Nigeria, India and China are Most Important Emerging Markets for South African Companies

July 15, 2012. According to the findings in M-Brain (formerly GIA)'s Business Perspectives on Emerging Markets 2012-2017 Report (South Africa), South African companies prefer to focus on the African continent when investing in Emerging Markets - 39% picked South Africa while over 50% listed Nigeria as their target markets. Twenty-two percent of the global companies surveyed said that South Africa is also one of their top target markets to 2017, promising more competition from foreign players on South African turf.

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South African companies’ Emerging Markets strategies are primarily driven by the desire to gain a foothold in future large markets, diversify risks, and tap into short to medium-term growth/profit. Thirty-nine percent believe there is a lack of growth/profit in established markets while 28% acknowledge that they have customers and competitors in Emerging Markets.

In April-May 2012, M-Brain (formerly GIA) conducted an online survey amongst business managers at 431 large and mid-sized companies around the world, 18 of which were companies headquartered in South Africa.

Here are some other top line findings:

  • Nigeria, India and China are the three most important Emerging Markets for South African companies to 2017, with South Africa coming in fourth.
  • South African companies’ Emerging Markets strategies are primarily driven by the desire to gain a foothold in future large markets and increase market share. Access to customers is the biggest single Emerging Markets success factor across industries.
  • Most of the secondary Emerging Markets that South African companies plan to target in 2012-2017 are in developing economies. South African companies will choose more Asian countries as their Emerging Markets in the next five years.
  • All the South African companies surveyed said they should have entered Emerging Markets more quickly, and almost 40% said they would have made greater efforts to conduct intelligence/due diligence better.
  • The top industries for Emerging Markets include Chemicals (27% of respondents list South Africa as a destination of choice), followed by Financial Services (18%) and Automotive (19%).
  • South African companies appreciate the value of market intelligence. 94% said that accurate market sizing and growth estimates are critical to their Emerging Markets strategies. However, only 39% use market intelligence to support their decisions regarding Emerging Markets, versus a global average of 55%.

 

About the Business Perspectives for Emerging Markets 2012-2017 Report

In April-May 2012, M-Brain (formerly GIA) conducted an online survey amongst business managers at 431 large and mid-sized companies and organizations worldwide, with questions such as:

  • How do you define Emerging Markets in your company?
  • Which are the top Emerging Markets for your industry over the next five years?
  • What key factors will determine whether foreign companies succeed in Emerging Markets?
  • What are the biggest threats to succeeding in Emerging Markets?
  • What are your company’s main reasons for investing in Emerging Markets?
  • What share of your company’s global revenue do you expect to come from Emerging Markets?
  • Which one aspect of your Emerging Markets strategy would you go back and change if you could?

Industries covered include: Manufacturing & Industrial; Technology, Media & Telecommunications; Professional & Business Services; Financial Services; Consumer & Retail; Pharmaceuticals & Healthcare; Energy, Resources & Environment; Automotive; Chemicals; Logistics & Transportation.

Respondents: Nearly half (42%) of the companies in the survey earned more than $1.3 billion (1 billion Euro) in annual revenue and more than 50% (58%) have more than 1,000 employees. The respondents’ job functions included strategic planning/business development (26%), market/competitive intelligence (23%), senior management (19%), sales and marketing (13%), research and development/product management (9%), among others.

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