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Get Globalization Right. Focus on these 5 Emerging Markets.

The desire to be a global brand in itself is not enough to reach the goal. There are a number of factors a company has to consider when expanding their business to new markets. Along with the demographics of the region and demand for your product, several other policy and regulatory factors play an important role in a brand’s globalization strategy. These factors include economic and political status of the region, ease of doing business score, cost and time needed to set up a business or get an electric connection, and ease of availing credit to name a few. In 2018, countries such as Djibouti, China and Azerbaijan showed immense progress in their economic and regulatory reforms in an effort to attract foreign business. Some others like Yemen and Somalia continued to be difficult countries to do business in. This blog lists top emerging countries you should consider when planning your expansion and globalization strategy in 2019.

But first, what is Globalization?

Globalization is the process that addresses the issues associated with launching a product or brand globally and starting business operations that cater to people of more than one country.

To put it in simple terms, globalization is selling your products and/or services in countries other than the country of origin.

While most companies dream of having a truly global brand, a lot goes into making people of a country feel connected to it while keeping the brand’s voice and tone consistent in all regions. Strategists and marketers call this a Glocal strategy.

Take Starbucks’ globalization strategy for example; as of 2019, the coffee giant has more than 20,000 stores across 63 countries and boasts of being the world’s most popular coffee house. While most believed that the coffee joint was taking steps towards its own demise given the cultural differences in all the countries, Starbucks has been standing tall in countries like China since 1999 where tea dominates the beverage industry. They battled the general dislike for coffee in China by introducing coffee-free drinks. And in regions of South-Asia, the company introduced adaptable seating for larger groups giving it a truly local feel while maintaining brand consistency.

Examples of successful Glocal strategies are plenty like Dunkin Donut’s dry pork and seaweed donuts for China, Coca –Cola’s FIFA World Cup campaign featuring local celebrities and cultural references, Ikea’s tatami floor mats in Japan.

Building a global brand isn’t easy, but with countries simplifying procedures and a greater understanding of the local population, it is definitely more achievable than it was a decade ago. As of 2018, it is easiest to set up a business and operate in most European countries, New Zealand, Singapore and a few others. But the demand and growth in these markets is far less as compared to emerging countries.  Emerging markets easily offer a growth rate of 4-5% per annum whereas developed countries can offer only about 2-2.5%. Emerging markets are therefore important aspects of your globalization strategy.

Here’s a list of the most viable and sought-after emerging markets in 2019:

  1. China: With a population of 1.4 billion, China offers the largest customer base for your company and brand. According to a Forbes and an Emarketer report, the Chinese consumer is turning to healthier habits, demands premium products and is willing to pay a high price for luxury. The Chinese are also spending more on services like entertainment and relaxation as compared to physical products.
    To improve the business scenario in the republic, the Chinese government has made it easier for foreign companies to set up shop in the country and trade with neighboring nations. A bunch of reforms such as faster electric connections, online payment systems, improved construction approval processes and easier cross –border trade have been implemented resulting in faster business cycles for foreign companies. These reforms have helped China move up to the 46th position in World Bank’s Doing Business 2019 report with an increase of +8.64 points. This makes China 2019’s top emerging market to do business in.
     
  2. Indonesia: In 2017, it took about 23 days to start a business in Indonesia as compared to 53 days back in 2015. Standing tall at number 73, Indonesia has combined social security registrations, reduced notarization fees in both Jakarta and Surabaya, reduced the time taken to solve disputes over land, enhanced land registry transparency and improved access to credit information to make the country an important centre for global business.
    Emerging economies provide more business opportunities and in Indonesia, sectors like infrastructure, transport, hospitals and medical facilities, and high value commodities are expected show an increase in demand. Being blessed with an abundance of raw materials and commodities, it will be easier for manufacturing companies to source material at cheaper costs in Indonesia. A relatively stable political scenario, a young, large and burgeoning population and low labor costs make Indonesia an important hub for international business in 2019.
  3. Vietnam: Vietnam is one of the more politically and socially stable countries in south-east Asia, promising a safe environment for your business. Vietnam has a population of 95Million comprising of a fast-growing middle class with a high purchasing power. Vietnam has shown a strong interest in being part of global trade organizations such as ASEAN and WTO and has made many regulatory, political and economic reforms to be accepted in the group. The country has also been working hard to make the business environment more friendly and simple for foreign companies.
    Recently, the country introduced a number of reforms such as: a) reduced the cost of registering a business, b) made starting a business easier by publishing the notice of incorporation online c) reduced tax liability of a company by reducing the employer’s contribution to the labor fund d) made paying taxes easier by omitting the need to submit a hard copy of the VAT return and d) made provisions for joint payment of the business license tax and VAT. Foreign companies have already shown trust in the country by pledging more than 11.2 billion as FDI in 2018. It now takes about 17 business days to set up shop and start operations in Vietnam making it 69th easiest country to do business in 2019.
     
