Psst… care for a zero-rupee note?

Concern over corruption has surged in India in recent months. Although corruption is nothing new to most Indians, a series of recent high-profile scandals have been particularly galling. These include a multi-billion dollar alleged telecoms scam, alleged financial malpractices in connection with the 2010 Commonwealth Games in Delhi, and allegations that funding of houses for war widows was diverted to civil servants.

Anna Hazare, an influential social activist, has launched a hunger strike to urge the government to pass a new law that would create an anti-corruption ombudsman. Meanwhile, 5th Pillar, an NGO, has been advancing a campaign to publicize the fight against corruption by distributing “zero rupee” notes, which are graced with the portrait of Mahatma Ghandi and resemble 1,000-rupee notes. The idea is that people or businesses can offer zero-rupee notes when solicited for bribes by local officials.

(As an aside, a friend and colleague has produced a short film which shows the zero-rupee note concept in action. It’s well worth viewing and you can find it on Youtube).

Will the anti-corruption efforts in India bring about change? If so, will change require a few years, or a few generations? Or is corruption so endemic that fighting it is counterproductive? Perhaps the best approach is to simply manage how it happens?

These are tough questions to answer, but I will offer a few suggestions, based on analysis of 10 years of data from Transparency International’s Corruption Perceptions Index (CPI).

The CPI is an amalgamation of annual surveys that ask local academics and businesspeople around the world how they feel about corruption in their countries. The surveys are comprehensive, addressing everything from petty street corruption to shadowy campaign-finance practices. Transparency International aggregates the survey data and ultimately grades countries on a score of 1 to 10, with “10” implying the least corruption.

Given the dramatic economic growth of emerging markets over the last 10 years, one might expect to see a decline in corruption in many countries. As countries become richer, they should be able to pay better salaries to officials, thereby reducing the need for extra-legal income (i.e., bribes). Also, it stands to reason that high-growth countries would owe some of their growth to achievement of greater transparency in their economies. 

The data suggests this is true… except when it is not. Some countries have indeed become less corrupt (India is one of them, improving from 2.7 in 2001 to 3.3. in 2010). But corruption has worsened in many countries. And in others, there has been little change. Among these is China, which was graded at 3.3 in both 2001 and 2010.

Below is a chart showing the CPI scores over the last five years for ~30 of the largest emerging markets (I’ve also thrown in a few “developed” countries for comparison. These are highlighted in yellow). Also, the four “BRICs” are highlighted in blue.

The table shows only a few emerging markets figure among the transparency elite (congratulations to Chile and Qatar). The data also contain indications of which countries are becoming more or less corrupt (or neither). These numbers are very helpful for thinking about the future development of emerging markets. If a country is not improving its transparency, it will have more difficultly maintaining steady growth.

In my next post, I will review some of the key trends I observe in each of the emerging market regions (Eastern Europe, Africa, South Asia, East Asia, Latin America). The findings are interesting, suggesting different trends within countries in the same region. Some countries appear headed in different directions. The data also helps understand why some countries have responded better (or worse) to recent shocks such as the global recession of 2008-09 and the wave of uprisings in the Middle East.

Written by David Gates for Emerging Markets Blog

Posted in Africa, Asia-Pacific, Europe, Latin America, Market Analysis, Middle East, South Asia | Tagged , , , , | 4 Comments

Can you say “Groupon” in Spanish?

Recently, I was thinking about whether Groupon’s virtual coupon sales model might offer a way to boost e-commerce in growth in emering markets. Unlike traditional e-commerce business models, which mostly help people by products online, and which depend on credit cards, strong logistics infrastructure, and efficient postal systems, Groupon simply uses the online channel to generate coupons to be used in real-world interactions. So,  can Groupon’s model bypass traditional emerging-market e-commerce barriers? 

First, some background on Groupon. The Chicago-based pioneer of online “daily deal” coupons surprised many when it turned down Google’s $6 billion bid to acquire it in December of last year. However, the refusal to cash in increasingly looks like a no-brainer. On April 15, the Wall Street Journal reported the company expects its upcoming initial public offering (IPO) to generate a market valuation of $15-20 billion.

Groupon’s spectacular growth probably accounts for the sky-high valuation. Between 2009 and the end of 2010, Groupon grew from 120 to 4,000 employees, expanding from 30 to 565 cities, and multiplying annual sales from $33 million to $760 million.

