Enter Emerging Markets: There Are No Rules

Unlike in the past, emerging markets today are a lot more professional and digital. Newer companies are now given a chance to start without an Indonesian partner. These days you don’t need a local face at the top for your company to thrive as long as you can manage relationships well. For instance, in Indonesia today, Grab and many other foreign companies are doing well because they have adapted.

How then are emerging markets different from developed markets?

Speed and Structure

Developed countries follow structures and rules, making sure everything is in order. Speed is not as important in these developed countries so you have the luxury of planning. In emerging markets, however, it’s completely different. Speed is vital to survival. You have to move quickly, and the rules are not clear. You honestly can’t know for sure if you are following the rules. The emerging market is not bureaucratic like the developed market, it’s more kleptocratic. If you attempt to follow the rules, you can take a long time and may never reach your goal.

To move fast in an emerging market, you have to gamble. Sometimes you have to make big gambles. You make a decision first, and then you figure out how to make it work. My company moved from 0 events to 26 large scale events within 12 months because we had to move fast. You have to be more bold, ambitious and brave.

“The only rule in emerging markets is that there are no rules.”

You need to realise that you can’t sit around and wait. You may not survive in that country for long enough to do that. You have to take risks and have the freedom to make decisions. I’ve seen companies that came to Indonesia and said they would not or could not do certain things because of the head office overseas. The head office for Indonesia has to be Indonesia! You need to have the freedom to make decisions, and make them quickly, or you won’t survive here.

Finally, don’t underestimate the time it takes to set up. Many don’t consider certain delays and other factors involved. People often think that they can easily set up just like they have done in most other countries, but again, there aren’t many rules or guidelines, so you have to figure things out on your own and naturally that takes more time.

In emerging markets, you need to take 4 steps in a month rather than 2 steps even if the steps aren’t significant. You have to keep moving forward.

Aligning With Partners

In developed markets, you can basically try to make it on your own. It’s very democratic and meritocratic. You don’t need support if you don’t want it. In an emerging market, support is not an option. Support is a necessity. You need to align yourself with larger companies and establishments with power. It’s a very unconventional type of support, but it’s integral in emerging markets.

It’s important to not just build surface relationships, but also build strong relationships and partnerships with people who are connected and have some influence and leverage. In India or Indonesia, you will definitely get into trouble because many things are grey and ambiguous. Something will go wrong every day. So, you need someone to support you.

Emerging markets are not democratic or meritocratic, they are filled with biases and run a little like a mafia where there is accumulated power with certain people and organisations that you need to align with.

Building the Right Team

It’s easy to hire the right people in a developed country as you tend to have a lot of people to choose from. That is definitely not the case in emerging markets. Because you have to focus on speed, you need to hire people who you think can be trusted and then train them yourself. You don’t have time to wait around for the perfect candidate. You may never find them. You can’t go for skillset. You need to go for potential and trustworthiness. Surround yourself with people who can be trained and trusted, and these people may not be the most skilled people for the job.

“What you’re looking for in your team is a high willingness.”

You need to teach them and they need to be willing to learn. You can’t always find a superstar immediately. Of course, don’t make horrendous hires but what I'm saying is that on a scale of 1 to 10 in terms of skills, if you have a choice between hiring a 6 or 7 earlier, it’s better than hiring an 8 or 9 later. Don’t hire anyone lower than 5.

Additionally, you’ll also have to use consultants and freelancers more as you move faster. Sometimes a specific skill may be hard to train, and the person just doesn’t exist here, so you move to the freelance market for this. Don’t feel bad about bringing people from elsewhere. Import talent where you need to.

As your company grows, learn to train and delegate. Look at your calendar today and decide if you really need to be at a certain meeting. Where possible, try to send your team alone to 80% of your meetings. Your role is to start the relationship but then manage from the back, not the frontlines. Send your team to discuss, and once in a while, you can make your grand appearance.

In developed countries, you would think twice before you send someone who is underqualified. In emerging markets, it doesn’t impact the meeting. Prepare your staff but leave them to run with it. Give your staff one to one training for at least half an hour and check in every one to two days. Your training doesn’t need to be structured but be sure you train them enough for them to handle the responsibility. Be sure to keep briefing them and keeping them up to date. Most importantly, build loyalty with your team. Be their friend and help them where you can.

