Doing business in emerging markets | BDC.ca

How to sell in emerging markets without getting burned

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In recent years, developing economies in Asia, Latin America, Africa and the Middle East have been touted as hot destinations for Canadian exporters.

Why? Because their growth rates are higher, often much higher, than in the developed economies of North America and Europe.

But with great opportunity often comes great risk. Emerging markets can have volatile political and economic environments. Stories of rampant corruption, red tape and lack of intellectual property protection can make an otherwise attractive market seem too challenging to tackle.

Then, there are the logistical and cultural challenges of doing business far from home.

Help is available

However, Canadian businesses don’t have to navigate these choppy waters alone. There’s advice and services available from various government organizations in Canada.

For example, BDC’s Global Expansion consulting team advises Canadian entrepreneurs on their exporting and international expansion projects.

Another good source of assistance is Export Development Canada (EDC). EDC supports exporters with financing, insurance and bonding services as well as advice. Another resource is the Canadian Trade Commissioner Service, which has a presence in 161 cities worldwide and offices across Canada. It offers advice on exporting and free information about specific countries and sectors.

What’s in demand?

Rapid growth in emerging markets has increased demand for both raw materials and specialized products and services.

Top export niches include infrastructure (roads, railways, ports, public transit and airports), transportation, telecommunications, health-related products, business management systems, agri-business, environmental technologies, power generation and machinery and equipment (particularly for the resource sectors).

Your research should include finding out where Canadian companies in your sector are already active. You should try to gather as much information as you can about how they’re tackling those markets, including such things as the marketing strategies and distribution channels they’re using. Exporters in other sectors can also be valuable sources of information about the challenges of doing business in specific markets.

The tools to build trusted relationships

Once you are on the ground in a foreign market, it’s crucial to build the right long-term relationships.

One critical player on your team will often be a foreign sales agent. This is an individual who is a resident of your target market and has experience generating sales on behalf of organizations comparable to yours.

Awareness of culture and local customs is also important. Your business dealings must be conducted in a manner that demonstrates proper respect and etiquette.

Dealing with language

Language is an obvious barrier. You can, of course, hire interpreters and bilingual staff, but also arm yourself in other ways. You should make all your promotional materials, price sheets, business cards and PowerPoint decks in the local language.

Finally, take the necessary precautions to protect your trademarks and other intellectual property at the outset. And be prudent in your dealings with local partners. Check out any potential partner’s financial records and key personnel, and be wary of agreements with long payment terms.

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