of PayFuture Technologies Dubai