As you can tell, emerging markets are all about people. So, in the next chapter, I’ll give you more practical ways of building such relationships.

Emerging markets almost demand for you to work with people well. So how then can you practically build the right relationships?

Connect with Locals

Connecting with locals is really important in emerging markets. My company in Indonesia has Indonesians in senior positions. Even if you don’t hire locals, you have to be friendly and like them. You need to do business with them and show them that you are here for a long time. Show them that like themselves you are a fellow Bhumi Putra, son of the soil. If you are going to leave tomorrow, they won’t accept you.

There are two levels of conversations. One level is with the boss and the other is the side level in the local language, where the staff are releasing tension. A relationship between two locals will always be stronger. You as a foreigner may know the local for a decade but if your Indonesian colleague meets them, they already have a stronger bond. So, you need to make sure that you stay connected to them and treat them well.

In emerging markets, published market research is worth nothing. The valuable market research is done informally, from soft communications with the locals. Likewise, when you are figuring out what you want to do, you need to look at the real market size. A lot of the market may not be available to you in reality. There could be exclusivity, certain partnerships, legal monopolies, or other reasons they are not accessible. You need to connect with the locals to find out. For example, you may think that the travel space market is huge but when you speak with a local, you discover that the airline likely won’t partner with you because of certain reasons, and immediately your real market size has dropped significantly.

A mistake most companies make is that they don’t localise. They just bring in their practices, products, services and people from their home country and only localise the content and marketing strategies. That’s part of the reason many international companies don’t succeed in emerging markets.

Respect Generously

You need to respect other people generously, and you can’t really overdo it. If you are partnering with a local in a business deal where you both lose money but you remain respectful and kind, you will likely be able to do business together again. As compared to a scenario where you are both making money but are on bad terms relationship wise – in that scenario you likely won’t do business together again. In an emerging market, it’s about trust and respect. Relationship is prized over business sanity. Once you show arrogance and disrespect, the game is lost forever.

Respect isn’t just shown in speech. It has to be followed up with actions. For instance, you have to be at your clients' wedding, or if they invite you to their children’s wedding, you must attend. If you have some sort of tickets that will be of interest to them, you must give it to them. The business ends if you don’t. This is often overlooked but it’s important that you attend to their ego in that sense. This market is ego driven.

Show You Can be Trusted

You need to get into relationships that are more favourable to your partner than they are to yourself to show that you are willing to put a stick in the ground. When we first entered Indonesia we took risks that we wouldn’t take today. The first deal we did was with a big media company, on their terms. They want to see that you are willing to take that risk. Otherwise, they don’t trust you. Once they trust you, they work with you by default.

You need to be putting yourself out there, meeting a lot of people and creating a lot of noise. Go out of the way to understand relationship building, and the culture here. Spend time meeting your partners and invest time in building relationships. This will help build trust and subsequently successful business partnerships.

Think Long-Term

When you’re making your first few deals, you need to think long term. For example, if your bottom line is 40%, you should be willing to go to 50%. Once you’ve shown the quality of your service and they see you as a respectable and trustworthy business partner, you can go back to your original bottom line.

You also need to show them your value so that you don't need to take on such terms in the future. Show them your value by bringing good offerings to them. For example, in my business, in addition to the ticketing service we also provide entertainment acts as we have the necessary relationships with various entertainment houses. When we bring a rare entertainment act to our partners, they see value in us. In this market, at some level, while you are subservient and show a lot of respect, your partner should also know that you can discuss with them as an equal who offers some power and value. You should keep trying to bring in valuable opportunities that only you can bring, so that they need you and want to work together with you for many more years to come.

1. Book a Flight and Line up Meetings

Go on Skyscanner and book a flight to the emerging market you want to enter next. You need to line up meetings with people in the industry, or old friends who are from this market. If you don’t know anyone, then connect with people in different online groups or on LinkedIn and line up meetings from there.

2. Speak to People

When you meet with these people, you need to start surveying the market, seeing how you can enter and what you need in order to enter the market. Find out the true market size, qualities in the market and make some headway first. Plan the questions you want to ask the people you will be meeting.

3. Create a Localised Plan

Create a plan based on your interactions and write out how you plan to localise your existing company or the new company you’re starting. Start mapping out the people you need to be connected to, as well as your hiring plans based on what I've shared with you in this book.