Be one of the locals
The main risks regarding business in emerging markets are connected to the differences in business culture and the investments needed to build a good foundation for your business to grow. From our experience we can see that a crucial factor to be aware of is the need for physical presence. This may be through setting up your own organisation, but could also be through a network of distributors.
Solely exporting goods from Sweden is most often not enough to build the customer relationships needed to bring the sales growth you are looking for. To build lasting relationships you must connect with your customers and be local.
How to succeed
- Understand your customers and confirm the market potential before choosing your go-to-market strategy.
- Show commitment to clients and suppliers through local presence.
- Recruit people and/or distributors with the right set of skills to succeed in the region.
- Understand differences in business culture and ways of doing business.
Example: Mexico’s reforms bring business opportunities
A good example is Mexico, where structural reforms have been implemented to liberalize and open up to external competition in historically closed sectors such as energy and telecom. This has created new possibilities for foreign investments and broadened the number of actors. Unsurprisingly, Swedish exports to Mexico have enjoyed an upswing, increasing by 9% within only a year. So far, automotive, energy, ICT, healthcare industries and the fin-tech sector have had great success.
Being the most diversified economy in the region, Mexico is undergoing a period of expansion. Mexico is expected to be the world’s 5th largest economy by the year 2050.
Swedish companies with presence in Mexico are very successful and 50 of these companies employ over 60,000 people, making up almost 4% of their total global workforce. Most Swedish companies in the country have increased their market share significantly over the last couple of years. Almost all of them have expansion plans and 70% plan to increase the number of employees.
Swedish companies have a great deal to offer the burgeoning Mexican market, not least in terms of technologically innovative, smart and sustainable solutions that advance and improve quality of life for millions.
Early birds win
Today, the main part of Swedish exports goes to mature markets, but the key to the future lies in emerging markets. It is crucial to get there early to win competitive advantages. Swedish companies have much to offer, with high-quality products and services as well as a leading sustainability focus. There is as good match between the needs of the emerging markets and what Swedish companies can bring to the table. This is not a time to stand back and watch others pave the way, but one when we need to move ahead with confidence and winning strategies.
Business Sweden offers support and advice
At Business Sweden we see immense opportunities in generating strengthening promising business relationships between Sweden and emerging markets in Latin America, Asia, Africa and the Middle East. We are committed to ensure that Swedish businesses fully can respond to these opportunities and we can help you navigate this new map with thriving markets full of untapped potential.