Economy

The Key to Cracking Emerging Markets

SMEs don't have to be at a disadvantage in fast-developing export markets. These 3 tips will help you get ahead

Written by Deborah Aarts

It’s difficult for any company to get a toehold in emerging overseas markets. With many logistical, linguistic and competitive barriers at play—not to mention the difficulty of dealing with a buyer base going through the social and political growing pains inherent to development—selling abroad isn’t for the faint of heart.

It’s even tougher for resource-strapped SMEs to do this.

Read: The 6 Hidden Costs of Emerging Markets

So why should they bother doing business in challenging fast-growth markets? To start, the number of countries surging up the development curve is growing—fast. Along with the BRIC standbys—that’s Brazil, Russia, India and China—there’s strong growth in underserved markets in Eastern Europe, Africa and Southeast Asia, too name a few.

And “these markets often yield a higher return than doing business with many of Canada’s traditional trade partners, especially the U.S.,” according to Rebecca Reuber, a professor of strategic management at the Rotman School of Management at the University of Toronto.

The benefits are potentially lucrative—so long as you’re smart about it. And that means adopting some of the practices outlined by Reuber and co-author Carole Couper in a new report published by the Conference Board of Canada. Called Success in Fast-Growth Markets: Strategies for Smaller Players, the paper identifies the three strategies that put smaller players ahead in emerging markets. Follow them and you’ll eliminate a lot of the risk of selling to developing economies.

1. Always be learning

If you’ve never done business in an emerging market, don’t presume you know how things are done there; there’s a strong likelihood you’ll have a lot to learn. Reuber and Couper suggest connecting with other entrepreneurs (preferably not competitors) who’ve entered the country to learn from their experiences. Other useful approaches:

  • Appeal to trade organizations for advice and/or guidance;
  • “Piggyback” on the expertise of customers with operations (or connections) in the region;
  • Hire a local representative to give you the lay of the land.

2. Don’t neglect relationships

In many of today’s fast-growing countries, personal relationships matter much more than they do in Canada. You shouldn’t view this as simple gladhanding; strong ties with customers and/or suppliers can give you credibility, endorsements, referrals, contacts with key players (e.g. government officials) and invaluable information on the local environment.

Read: Canada’s Missed Trade Opportunity

SMEs often neglect this step, as distance and socio-cultural differences make them tough to foster. But Reuber and Couper say this is one area in which spending extra time and money pays dividends.

3. Play up your tech edge

“Being innovative, and being seen to be innovative, helps mitigate many of the challenges of fast-growth markets,” the authors write. And in that way, Canadian SMEs have tones of potential. We tend to be very good at mastering new technology and protecting intellectual property—areas in which many players in emerging economies struggle. The challenge is making sure others know this.

“An SME that plans to do business in emerging markets should think tactically about how to increase its visibility and reputation as a credible global player, both online and in globally oriented venues,” the paper reads. Awards programs, whitepapers, speaking engagements and the like can help achieve this.

Originally appeared on PROFITguide.com