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Market Analysis

Dan Swinhoe (Global)- The Race For Emerging Markets

In the last few months, we've looked at IT markets in Iraq and Burma, and different aspects of emerging markets in countries such as Brazil and India. It seems wherever you look, there's always talk of the next booming market. Is Uganda the next pearl of Africa? Will Indonesia take over as Asia's gem?

It can be hard to keep up, or make sense of all the talk. But what is certain is that emerging markets are where the money is. Emerging markets offer the potential for great returns with relatively little risk, and IDC predicts that emerging markets will contribute for 53% of this year's ICT growth. But where is all this growth going to come from?

BRICS

Seen as a bastion of growth and saviors of the world at various points through the recent economic woes, the BRICS domination for investment still looks solid. Despite China ‘no longer being an emerging market' according to HP's CEO, Brazil is still a viable option. The South American powerhouse is still growing, especially in the tech sector and its large economy and stability means it's one of the most attractive countries in the world for investors. India too is definitely an emerging market on the up. Obviously it's the home of outsourcing and everything mobility-related is growing rapidly thanks to a tech-savvy Generation-Y. Both have their drawbacks- with limited infrastructure in rural areas and a limited, but growing, skills base.

Africa & Asia

While Uganda has been called ‘one of the most competitive mobile markets in the region,' almost the entirety of the African continent is doing well, and is still a relatively untapped market. With most of the region enjoyable stability, many areas are starting to enjoy increasing levels of mobile devices and internet connections.The continent's biggest challenges remain connecting the rural areas in the same way as the urbanized areas, making services affordable and tackling software piracy and cyber-crime.

Meanwhile in Asia, Indonesia has been tagged as one of the Southeast Asian startup ecosystem to watch, but again the region as a whole has a wealth of opportunities. Parts of the region are far more developed than any in African countries - for example, Singapore and Korea are world leaders in the IT sector, and the whole SEA region is experiencing a boom in both tablet and smartphone sales. But there's a wealth of opportunities in other developing countries; IDC claims there are many opportunities and room for growth in Cambodia, while some predict Vietnam to be one of the biggest IT spenders in the APAC region this year.

Clean Slate

Whereas the BRICS and most of Africa and Asia have some sort of IT sectors already established, countries such as Burma (Myanmar) or Iraq offer what can only be described a blank slate. Years of war or insular governments have left very little in terms of infrastructure, specialist skills or regulation, and often companies are scared to take the plunge into these kinds of environments. However, demand for all kinds of services is high, and although there might inevitably be teething problems, the potential rewards are massive.

Despite relatively steady growth in the Middle East, there are a few reasons the region hasn't been lauded as the next big thing. Problems with financing, strict regulations and difficulties with cyber-security, not to mention the (now calming)political upheaval all overshadow the gains the IT sector has made in the last few years.

There is no right answer for which is really the next big market. Each region has its own pros and cons, and ultimately it's up to prospective investors to decide whether they want to lead the pack into a new market, build on the work others have started in developing nations, or join the pack in places such as Brazil. Ultimately, the best advice that can be offered is to do your research beforehand and make sure you know what you're getting into.

By Dan Swinhoe, Editorial Assistant, IDG Connect

 

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Dan Swinhoe

Dan is a journalist at CSO Online. Previously he was Senior Staff Writer at IDG Connect.

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