Building for Billions: Product Management Strategies for Emerging Markets

Emerging markets (EMs) are becoming key drivers of global economic growth, attracting significant investments from multinational corporations (MNCs). However, traditional marketing strategies developed for mature economies are often ineffective in these markets.

What is an Emerging Market?

An emerging market (EM) refers to a country undergoing rapid economic expansion, industrialization, and greater integration into the global economy. While there is no single definition, emerging markets are typically characterized by distinct features that set them apart from both developed and less developed economies.

Key Characteristics of Emerging Markets

1. Rapid Economic Growth: Emerging markets often exhibit GDP growth rates significantly higher than the global average, frequently surpassing 5% annually.
2. Shift Toward Industrialization: These economies are transitioning from agriculture-based systems to more diversified economies focused on manufacturing and services.
3. Market Liberalization: They implement economic and regulatory reforms to encourage free markets, attract foreign investment, and integrate into global trade systems.
4. Growing Middle Class: Rising incomes and improved living standards are expanding the middle class, driving higher consumer spending and demand for goods and services.
5. Attractive Investment Opportunities: Emerging markets offer high growth potential, making them appealing destinations for foreign direct investment (FDI) and venture capital.
6. Market Volatility: These markets are often more susceptible to political instability, currency fluctuations, and regulatory changes, which can create risks for investors.
7. Infrastructure Challenges: Compared to developed markets, emerging economies typically have less advanced financial, technological, and logistical systems.

Examples of Emerging Markets

• BRICS Nations: Brazil, Russia, India, China, and South Africa.
• MINT Countries: Mexico, Indonesia, Nigeria, and Turkey.
• Others: Vietnam, Thailand, Philippines, Argentina, Poland, and more.

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?Why Emerging Markets Matter

1. Global Growth Engines: Emerging markets are significant contributors to global GDP growth, driving economic activity worldwide.
2. Untapped Consumer Potential: Their large populations and rising disposable incomes create vast opportunities for businesses.
3. Innovation and Experimentation: These markets serve as testing grounds for new business models, technologies, and strategies.
4. Investment Hotspots: Their high growth potential and untapped opportunities attract substantial foreign investment, offering the possibility of higher returns.

Emerging markets play a critical role in shaping the global economy, offering both opportunities and challenges for businesses, investors, and policymakers. Their dynamic nature makes them key players in the future of global economic development.

Why do Emerging Markets Matter for Product Managers?

Emerging markets are not just expansion opportunities for multinational corporations—they are innovation hubs and growth engines for modern businesses. As a Product Manager, understanding these dynamic environments is crucial to building products that scale globally.

In this article, I’ll share my perspective on product management strategies for developing, launching, and scaling products in emerging markets, drawing insights from global companies and my own experiences.

Understanding Emerging Market Users: Beyond Affordability

A common misconception is that emerging markets are solely driven by the need for low-cost solutions. However, the reality is far more nuanced. Consumers in these markets exhibit unique behaviors and preferences:

1. Value-Conscious, Not Just Price-Sensitive: While affordability is important, consumers prioritize quality and reliability alongside cost. They seek products that offer long-term value rather than just being cheap.
2. Tech-Savvy Early Adopters: Emerging markets are often at the forefront of technological adoption. High mobile penetration and the widespread use of digital wallets in regions like India and Africa highlight their readiness to embrace innovation.
3. Culturally Diverse: A "one-size-fits-all" approach fails in these markets. Deep localization—tailoring products to align with cultural, social, and regional preferences—is essential for success.

?? Product Strategy Tip: To truly understand and cater to emerging market users, invest in?in-depth user research,?on-the-ground interviews, and?ethnographic studies. These methods provide insights into real needs and behaviors, enabling the creation of products that resonate with local consumers.

The Mobile-First & AI-Driven Future of Emerging Markets

Emerging markets have taken a unique path to digital transformation, bypassing traditional desktop-based systems and leapfrogging directly into mobile and AI-driven solutions. This shift has created distinct opportunities and challenges:

1. Dominance of Super Apps: Platforms like?WeChat (China)?and?Paytm (India)?have become central to daily life by integrating multiple services—payments, messaging, shopping, and more—into a single, seamless app. These super apps cater to the need for convenience and efficiency in fast-paced, mobile-centric environments.
2. AI-Powered Customer Service: To address the challenges of scale and accessibility, emerging markets are adopting AI-driven solutions. Chatbots and virtual assistants, often operating in local languages, are replacing traditional call centers, offering faster and more efficient customer support.

?? Product Development Tip: When building for emerging markets, adopt a?mobile-first and AI-enabled approach. Design lightweight, intuitive experiences optimized for low bandwidth and affordable devices. Leverage AI to scale operations, personalize interactions, and overcome resource constraints. This strategy ensures your product is both accessible and impactful in these dynamic markets.

Localizing Your Product: Beyond Translation

Many global products struggle in emerging markets because they fail to adapt to local realities. Success in these markets requires more than just translating content—it demands a deep understanding of regional preferences, behaviors, and infrastructure. Here’s how to get it right:

1. Payments: Local payment systems are critical. For example,?UPI in India?and?M-Pesa in Kenya?dominate their markets. Relying solely on credit card-based models will limit your reach and usability.
2. Infrastructure Limitations: Inconsistent internet access is a common challenge. Design products with?offline functionality?to ensure usability even when connectivity is unreliable.
3. Pricing & Monetization: While subscription models thrive in developed markets like the U.S., emerging markets often prefer?pay-as-you-go?or micro-payment options, which align better with local income patterns and spending habits.

?? Global PM Skill: Collaborate closely with?local partners?to customize pricing, user experience (UX), and marketing strategies for each market. This localized approach ensures your product resonates with users and addresses their unique needs effectively.

