Emerging Markets: A Guide for Product Managers

So you’re a product manager, at whatever level, and you think you’re doing pretty good. You know your customers, you know your product, you know your market and your place in it. Growth is on the up and retention is good.

But there are whispers going around the office. Whispers that say emerging markets.

Then suddenly, BOOM! Leadership has decided that you’ll be launching in an emerging market. You find yourself rushing to the Emerging Market Index and staring at it in panic. Where to begin?!

If this is you, we’re going to start you off right by telling you all you need to know about emerging markets and what launching into them involves. 

What is an Emerging Market?

The ‘official’ definition of an emerging market (EM) is…

“An emerging market economy is the economy of a developing nation that is becoming more engaged with global markets as it grows.”

Common examples of emerging markets include India, Mexico, Russia, Pakistan, Saudi Arabia, China, and Brazil.

Entrepreneurs and tech companies keep a keen eye on the potential of growing market economies, as investing in the right thing at the right time can lead to huge returns. What counts as an emerging market depends on who you ask.

Why are Emerging Markets Exciting for Product Leaders?

boats on body of water in Mumbai

Launching into an EM presents a whole new set of opportunities for innovation as well as some interesting new challenges. Product leaders who have operated in the same space or the same market for a long time may relish the opportunity to venture into the unknown.

Let’s take a look at some of the benefits and challenges associated with launching in an EM:

Benefits:

First to market

If you’re a product manager, you don’t need a lecture on why you want to be first to market. Just those words should get you excited!

Being first to market provides you with an incredible competitive advantage. You get to be the name that people associate with the solution to a problem, even when competing products make it to market.

Potential impact

When prioritizing features, many product leaders start with the question ‘which will have the greatest impact on my customers?’ Or rather, ‘which serves the greater good?

When you’re launching in an EM, tied in with being first to market, you have the opportunity to reach the customers that need you the most. Instead of providing a better alternative to a solution that already exists, you get to be the solution! When we’re thinking about how to do the greatest good for the greatest number, launching in an EM may be the ideal way to do that.

Opportunity for innovation

Customers in an EM think and behave differently to customers in your current market, that’s a given. Rather than seeing this as a challenge, and try to figure out how to make your existing products fit around their unique behaviours, you can use this as an opportunity for innovation.

Joris Van Mens, a Product Manager at Google, had the same realization when launching Google products in India. He and his teams found that people were using their existing products in ways that they could never have predicted. And their unique behaviours created problems for them when they tried to use products that were built for a different user base.

What’s critical is that you ensure you have product-market fit in your new EM, even if it’s not in the way you and your product team expected!

Challenges:

Localization

Localization is a great tool to have when you’re operating in more than one market. But it’s absolutely key if you’re operating in an EM.

And it goes beyond just making sure that your website copy is translated into that language. It’s making sure that the content of your product across the entire customer experience is appropriate for the culture you’re expanding into.

For example, let’s say you’re a recipe app, and your UI includes illustrations of food. You might what to make sure that you don’t have any steaks if you’re launching in India, or pork if you’re launching in the middle east. Colors also mean different things to different cultures. Red is often seen as quite an angry color in the west, but in China it means good luck.

Building localization into your product development roadmap, instead of leaving it as an afterthought, will be the key to success in an EM.

landscape photography of city buildings in Beijing

Infrastructural challenges

Your product may rely on infrastructures/technologies that are not as strong in your target EM compared to your country of origin. For example, VR products will struggle to launch in places where hardly anyone has a headset (which for now includes most places!).

Similarly, products that rely on users having constant access to a strong WiFi connection will need to adjust their expectations when launching to users who live in some rural areas. Allowing users to download content to view offline later may help to retain their loyalty.

Check out: Identifying and Managing Product Constraints: The RIVER Framework

Laws and legislations are tricky to work around even in one market, let alone adding more to your plate! Make sure you do plenty of research in this area and, if you can, bring in experts to advise you. For example, if you’re trying to launch a FinTech product in Latin America, find someone/some people who have worked on FinTech products in Latin America and bring them in as consultants.

“Are we ready?”

Even if you’ve already launched a successful product, launching it in a new market is still an investment. It takes time, resources, risk…and plenty of other things worth considering.

As always, answering this question is a case of measuring the risk vs rewards of launching in an EM. That’s why it’s important to dive into the research before you commit to anything. You need to be sure that you’re capable of building the right thing, in the right way, at the right time.

Because that’s what product managers do, right?

Check out: Product Launches and Risk: A Tough Teacher

Launch Strategies for Emerging Markets

Marco Zeschky, Stephan Winterhalter, and Oliver Gassmann from the University of St. Gallen, came up with three main innovation strategies for launching a business/product in an emerging market.