  4. India: With a population of 1.3 billion India ranks second among countries with the highest population. This massive pool of lower middle and middle class people has the potential to be a target group for companies representing a number of industries. According to a McKinsey Global Institute report, by 2025, 69 cities in India will have a population of over one million each increasing the demand for businesses to support their livelihood. With the government’s focus on economic development and growth, ease of doing business in India has increased to a great extent.
    The World Bank’s Doing Business report of 2019 ranks India at number 77 with an ease of doing business score of 67.23. India has implemented a number of reforms like a) replaced VAT with GST and made GST registration simpler b) abolished the practice of site inspections for registering companies under the Shops and Establishments Act c) streamlined the process and reduced cost of obtaining a building permit d) made it easier to get an electric connection and e) made it easier to avail credit in the country. These reforms, coupled with India’s young workforce and a strong startup ecosystem make India an important option for your globalization plans.
  5. Georgia: Georgia is the only emerging country to rank in the top 10 countries for ease of doing business. Similar to New Zealand, it takes a day to open a business in Georgia, the least in the world. The country has implemented economic and governance reforms earning it the status of a “Star Reformer”. Georgia has good trade relations and agreements with the EU and China, proving favorable for international trade. It is also supporting companies catering to the energy, tourism and agribusiness industries. The government of Georgia is making efforts to redevelop the country and make every village or town a 4 star location for residents and tourists.
    This opens new avenues for the construction, transportation, energy and tourism industries. With a population of 3.7 million and the government giving a push to economic development and growth, this emerging market should definitely be considered in your globalization plans. 

Once the countries are picked you have to remember that:

  • Reaching these markets is not an easy task. Each country is different in its own way, be it their culture, language, or product preferences.
  • For your company or product to succeed in a new country, it is important that you take steps to understand the audience in the country and build a connection with them.
  • You can build a connection by understanding local cultures, speaking to people in their language and tone, being aware of scenarios frowned upon in the country and avoiding them.
  • Translating your website, app, branding and packaging materials and localizing social media accounts are simple ways to break the barriers of communication.

Example: Coca-Cola has an India Facebook page with campaigns for Indian festivals such as Diwali, Indian Independence Day and Navratri. Whereas, their page in Brazil has posts in Brazilian-Portuguese and covers topics such as black women empowerment, river cleaning and Coca-Cola’s products for Brazil.

The ideal way to go about with your globalization, translation and localization strategy is to partner with a language service provider. LSPs work with language and subject area experts in over 50 languages, proving to be a one-stop solution for all your needs. They not only guarantee accurate translations, but also speed up the process and cost less compared to having your own translation and localization team. LSPs are now equipped to take on a wide variety of projects like marketing localization, life science localization, app localization, and finance localization to name a few. They also work on your preferred CMS platforms so you don’t have to waste time sharing files.

See how pharmaceutical giant Alvogen Pharmaceuticals (Lotus) and the world’s third largest comic book publisher Dark Horse Comics entered new markets and captured the attention of the people instantly.

Ulatus is one of the world’s most trusted LSPs with 200,000+ happy and satisfied clients such as Netflix, Toyota, Skullcandy, and many others.

Get in touch with Ulatus now to get your globalization strategy right!

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