If you want to be a global company, you need to consider every market. According to McKinsey & Company, the total value of consumption in the emerging markets is tipped to be valued at $30 trillion by 2025; which nearly represents 50 percent of the world’s total consumption. Everyone is desperately trying to get a piece of the pie, from freshly minted startups to established multinationals.
But it is no easy task, and many have failed in the past. Well established companies like Microsoft – to the chagrin of Bill Gates – have failed to make an impact in high-growth markets. Take the case of Microsoft in China as an example. During a business trip a decade ago, Gates was asked how much money Microsoft Corp. was making in China, and the figure was so low the official had to ask the interpreter to confirm his response. Not a lot has changed since then.
Many startups have ambitiously entered these untapped markets without a strategic local plan. Each country has its own particular nuance, and unless you build local relationships, you won’t understand these nuances.
Lamudi now operates in 13 countries through Latin America, Asia and Middle East with a tailored approach to real estate in each country. We are the fastest growing property portal in history in terms of expansion into new geographical markets, revenue, and site visits. How did we manage to get to that point? Here are some tips that helped us get to where we are.
Utilising local talent
During the initial start-up phase, we spent a lot of time in each prospective country, meeting with local agents in person and hiring all senior executives ourselves. Getting top local talent on board should be a fundamental entry strategy.
Identifying high-growth markets is only the first step. Gaining an understanding of how much to adapt according to local preferences demands extensive research.
It’s important to fully research both consumer behaviour and market predictions. We also focus on taking advantage of our local know-how to implement best practice solutions in emerging markets. All of our markets are on the same level as developed markets such as Germany or the USA, because the technology is the same. However, we always need to adapt to local infrastructures. In some countries, internet penetration is still in early stages.
Education and consumers’ journeys
We also owe much of our success to marketing activities. Real estate is clearly moving online. There’s still a lot of space to educate markets because people are not aware of the existence of one marketplace that combines offers from the entire market, giving sellers, buyers, landlords and renters a secure and easy-to-use platform to find or list properties online.
Marketing activities should be directed both towards current users as well as future users. Gaining an understanding of how much to tailor to local preferences demands extensive research on both consumer behaviour and demographics. Sometimes not knowing the lay of the land locally can be harmful for the brand. A simple example: In the Philippines, if you were to point your finger, this may be seen as offensive. They don’t typically use gestures. Thinking locally has to be thought of in everything from how you design your homepage to marketing campaigns.
Building a brand that inspires trust
The mindset of people living in emerging markets is naturally different to western mindsets, but this differs from country to country. Building trust is crucial. Online channels provide significant opportunities to build brand awareness, getting a dialogue going with local people. Generating positive word of mouth is very useful, especially in markets where training in business and commerce is essential. It’s clear that emerging markets offer huge opportunities, but without a locally tailored approach, companies hoping to go global are likely to experience an uphill battle.
Paul Phillipp Hermann is Lamudi’s Managing Director.