As economists predict slow growth for the U.S. economy over the next few years, companies are turning to emerging markets such as Africa, Brazil, China, India and Russia to grow their business.
This week, Coca-Cola announced that it will be making a $4 billion investment in China over the next three years. Coca-Cola’s sales in China grew 24% in the most recent quarter; in addition, China is Coke’s third largest market. Coke CEO Muhtar Kent stated, “We don’t see China only as a great growth market. We see China as a future market for further innovation that will benefit our business globally.”
Proctor & Gamble is also looking to emerging markets including Africa, Brazil and India to grow its business. This year, Proctor & Gamble plans to enter Brazil with products like Oral B toothpaste and Olay skin cream. According to the Wall Street Journal, “In Brazil, P&G employees pore over maps that document demographic trends and pinpoint stores that don’t yet sell the company’s products.”
Pepsi has taken the strategy of growing its business internationally through acquisitions. In April 2011, Pepsi announced it was purchasing dairy products and fruit-juice maker OAO Wimm-Bill-Dann for $5.4 billion. The acquisition makes Russia the largest market for Pepsi outside of the United States.
Even ad agencies are capitalizing on emerging markets. Ogilvy & Mather launched a division in its New York City office to help Chinese companies with marketing and public relations in the United States. Ogilvy has plans over the next few years to expand this service to Africa, Brazil and India.
If it is right for their business model, U.S. companies should strongly consider growing their business internationally as a way to balance the slow growth predicted for the domestic economy.
Ed Samide is a Senior Account Manager at Domus, Inc., a marketing communications agency based in Philadelphia. For more information, visit http://www.domusinc.com. For new business inquiries, please contact CEO and founder of Domus, Inc. Betty Tuppeny at email@example.com or 215-772-2805.