FedEx: Catch emerging markets

Raj Subramaniam, executive vice president, global strategy, at the American global courier delivery services company, claimed that emerging markets such as the MINT (Mexico, Indonesia, Nigeria, Turkey) or CIVETS – Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa – offered huge potential. 

“Either way, for anyone engaged in international business, CIVETS and MINT are both increasingly short-hand for taking the long view. Rich with possibilities, these young, vibrant new economies are just starting to flex their muscles, but by 2050 they are projected to make up many of the top 20 contributors to global GDP,” Subramaniam said at a recent FedEx roundtable in Memphis on exploring dynamic newcomers of the global economy.

“It is fascinating to scout the potential of these new markets, especially for someone like me who has worked across a number of regions with FedEx. I am curious and interested as to which direction these new markets will move,” he added.

July 2013’s HSBC Global Connections Report said Vietnam and Indonesia were leading growth in intra-Asia regional trade. Vietnam and Indonesia typify the strength that nearly all MINT and CIVETS countries share: proximity to a huge market full of potential buyers, abundant natural resources and commodities to sell, as well as a young and increasingly well-educated population that is eager to work, and has money to spend. They are also better connected – both physically and virtually – to the world market.

Subramaniam noted that emerging economies were the principal drivers of today’s growth in global internet take-up. For example, internet usage in Nigeria and Vietnam grew from 200,000 users in 2000 to over 48 million and 31 million users, respectively, in 2012. “This kind of change is opening up an abundance of opportunity, providing access to information and a vehicle for commerce. It is allowing businesses of all sizes – from established multi-nationals to budding entrepreneurs – to enter and participate in the world marketplace.”

FedEx’s global strategy includes its continual investments in new economies. It was the first express carrier to enter the Chinese market in 1984. In 2007, FedEx became a wholly foreign-owned enterprise and launched the domestic services in China. Most recently, FedEx commenced operations at its new North Pacific regional hub, located in Osaka, Japan. The hub will allow customers within Asia Pacific, including the likes of Indonesia and Vietnam, to benefit from faster and more reliable access to regional and global trade opportunities.

According to the US Commercial Service, 95 per cent of the world’s consumers live outside of the country. “That fact, plus the slow growth of traditional economic powerhouses and increased global connectivity, means newly emerging markets have greater access, and new opportunities to grab the torch for their leg of the race for economic prosperity,” said Subramaniam.