The newest emerging markets for American products

By Denise Ferrier

Many major companies’ earnings reports serve as a global map of where U.S. products and brands are making inroads in trade. These new areas of commerce hold the potential for new revenue to make up losses sustained during and after the Great Recession in the markets of the United States and Europe.

The slow global recovery has put greater focus on India, China, Latin America and Hong Kong, where the economies have stayed fairly well insulated from the housing bubble that sent U.S. and European money markets into a tailspin. The current economic resilience in these regions has made them a few of the hot spots for American goods in this new era of trade.

India

Since opening up to the global markets in 1991, the country has seen steady growth with better jobs and more disposable income among its residents. This area’s GDP has grown above 8 percent per year, according to an investment report from Ernst & Young India. The rise of urbanization and technology has made the country ripe for expansion of various American products and fairly well insulated from the global downturn. Familiar U.S. brands such as Starbucks and McDonald’s continue to evolve with their Indian sites. Starbucks CEO Howard Schultz predicts that India will become one of the chain’s top five markets, while McDonald’s is moving toward vegetarian sites in the country. With a demand for cleaner fuel, U.S. investors are looking ahead to the export of liquefied natural gas to the country.

China

While this market certainly is not new, no list of emerging markets is complete without it, given its continued explosive growth that supports nearly all markets in the world. U.S. cities nationwide have seen their exports to China soar. In 28 states, China is the largest recipient of U.S. goods. Computers, food and chemical products are among the most popular items sent to the country. For Starbucks, who already has 700 stores in the country, plans for 1,500 China sites would make the area the chain’s biggest market outside of the United States.

Latin America

While it might lag as a home to millionaires compared with Russia and Hong Kong, all three are ahead of the United States in this area as hot zones of money. Colombia and Brazil both work hard to be investment friendly, and Brazil in particular has been the focus of many U.S. interests as a regional leader in business. Brazil also will be a star on the world stage for the 2014 World Cup and 2016 Olympics, which offer a wealth of marketing potential for businesses and brands. Investing in Mexico has also experienced a resurgence, and the country's buying power for American goods has greatly increased as well.

Hong Kong

This area was among the top 10 of U.S. export markets in 2011 according to the U.S.-China Business Council, and it shows continued robust growth. The country’s gateway access to China ties the two markets together, making it easy for many U.S. manufacturers to cover both areas with targeted shipments. Many U.S. retailers have relied on their shops in Hong Kong to help lift overall store results. Most chains you would see in U.S. malls, such as Forever 21, Abercrombie & Fitch and The Gap, keep a strong presence in the area.

About the author: Denise Ferrier is a freelance business blogger.

* All images US-PDGov or US-PD

How Emerging Markets Differ Economically From Developed Economies

 Developed vs Emerging Market Economies

Image attribution: AlexCovarrubias; public domain

Emerging markets characterize nation-states that are rising out of economic underdevelopment into a market based economy. These markets are still in the earlier phases of the industrial growth cycle in the sense they have large potential for systemic growth as measured by economic statistics. In other words, nation-states are developed to the point of self-sustainable growth but have not reached their full, or near full economic capacity. Economic capacity is the potential of an economy to produce, productively engage a work force, and make efficient use of economic resources in a profitable way. 

Market economy

Emergence from a developing nation to a growing market economy is a key attribute of an emerging market. This distinction between developing nation and emerging market is made by Vladimir Kvint in a Forbes report discussing emerging markets. Specifically, Kvint says a developing country is characterized by a strong need for economic assistance in the form of basic commodities needed to sustain a population whereas emerging markets have developed resources beyond this point. This is echoed in a report from the World Bank and cited by the U.S. Department of Agriculture.

Population demographics

According to Ashoka Mody of the International Monetary Fund (IMF), an emerging market is also characterized by changes in its demographic statistics. For example, Mody suggests an emerging market economy will have telling increases in fertility rates, education and life expectancy. These demographic categories represent advancements in wealth and health care. Additional demographics that may align themselves with emerging markets are higher employment and per capital income.

Economic policy

Since emerging markets are 'emerging' out of either undeveloped statehood or non-market economies, changes to government policy are also likely to be simultaneously indicative of changes to a state's economic status. This characteristic of emerging markets is highlighted by Ashoka Mody  and also  Chuan Li of the University of Iowa Center for International Finance  and Development. According to Li, changes in governance within emerging markets are aimed at transitioning away from overly interventionist policies, and avoiding corruption that can inhibit development of a free market.

Statistical metrics

There are a number of economic statistics that if measured correctly, are characteristic of an emerging market. Some of these statistical metrics include Gross Domestic Product (GDP), trade balance, government spending, tax receipts, and manufacturing activity among several others. These types of statistics are different from demographic statistics because they are representative of an economy and more derivative of demographics which directly measure changes to the population in an emerging market.

So having defined some of the characteristics of emerging markets what are some examples that meet all the above criteria? One place to look is an emerging market index that measures growth across a variety of economic sectors in multiple emerging markets. Moreover, this type of index is designed to measure business growth, a key characteristic of emerging markets.

Emerging and Growth Leading Economies (EAGLES)

 Image attribution: Pawel; CC BY-SA 3.0

The MSCI Emerging Markets Index includes Brazil, Chile, China, Columbia, Egypt, Hungary, Morocco and India among its emerging markets. Some of these economies such as China and Brazil are already quite large and may seem beyond the status of emerging. Yet what distinguishes these large growing economies from fully matured developed economies are the pace of growth, the speed at which structural change takes place and the potential to significantly increase economic capacity.

Emerging Market Characteristics

Emerging markets have risen above economic and political dysfunction by continued development of a market economy that has begun growing. Some emerging markets are newly minted whereas others like China and Brazil have been around for some time but still have room to grow. Several characteristics help identify these types of markets.

Complete article link: http://www.helium.com/items/2150930-what-is-an-emerging-market