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What emerging technologies are proving most effective for companies entering emerging markets?


This article provides a detailed response to: What emerging technologies are proving most effective for companies entering emerging markets? For a comprehensive understanding of Emerging Market Entry, we also include relevant case studies for further reading and links to Emerging Market Entry best practice resources.

TLDR Emerging technologies like Digital and Mobile Payment Platforms, Blockchain Technology, and AI and ML are strategic enablers for companies entering emerging markets, improving Operational Efficiency and market penetration.

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What does Digital and Mobile Payment Platforms mean?
What does Blockchain Technology mean?
What does Artificial Intelligence and Machine Learning mean?


Emerging technologies have become pivotal for organizations aiming to penetrate and thrive in emerging markets. These technologies not only offer a competitive edge but also enable companies to overcome traditional barriers to entry such as infrastructure deficits, regulatory complexities, and fragmented markets. Below, we delve into specific technologies that are proving most effective for this purpose, supported by real-world examples and authoritative statistics.

Digital and Mobile Payment Platforms

The adoption of digital and mobile payment platforms is revolutionizing financial transactions in emerging markets. These technologies facilitate smoother, faster, and more secure transactions, which are crucial for businesses operating in regions with underdeveloped banking infrastructures. According to a report by McKinsey, digital finance could add $3.7 trillion to the GDP of emerging economies by 2025, underscoring its transformative potential. Digital payment platforms like M-Pesa in Kenya have not only simplified transactions but have also significantly reduced the costs associated with cash handling and transportation, thereby enhancing operational efficiency.

For organizations entering these markets, leveraging digital and mobile payment technologies can lead to increased market penetration and customer base expansion. These platforms offer the added advantage of generating valuable data on consumer behavior, which can be analyzed to tailor products and services, improve customer engagement, and optimize marketing strategies. Furthermore, digital payment solutions are instrumental in fostering financial inclusion, enabling businesses to reach previously unbanked or underbanked segments of the population.

Real-world examples of successful implementation include companies like Paytm in India and GrabPay in Southeast Asia. These platforms have not only facilitated easier transactions but have also integrated financial services such as loans and savings, thereby becoming a one-stop financial solution for their users. This holistic approach has enabled businesses to build a loyal customer base and drive growth in these dynamic markets.

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Blockchain Technology

Blockchain technology is gaining traction in emerging markets as a tool for enhancing transparency, security, and efficiency in various sectors including finance, supply chain management, and governance. A report by Deloitte highlights blockchain's potential to streamline operations, reduce fraud, and cut costs by providing a decentralized and tamper-proof ledger system. For instance, in supply chain management, blockchain can offer real-time tracking of goods, from production to delivery, ensuring transparency and building trust among stakeholders.

Organizations can leverage blockchain to navigate the complex regulatory and operational landscapes of emerging markets. By enabling secure and transparent transactions, blockchain technology can help mitigate risks associated with corruption and fraud, which are prevalent challenges in these regions. Additionally, blockchain can facilitate cross-border transactions, making it easier for companies to expand their operations internationally without the need for intermediaries, thereby reducing transaction costs and improving efficiency.

Examples of blockchain technology making a significant impact include IBM's TradeLens platform, which enhances the efficiency of international trade logistics, and BitPesa, a platform that uses blockchain for cheaper and faster cross-border payments in Africa. These applications demonstrate how blockchain can be a game-changer for organizations aiming to establish or expand their presence in emerging markets.

Artificial Intelligence and Machine Learning

Artificial Intelligence (AI) and Machine Learning (ML) are at the forefront of technological advancements reshaping how organizations operate in emerging markets. These technologies offer unprecedented opportunities for data analysis, customer segmentation, and personalized marketing, which are critical for understanding and catering to diverse consumer bases in these regions. According to Accenture, AI could increase productivity by up to 40% and enable businesses to save significant costs by automating routine tasks and optimizing operations.