Groupon’s success owes to the way it has turned an old, stale form of advertising – coupons – into something exciting and lucrative. Groupon’s members sign up to receive coupons by e-mail each day from local firms, which range from Mexican restaurants to, yes, water bikes. Groupon’s twist is to set the coupons to expire after just a few hours. It also cancels coupons that do not attract a minimum number of buyers. Although this rarely happens, it induces buyers to spread the word among friends, boosting coupon uptake and word-of-mouth about the advertiser. In exchange for this attention, Groupon demands steep commissions – typically 50% of the total “savings” from all sold coupons.

Much of the optimism for Groupon’s valuation may tie to its growth prospects in international markets, including emerging markets. For example, Groupon is growing in China through a partnership with Tencent, China’s biggest internet company.

China is one of the few emerging markets where a large portion of the population uses e-commerce. In most emerging markets, however, e-commerce use remains low. The table below (using 2010 data from IDC and other country sources) shows how e-commerce accounts for about 1.5% of GDP in countries such as the US, UK, and Australia (and 0.9% in China), but barely registers in key markets such as Mexico and Russia.


The failure of e-commerce in emerging markets owes to several factors:

  1. E-commerce depends on efficient postal systems and advanced private logistics networks to quickly and accurately deliver products to customers. However, postal systems range from nonexistent to unreliable in most emerging markets.
  2. E-commerce depends on digital forms of payment. These can be credit cards, debit cards, or direct debit, though there is flexibility for other models. For example, Germans often pay per rechung (with invoice). Essentially, the retailer emails the buyer an invoice after the purchase. This means Germans technically “buy now, pay later” for e-commerce, although the invoices are usually paid within 30 days.
  3. E-commerce depends on the culture’s comfort with remote payments. This is more subjective, but it is important. Long before e-commerce emerged in the 1990s, Americans had become used to buying products remotely from catalogs, infomercials, and the like. The Internet was simply a new (and better) sales window.

Most emerging markets have failed to meet any of the three criteria. Postal and logistics systems are underdeveloped, people use cash, and payments are made in person.

Herein lies the opportunity of Groupon’s model in emerging markets. Virtual coupons are digital receipts, not products, so they do not depend on postal or logistics infrastructure. The key hurdle is that, like any form of e-commerce, they depend on some form of digital payments, and for a remote payment for something in the future.

Virtual coupons could become viable in emerging markets if people can buy them using prepaid mobile phone cards, as this is the one form of digital payment most people have access to. As long as coupon values stay relatively low (under $10) prepaid cards would be perfectly usable. Groupon (or its imitators) could partner with local wireless carriers to enable people to use prepaid top-up cards to buy the coupons. 

Such a partnership might deliver the coupons via simple (possibly SMS-based) phone applications. (This would bypass the need for PCs, which many people do not own). The service might be fulfilled by providing coupon buyers with SMS codes to show merchants. (This would allow customers to skip the requirement of printing the coupons).

Of course, successful execution of the virtual coupons model in emerging markets will depend how well Groupon or its imitators address other considerations, including types of coupons, marketing to merchants, and word-of-mouth generation to customers.

The table above provides some indication of how the virtual coupons model might change to suit needs of emerging markets. Target consumers might need to include heads of households, as these are the ones who control the purse strings. Coupons might need to concentrate more on addressing functional needs. Many of Groupon’s advertisers pitch purely luxury services, and people in emerging markets have less room in their budgets for optional expenses, such as (you guessed it) water bikes.

Advertising may be more labor-intensive, at least initially, as word-of-mouth won’t work everywhere. Finally, as pointed out by Ari Lightman, a former colleague and now professor of Digital Media at CMU, emerging market merchants may not be willing to pay 50% commissions. This is particularly true if they have to deal with smaller addressable markets and sell more functional goods and services, where profit margins are already low.

All this suggests virtual coupons may be more complex and less profitable in emerging markets. However, the concept is feasible. While the opportunity for emerging market e-commerce sites remains limited, I believe we’ll see more virtual coupon plays.

Written by David Gates for Emerging Markets Blog

Posted in Business Strategy, Uncategorized | Tagged , , , , , , | 1 Comment

Frugal innovation meets clean energy


A new deal may help India’s Tata Group pull off its biggest innovation yet. You may already be familiar with the Tata Nano, a $2,000 automobile designed to compete with motorcycles as a means of affordable motorized transportation for lower-income families. It’s possible you have also heard of the Tata Swachch (Hindi for “clean) – a $21 water purifier that does not require electricity and whose filters last over 200 days.  