Scaling Your Product in Emerging Markets: Challenges & Solutions

Expanding into emerging markets presents unique operational hurdles that require tailored strategies. Here are the key challenges and actionable solutions to overcome them:

Challenges:

1. Unstructured Supply Chains: Logistics and distribution networks are often fragmented and inefficient.
2. Complex Regulatory Landscapes: Navigating local laws and compliance requirements can be daunting.
3. Counterfeit Products & Trust Issues: Building consumer trust is critical in markets where counterfeit goods are prevalent.

Solutions:

1. Build Trust Through Local Partnerships: Collaborate with local businesses and engage with regulators to establish credibility and navigate compliance.
2. Decentralized Distribution Models: Leverage existing networks, such as?kirana stores (small local shops) in India, to reach consumers effectively.
3. Alternative Financing Options: Embrace innovative payment solutions like?Buy Now, Pay Later (BNPL), which are gaining traction in emerging markets.

?? Growth Strategy Tip: Adopt an?agile, iterative approach?to scaling. Start with?city-specific pilots?to test and refine your product before rolling it out on a larger scale. This minimizes risks and ensures a smoother expansion.

Critical areas where MNCs need to rethink their strategies

1. Timing of Market Entry

EMs present both risks and rewards for early entrants.

First-mover advantages include government relations, pent-up demand, lower marketing costs, and the ability to shape regulations.

Companies must balance risk with the long-term benefits of establishing an early presence.

2. Market Assessment Framework

Traditional models based on macroeconomic indicators are inadequate for EMs.

A new, demand-driven approach is needed, focusing on long-term potential rather than short-term risks.

Companies should assess factors like population growth, purchasing power parity, and urbanization to gauge market viability.

3. Product Policy Adaptation

The standard global product life cycle does not apply uniformly to EMs.

Consumers in EMs are often familiar with advanced products due to globalization, media exposure, and travel.

Companies should adopt a multi-tier product strategy—offering global brands alongside localized or value-engineered products to cater to diverse consumer segments.

EMs can also serve as innovation hubs, where companies experiment with new product offerings.

4. Partner and Distribution Strategies

Many MNCs rely on local partners for market entry, but traditional distribution models often fail in EMs.

Effective distribution strategies include direct selling, flexible partnerships, and alternative retail models (e.g., street vendors and informal sales channels).

Companies should consider using multiple partners instead of exclusive distributors to accelerate market penetration.

Digital channels and e-commerce are growing in importance, especially for B2B markets.

MNCs must rethink their marketing strategies to succeed in EMs. A deeper understanding of local conditions, innovative market assessment, flexible product policies, and adaptive distribution strategies are essential for long-term success. Instead of treating EMs as “less developed” versions of existing markets, companies should leverage their unique characteristics for competitive advantage.

Global Giants in India: How MNCs Are Adapting to Thrive in a Dynamic Market

Multinational corporations (MNCs) have increasingly recognized the importance of adapting their strategies to succeed in India's unique and diverse market. Here are some recent examples:

1.?Carrefour's Re-Entry into India After exiting the Indian market in 2014 due to underperformance, French retail giant Carrefour announced a strategic re-entry in September 2024. This time, Carrefour is partnering with Dubai-based Apparel Group to establish a presence in North India, with plans to open the first stores in 2025 and expand nationwide thereafter. This partnership aims to leverage Apparel Group's regional expertise to navigate India's complex retail landscape.

2.?BlackRock's Partnership with Jio Financial Services Global investment firm BlackRock has formed a joint venture with Mukesh Ambani's Jio Financial Services to tap into India's burgeoning financial market. This move comes after BlackRock's previous exit from an Indian venture due to control issues. By partnering with a prominent local entity, BlackRock aims to navigate India's intricate federal political system and diverse market more effectively.

3.?Volkswagen's Localization Strategy German automaker Volkswagen entered the Indian market in 2007 and established a manufacturing hub in Pune. Recognizing the need for localization, Volkswagen tailored models like the Polo and Vento to suit Indian consumers' preferences. This approach included adapting designs and features to meet local tastes and investing heavily in local production to minimize costs while maintaining quality.

4.?Amazon's 'Cash on Delivery' Model When Amazon launched in India in 2013, it introduced the 'cash on delivery' payment method to cater to the country's cash-driven economy. This adaptation addressed the low prevalence of online transactions at the time and was instrumental in Amazon's rapid growth in the Indian e-commerce market. Additionally, Amazon partnered with local delivery companies like Blue Dart and India Post to enhance its distribution network.

5.?Unilever's Sustainable Innovation Unilever has demonstrated a commitment to sustainable innovation in India by launching products tailored to local needs. For instance, the company introduced a low-cost water purifier that does not require electricity, addressing the challenges faced by populations without access to clean water or reliable power sources. This initiative not only meets a critical need but also strengthens Unilever's market position in India.

These examples illustrate how MNCs are successfully adapting their strategies to align with India's unique market dynamics, consumer preferences, and infrastructural challenges.

As a Product Manager, mastering emerging markets isn’t just an expansion strategy—it’s a competitive advantage.

• These markets drive innovation (think mobile payments and AI-first customer service).
• They offer rapid growth opportunities for companies willing to localize and adapt.
• They challenge us to build better, more inclusive products that work for billions.

References:

1. MIT: New Strategies in Emerging Market – SLOAN Management Review
2. Dr. SUSHIL KUMAR – IIM V (PG Certificate Program in Product Management)
3. advizeone.com
4. inventiva.co.in
5. support.taxaj.com
6. reuters.com
7. reuters.com

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What do you think? Share your insights in the comments.