Entering emerging markets presents both challenges and opportunities for shippers across all industries. For technology supply chains already fighting to stay ahead of accelerating product lifecycles and shrinking margins, the challenges can be even greater—but so can the rewards.
With the right logistics technology, processes, and strategy in place, technology supply chain managers can increase their chances of success. Here are a few core considerations to account for before diving into a new market.
Demand can be unpredictable, so flexibility and responsiveness are essential
For some technology companies, breaking into a new market can be a pivotal step in their growth. For others, it can be a costly misstep that they struggle to recover from. That’s often because it’s very difficult to predict if the demand for technology products seen in one region will carry over to another, especially if the circumstances between countries are very different.
Take internet-connected devices. While internet usage is increasing in emerging economies, there are outliers, such as India, where only 38% of people reported using the internet in 2020. In markets like this, there could be a real appetite for your product among populations that have felt underserved—but there are no guarantees.
Since demand is almost impossible to forecast when a market is untested, shippers must closely monitor their data in real-time and use it to inform their strategy as they go. Flexibility and agility are critical. In the short term, this requires an ability to scale capacity at a moment’s notice if the demand is there. In the long term, shippers must think carefully about factors like where to build distribution centers and which carriers to make long-term partnerships with since demand may contract even after an initial boom.
Geographies and infrastructure can vary, so shipment planning can be challenging
The geography and infrastructure in emerging markets can vary dramatically from one country or even one city to the next. While some locations are undergoing rapid urbanization, others remain largely rural, with populations often dispersed over large areas. Even in urban settings, problems like congestion can make it harder to move goods within the desired timeframe.
This makes it critical for shippers to have a transportation management system (TMS) that streamlines complicated shipment planning—like finding low-cost, reliable carriers that are able to serve remote locales. They also need to account for challenges that might slow deliveries down to ensure they’re setting the right expectations for clients—not over-promising and under-delivering.
Rules and regulations can be complex, so getting ahead of the game is a wise move
Entering any market requires a business to familiarize itself with relevant tax laws, sanctions, embargoes, and other regulatory concerns. These risks can be especially challenging and complex to navigate in emerging markets where the rules aren’t always clear.
As such, it’s a good idea for technology supply chain managers to prioritize compliance very early on in the strategy process, rather than scrambling to catch up later and leaving the business vulnerable to fines, reputational damage, and other risks. Partnering with an outsourced provider with deep expertise in the area is often the easiest and most cost-effective way to minimize risk and ensure a smooth entry into the market.
Leading solutions for technology supply chains
At CTSI-Global, we’ve helped many technology companies embrace all the opportunities that new markets can offer. Our global expertise and cutting-edge logistics solutions make it easier to manage technology supply chains effectively—at home and abroad.
Grow your reach—and your profits. Contact us today.