Now, Tata Group chairman Ratan Tata has signed a deal with MIT startup SunCatalytix to commercialize new research that may produce cheap power from water.

SunCatalytix attracted Tata’s attention because it found a way to generate electric power from a jar of water. Nocera and his team had a theory that they could mimic photosynthesis – the way plants generate energy from the sun – by using simple and affordable materials. Only 45 days ago, they validated their hypothesis by inserting an artificial cobalt- and phosphate-coated silicon leaf into a jar of water. This created a chemical reaction that generated energy by splitting hydrogen from water.

Nocera’s research is still in preliminary stages. By next year, he expects just 1.5 bottles of water to generate enough energy to power a small house. The technology also accepts wastewater, a critical feature for people living in areas where fresh water is scarce.  

As he did with the Nano and Swachch, Tata hopes Nocera’s solution will continue the group’s effort to serve the “bottom of the pyramid” in India and other emerging markets, and turn a profit while doing so, a Tata executive told the Hindustan Times.

Sun Catalytix’s technology may become yet another compelling example of frugal innovation (which I’ve talked about here, and here) with Indian impetus. Frugal innovation is about re-designing consumer products to be significantly cheaper and therefore within the budgets of the billions of people in emerging markets who have some money but are not yet middle class. The difference with Sun Catalytix’s technology is that it may also be attractive to Westerners, especially if energy prices keep going up.

I’ll certainly be pay attention to what happens. Placing a bucket of water on my balcony sure sounds a lot better than investing $10,000 in rooftop solar panels!

Written by David Gates for Emerging Markets Blog

Posted in Business Strategy, South Asia | Tagged , , , | 1 Comment

Obama’s surprise stop: El Salvador

President Obama’s Latin American tour is taking him to Brazil, Chile, and El Salvador. The first two destinations do not surprise. Brazil is Latin America’s largest economy (and the seventh-largest globally). Chile is Latin America’s most developed country, setting the regional bar for per capita income, poverty reduction, and Human Development.

El Salvador stands out as the tour’s third stop. It lacks Brazil’s size or Chile’s reputation. However, El Salvador has been a disciple of Chile’s free-market model. In the aftermath of a devastating civil war, Salvadoran governments rebuilt the country in the 1990s with free-market reforms targeted at opening the economy to foreign investment.

The economic reforms bore fruit in 1996 when El Salvador became the second country in Latin America (after Chile) to receive an investment-grade credit rating (since then, its rating has been downgraded several times, and now is classified as BB- by S&P).

In 2002, I was invited by the government’s investment promotion agency PROESA to tour El Salvador. During my visit I saw call centers, gleaming food processing and pharmaceutical factories, and new shopping centers. Each of these were evidence of the economy’s progress. It seemed El Salvador was firmly positioned on a path of steady development that would allow it to make a decisive break from its violent past.

Unfortunately, El Salvador’s path to development has not been as smooth as Chile’s. The Great Recession of 2008-09 devastated the Salvadoran economy, which is dependent on the US for trade and remittances. The US accounts for 80% of El Salvador’s exports and 33% of its imports (1, 2) and is home to some 2.5 million Salvadorans, who in 2008 repatriated $3.8 billion in earnings to El Salvador (home to 6 million Salvadorans).

Violent crime has surged and now poses a grave threat to the country’s political stability. The Maras (street gangs) initially formed among Salvadoran immigrant groups in California in the 1990s. They have since returned (or have been deported) to El Salvador, where they have focused on drug trafficking, extortion, and kidnapping.

The Maras have helped El Salvador achieve the world’s highest murder rate over the last five years. An average of just under 4,000 people have been murdered annually since 2006. These death totals even compare to those of the civil war of 1979-1992. That 13-year conflict consumed the lives of 75,000 people – a rate of 5,700 deaths per year. The chart below shows the severity of the violence. El Salvador’s murder rate is far above those of other Latin American countries with reputations for violence (sources here).

The good news is the country’s political leaders may pull yet another miracle. Elected in 2009, President Mauricio Funes maintains 70-80% approval ratings. Funes is the first president from the Farabundo Martí National Liberation Front (FMLN), a left-wing political party with origins as a Marxist guerilla force during the civil war.  