AI and ML can also play a crucial role in overcoming language and cultural barriers, which are common challenges in emerging markets. Through natural language processing and machine learning algorithms, organizations can develop multilingual customer service solutions and culturally relevant content, enhancing customer experience and engagement. Additionally, AI-powered analytics can provide insights into local market trends, consumer preferences, and competitive landscapes, enabling companies to make informed strategic decisions.

One notable example is Jumia, Africa's leading e-commerce platform, which uses AI to optimize logistics and delivery services across the continent's diverse and often challenging terrains. Similarly, Alibaba's AI-powered ecosystem has been instrumental in understanding and serving the vast and varied Chinese market, demonstrating the potential of AI and ML to drive business success in emerging markets.

These emerging technologies are not just tools but strategic enablers that allow organizations to navigate the complexities of entering and expanding in emerging markets. By adopting digital and mobile payment platforms, blockchain technology, and AI and ML, companies can enhance their operational efficiency, build trust with local consumers, and gain a competitive advantage in these dynamic and growing economies.

Best Practices in Emerging Market Entry

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Explore all of our best practices in: Emerging Market Entry

Emerging Market Entry Case Studies

For a practical understanding of Emerging Market Entry, take a look at these case studies.

Telecom Digital Infrastructure Expansion in Africa

Scenario: The organization is a mid-sized telecom operator based in Europe, looking to expand its digital infrastructure into the African market.

Read Full Case Study

Market Entry Strategy for Luxury Brand in Southeast Asia

Scenario: A high-end luxury brand specializing in bespoke jewelry is looking to enter the Southeast Asian market.

Read Full Case Study

Market Entry Strategy for Professional Services in Latin America

Scenario: A professional services firm specializing in financial advisory is seeking to expand its operations into an emerging Latin American market.

Read Full Case Study

Strategic Emerging Market Entry Initiative for a Generic Pharmaceutical Producer

Scenario: A rapidly growing pharmaceuticals producer, based in developed markets, aims to expand its footprint in emerging markets.

Read Full Case Study

Consumer Packaged Goods Expansion into Southeast Asia

Scenario: The organization is a mid-sized producer of consumer packaged goods, specializing in organic health foods with a significant market share in North America.

Read Full Case Study

Market Entry Strategy for Construction Firm in Southeast Asia

Scenario: A construction company based in Southeast Asia is facing challenges in entering new emerging markets within the region.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

How can companies effectively balance the need for local customization with the benefits of global standardization in emerging markets?
Achieving a balance between Local Customization and Global Standardization in emerging markets involves deep market insights, leveraging Global Efficiencies through technology, and Adaptable Business Models for competitive advantage. [Read full explanation]
What strategies can companies employ to mitigate the risks associated with political instability in emerging markets?
Mitigate risks in emerging markets with political instability through Comprehensive Risk Assessments, Strategic Partnerships, and Operational Diversification, enhancing resilience and leveraging growth opportunities. [Read full explanation]
How should companies adapt their product development processes to better meet the needs of consumers in emerging markets?
Unlock growth in Emerging Markets with tailored Product Development, focusing on Market Research, Product Localization, Agile Development, and Continuous Innovation for a competitive edge. [Read full explanation]
How are geopolitical shifts influencing market entry strategies in emerging markets?
Geopolitical shifts necessitate adaptable Market Entry Strategies in emerging markets, emphasizing the importance of Strategic Partnerships, Digital Transformation, and Risk Management to mitigate challenges and seize opportunities. [Read full explanation]
What emerging market sectors are experiencing the fastest growth due to digital innovation?
Digital innovation significantly impacts Healthcare, Financial Services, and E-commerce sectors, driving growth through telehealth, fintech advancements, and online shopping innovations, despite facing challenges like data privacy and regulatory compliance. [Read full explanation]
How does globalization impact regulatory compliance for businesses entering emerging markets?
Globalization increases regulatory complexity for businesses entering emerging markets, necessitating Strategic Planning, Risk Management, and investment in local legal expertise and technology for compliance agility. [Read full explanation]

Source: Executive Q&A: Emerging Market Entry Questions, Flevy Management Insights, 2024


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