What Are the Main Characteristics of ‘Emerging Markets’?

1224 words 5 pages
What are the main characteristics of ‘emerging markets’?

Introduction
During the changing of world economy, it is increasingly common to hear the term ‘emerging markets’ and from news and report. In the mid-1980s, the term ‘emerging markets’ was created by the World Bank, and has significant influence on the global business world nowadays (Gwynne, Klak and Shaw 2003). To raise investor’s attention to those developing countries, there are numerous characteristics springing up which are given by researches and economists. However, some of those characteristics are contradictory and it is difficult to give a real definition. This essay discusses the main characteristics of ‘emerging markets’ as defined by the World Bank and economists.
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Markets and culture are demanding; 2. There are high rates of emigration to the developed world; 3. Markets are fragmented; 4. Populations are youthful and growing; 5. There is limited income and space; 6. Infrastructure is weak; 7. Technology is underdeveloped; 8. Distribution channels are weak; 9. Markets are changing rapidly (2005, pp. 19-26);

According to the characteristics they give of emerging markets, local economic environment, infrastructure including technology level and social phenomena need to be considered. Those countries shifting rapidly but still have an extreme gap of income level and consuming level between developed countries. The distribution system in those countries is weak especially in some non-core area, with lack of media, roadways, and electricity (Mahajan and Banga 2005). ‘But in the midst of these challenges, tremendous opportunities exist, in both the segments of the market that already have comfortable incomes and the segments that are still aspiring to rise from poverty’ (Mahajan and Banga 2005: 28). The characteristics of ‘emerging markets’ are not only challenging but have opportunities through working with local organization and company and addressing urgent needs to local government while profiting from those countries.

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