Some feared Funes would align El Salvador with Hugo Chavez’s Venezuela. However, Funes has followed the example of Brazil’s former President, Luiz Inacio Lula da Silva. Like da Silva, Funes has maintained pro-market policies while emphasizing anti-poverty programs. His policy achievements include making basic education free, providing poor children with school uniforms and shoes, and expanding public health programs.

The president has also prioritized combatting the violence, by deploying the army to participate in street policing. The murder rate dipped by 9% in 2009. However, a series of recent arrests are providing evidence that the local gangs are now partnering with Mexico’s powerful drug cartels, including the Zetas and the Sinaloa cartel. 

El Salvador is too small to win a battle of arms against the cartels. It lacks the population and tax base of Colombia or Mexico to fund a major anti-gang war. Instead, the government’s best long-term option is to create meaningful alternatives for its people.

So, what can El Salvador do? I offer three suggestions. First, continue with pro-business reforms. El Salvador still ranks 86th in the world in the World Bank’s Doing Business Index. By comparison, Mexico is 35th and Colombia is 39th. El Salvador should try to move to this range if it is going to be a competitive destination for foreign investment.

Second, use military and police resources to defend property rights. Some 5% of Salvadorans are victims of extortion from the Maras. The government must protect the interests of small and medium businesspeople from these parasitic mafias.

Third, focus on promoting foreign investment in industries that require less capital investment but which employ large numbers of people. Given El Salvador’s violent climate, it will be easier to attract ventures that involve fewer upfront fixed costs. 

One potentially attractive industry is call center services. About 25% of Salvadorans have lived in the US, so the country has a large population of English speakers.

Breaking the cycle of violence and poverty will not be easy, and it’s possible the government may be dragged into an unwinnable war against the gangs. However, further economic reforms do offer a potential pathway out of the current mess.

Written by David Gates for Emerging Markets Blog

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Five reasons to anticipate more BRIC brands

Emerging-market multinationals have become more prominent in the last few years. Last week I reviewed a book that documented the rise of some of these new firms. Business publications, consulting firms, and others also have published reports on the topic.

A lot of this attention is based on anticipation for the future. Currently, only a small percentage of the world’s leading firms are based in emerging markets. 

Consider the share of Fortune magazine’s Top-500 global corporations (by revenue) in the four BRICs (Brazil, Russia, India, China): China has 46 (of the Top 500) firms. India has eight. Brazil has seven. Russia has six. Many of these firms are commodity producers, operating on the traditional comparative advantages of their home countries.

The BRICs (as well as other emerging markets) have a long way to go. Developed countries are home to the vast majority of the world’s largest corporations. Spain (40 million people) has 10 of the Top 500 corporations. Switzerland (8 million people) has 15.

Even more glaring is the near-complete absence of emerging market countries from the world’s top brands. They are home to only three brands in Interbrand’s ranking of the Top 100 Global Brands: Samsung (Korea), Hyundai (Korea), and Corona (Mexico).

I believe emerging-market brands will become more common in future lists. They may follow the example of some foreign-based brands that expanded in the US market in recent years. As recently as the 1990s, US-based companies dominated US clothes and furniture sales. Today, H&M, Zara, and IKEA are well-known brands in the US.

Several factors will drive the rise of global emerging-market brands:

  1. The rapid growth of emerging-market consumer classes will translate into more clout for local consumer brands. Twenty-plus years of strong economic growth in Chile is contributing to the emergence of an increasingly active consumer class. This transformation has fueled the rise of several Chilean retailers, which are now expanding in several other South American countries. Chile’s example will be repeated on a vastly larger scale in other countries, such as China, India, Brazil, and Turkey. 
  2. People are younger in emerging markets. Median ages in the West trend above 35 years, compared to under 30 years (and sometimes 25 years) in emerging markets. The West will be home to an ever smaller share of people in their economic prime (ages 25-49). New brands will rise to serve this demographic shift.
  3. Access to capital for emerging-market firms is easier than ever before. Many developing countries have built functioning capital markets in the last 20 years. Governments are enabling lower interest rates by keeping inflation in check.  Western investors are increasing their capital allocation to emerging markets.
  4. Regional demand patterns exist. The developing world’s regions (East and Southeast Asia, South Asia, Latin America, the Middle East, Sub-Saharan Africa) tend to share some broad commonalities in taste that are not well-addressed by Western multinationals. Korean pop music, Mexican telenovelas, and Nigerian “Nollywood” films have regional appeal. It stands to reason that we will see home-region multinationals emerge in other “taste” industries, including fashion and food products.
  5. Competitive pressures and scarcity of capital will cause some Western multinationals to retrench. If forced to choose between bolstering home operations or expanding in emerging markets, many Western multinationals will opt for the former. US and European telcos bought up most of Latin America’s wireless licenses in the 1990s and early 2000s. By 2007, however, Verizon, BellSouth (now part of AT&T), and Telecom Italia had sold most or all of their Latin American wireless operations, which included Top 3 players in most key markets. 

These and perhaps other factors will fuel the rise of new emerging-market brands in the coming years. It’s probably sooner than later that you’ll find yourself standing next to your (Chinese) car, filling up the fuel tank at the local (Russian) gas station, while en route to the mall to buy that new jacket from your favorite (Brazilian) apparel store.

Written by David Gates for Emerging Markets Blog

Posted in Business Strategy | Tagged , , , | 2 Comments

Have you driven a riquimbili lately?

The riquimbili is one of my all-time favorite innovations. The what, you say?

Developed in Cuba, the riquimbili (pronounced rick-in-billy) is a local term that describes an old bicycle that has been upgraded into a motorcycle. The engine may come from a chain-saw motor and the exhaust pipe from a hollow steel bed frame. If these parts are  not available, no hay problema. Anything from water pumps to electricity generators could potentially suffice. Power boosters from old Soviet tanks are especially attractive. My favorite twist is the fuel tank, which is usually an old water bottle.

The riquimbili was born in Cuba in the 1990s. Cuba’s economy collapsed during this time as trade from the Communist bloc disappeared after the fall of the Soviet Union. Public transportation became less pervasive and frequent due to high fuel costs. However, people still needed to get around. Local mechanics responded to the challenge and developed the riquimbili. The end products were noisy and not very pretty. But they could get 120 miles to the gallon. If there ever was an invention born out of necessity, this was it.

I mention the riquimbili because it highlights the emerging concept of frugal innovation (which I mentioned in my previous post). Frugal innovations are the ones that can address the cost constraints of their intended consumers. This type of innovation is increasingly important for corporations that compete for customers in emerging markets. Westerners are used to buying $20,000 cars, $5 razor blades, and $5,000 braces, but most people in emerging markets cannot be consumers at these price points. 

Frugal innovation implies finding creative ways to cut costs without sacrificing corresponding value. In its survey of emerging market corporations, the Economist highlighed three ways that some companies are reducing costs:

  1. The first is to contract out as many business processes as possible. Indian mobile operator Bharti Airtel has to charge extremely low rates compared to Western carriers because the budgets of most Indian consumers are vastly smaller. Bharti  has contracted out everything but its core business of selling phone calls, handing over network operations to Ericsson, business support operations to IBM, and the management of its transmission towers to a third-party specialist.
  2. A second approach is to use existing technology in imaginative new ways. India’s TCS is looking to use mobile phones to connect television sets to the internet. Since PCs are still relatively rare in India but televisions are ubiquitous, TCS’s solution was to design a box that connects the television to the internet via a mobile phone. 
  3. A third way to cut costs is to apply mass-production techniques in new and unexpected areas such as health care. Devi Shetty, India’s most celebrated heart surgeon, is applying assembly-line principles to heart surgery. His flagship hospital in Bangalore has 1,000 beds, compared to an average of 160 beds in American heart hospitals. The 40 cardiologists at Dr. Shetty’s hospital each specialize on specific parts of the operation. This division of labor allows them to perform 600 operations a week.

Innovating on these principles does not require a $100 million R&D budget (quite the contrary, since the objective is to develop products at lower price points). What is required is a deep knowledge of local consumers and a fair dose of ingenuity.

It may also require a lot of bravery. The most successful frugal innovations might cannibalize the expensive products or services they seek to substitute. Would any US car executive give the green light for a $5,000 car? How many American hospitals would support a process that may cut the revenue from heart surgeries by 50%?

I’m guessing the answers to those questions are No, and Not Many. More likely, it is emerging market corporations that will take the lead with frugal innovation.

Written by David Gates for Emerging Markets Blog

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Is this the Emerging Markets Century?

Book Review: Emerging Markets Century, by Antoine van Agtmael (2007).

The world’s largest corporations are no longer just American, western European, or Japanese. A new breed of multinationals from developing countries is rapidly achieving global presence and prestige. They are also attracting more media attention. For example, this week’s Economist looks at emerging-market corporations in one of its leaders.

One of the best recent analyses of emerging market corporations is a book written by investment manager (and originator of the term “emerging markets”) Antoine van Agtmael. In Emerging Markets Century, van Agtmael seeks to explain the why and the how behind the success of the world’s top emerging market corporations.

The author describes three distinct waves of commercial development in emerging markets since the end of World War II. First, Western corporations made foreign direct investments in plants in developing economies. After a while, local entrepreneurs began to set up their own plants, typically to provide outsourced production to the Western multinationals. Over time, these local businesses acquired more skills and capabilities, gradually moving up the value chain and into ever more competitive markets. Eventually, the best of these firms achieved recognition as top global corporations.

Agtmael profiles 25 emerging market companies in different industries, including:

  • Fourteen high-tech or capital-intensive companies: Samsung (Korea), Hyundai Motor (Korea), Hyundai Heavy (Korea), POSCO (Korea), TSMC (Taiwan) Hon Hai (Taiwan), HTC (Taiwan), Lenovo (China), Infosys (India), Ranbaxy (India), Embraer (Brazil), Tenaris (Argentina), Sasol (South Africa), MISC (Malaysia)
  • Five basic commodity producers: CEMEX (Mexico), CVRD (Brazil), Aracruz (Brazil), Petrobras (Brazil), Reliance (India)
  • Six consumer companies: Yue Yen (Taiwan), Haier (China), Modelo (Mexico), Concha y Toro (Chile), Televisa (Mexico), Telmex/America Movil (Mexico)

The 25 profiles are interesting and informative. Collectively, they yield several valuable insights on the factors behind the success of emerging market corporations:

  • Among the most important success factors were an early commitment to export markets and a relentless focus on superior execution and quality. These two go together: focusing on exports requires producing internationally competitive products, which in turn requires the highest quality. Hyundai Motor’s rise has tracked its determination to succeed in the US market. Hyundai seriously blundered when it first entered the market because its cars were perceived as low-quality. The company rebounded by targeting Toyota as the quality benchmark to beat (while also appealing to consumers by offering the best warranties in the US market).
  • Some companies have become world-class by moving up the value chain. Taiwanese electronics manufacturer Hon Hai began life as a low-value added components manufacturer, but is now a “one-stop-shop” to US clients such as Dell and Apple.
  • Other suppliers became world-class by innovating on supply chains. Mexico’s CEMEX and Argentina’s Tenaris used information technology to offer highly customized order fulfillment and rapid delivery to their customers. Brazilian regional jet manufacturer Embraer turned traditional outsourcing models upside-down by recruiting US, European, and Japanese “partners” to build its planes.
  • Many emerging market players defied prevailing industry perceptions and created new business models. Steel manufacturers were supposed to be located near resource mines, but South Korea’s POSCO set up shop far away from any mines, believing that increased transportation costs would be more than offset by other efficiencies.
  • The world’s leading emerging market companies increasingly recognize the value of branding. Samsung is already a premier global brand. Other companies, such as Lenovo and Haier focused on acquiring trusted Western brands (IBM and Maytag).

These are just some of the most compelling of many insights described in the book. The 25 case studies make Emerging Markets Century a treasure trove of information and a valuable read for international business executives, academics, and investors.  

I have a few minor gripes with the book. Eight of the case studies are from South Korea and Taiwan, which are among the most industrialized and well-educated of the emerging markets. It is questionable how well their experiences apply to other countries.

Meanwhile, there are no Eastern European or Turkish case studies. Nor are there any banks or retailers. This is not for a lack of compelling sources. Brazilian bank Itau, Turkey’s Koc Group, Chilean department store Falabella, Russian foods company Wimm-Bill-Dann, and South African mobile phone group MTN are top-notch companies.

I would also like to have read more on the theme of frugal innovation (which was wonderfully profiled in the Economist in a survey of articles last year). The idea behind frugal innovation is that emerging markets companies will find ways to offer compelling products at the low price points their markets require. The best example is the Tata Nano, a $2,000 automobile that surely would have never been developed in the West.

These are small issues. This is a great book that is well worth your time. I believe many of the themes it identifies will influence the 21st century global corporate landscape.

Written by David Gates for Emerging Markets Blog

Posted in Book Reviews, Business Strategy | Tagged , , , , , , | 1 Comment