The three strategies have the goal of helping businesses overcome the hurdles of launching in markets with “lower income customers, poor infrastructure and poor service availability.” Here we’ll go through all three, and talk about how they could apply to digital product management.

Cost-innovation: cutting the cost of production in order to sell the product to customers at a lower price point. This is easier for physical products, as it mostly involves sourcing cheaper raw materials. For digital products, this could be achieved by hiring remote talent in places that don’t demand as high a salary as Silicon Valley/european tech hubs.

Good-enough innovation: Rather than building the same product with cheaper materials (or recreating the same digital product with cheaper employees) good-enough innovation requires re-working your product according to the needs of your EM. This might mean launching with fewer features, or a less fancy interface. Agile product people do this all the time with MVPs.

Frugal innovation: Frugal innovation involves building products specifically for the needs of an EM, rather than taking an existing product from an established market and chopping bits off of it. This is what product companies who are hoping to launch a brand new product in an EM to solve a specific problem will do.

Tips for Launching in Emerging Markets:

high rise buildings during daytime

Respect the local tech scene

If you’re approaching a growing market from a Western perspective, it’s very easy to fall into the trap of imposing the west’s way of doing things on the local tech scene. That’s not the way to go. Understand how the local industry is shaping its own destiny, and try to find your products place within it, rather than aggressively carving out a space for yourself.

Product School alum and Senior Product Manager at Nimble, Oluwakamiye Adelemoni, talked about some aspects of becoming a PM in a growing market:

“One big difference is the change in expectations, and this isn’t just about the new OKRs (Objectives and Key Results) that are required for the new role. Yes, the key responsibilities have changed and you need to acquire (or leverage) new skills to perform well in the new role, but the biggest realization is the fact that your past contributions in the previous role will no longer be considered. It is pretty much like starting a new job but with familiar faces. You have to be ready to learn afresh like a new team member, and many of your old skills will probably not be useful in the new role.”

Start out small

If you’re launching in India, for example, you don’t have to aim to launch in all of Mumbai! It’s OK to start out small. What’s more important is that when you launch you get it right, not that you go big.

If you’re launching a B2B product, perhaps trial it with a handful of local businesses. Or if you’re building a product with students in mind, partner with a few universities, rather than targeting every student in the country. Take the lessons you learn from this small subset of your target audience and use them to iterate as you scale.

Hire local talent

It’s good to be surrounded by people you’ve been working with for years, but when you’re trying to launch a product into a market that that team is not entirely familiar with, it’s better to bring in those who are.

If possible, bring in teammates who have worked in (or launched digital products in) the market you’re attempting to break into. Having the input of engineers that have already built software, or designers who have created interfaces, that were successful in that market, will expose you to their very valuable perspectives.

You might also be interested in: Is it Possible to Work Remotely as a Product Manager?

Conduct market research…and then conduct more market research

One mistake that companies make when they launch in an EM, or any new market really, is to think of that market as one homogenous place. It’s critical that you imagine your new market as complexly as you understand your own. What’s the difference in customer behaviour in rural vs urban areas? Is there a significant cultural divide between North/South East/West? Do the prevalence of regional dialects create barriers to using a product that’s only available in the ‘official’ language of the country?

As PM in the United States, you wouldn’t imagine that a lawyer in Manhattan has the same problems as a farmer in the midwest. It’d be a disservice to both your product and to the people in your target EM to imagine them as all the same.

This may seem like a no-brainer, but you’d be surprised how many teams have tripped over this hurdle.

Work with local sales and marketing teams

Your product development strategy has to be tailored to your new market, and the same goes for your sales and marketing strategy. A great product can be killed in the market by marketing gone wrong. You’ll benefit from tapping into local marketing talent who have experience in your target EM. Maybe you’ll be lucky, and you’ll already have people from those markets in your team.

(That’s not to say that your one engineer from South Africa is going to know everything about the tech landscape in South Africa, nor should you expect them to!) If you’re a smaller team who can’t afford to hire full-time teammates, bring people on as consultants.

Check out: Marketing Lessons for Product Managers in 2021

Be prepared to iterate

No matter how much prep you put into building a product, the best laid plans can still go awry, especially when you’re dealing with so many unknowns. Product Managers need to be good at dealing with ambiguity. Rather than trying to find all of the answers at once, or making something up, lean into the ambiguity and be open to learning.

You should also be prepared to have your assumptions challenged. Your research might have told you one thing, but then customer feedback on your newly launched MVP might tell you something else. Great product managers understand that they don’t always have all the answers. It’s the customers that have the answers.

At the end of the day, the only way to learn how to launch a digital product into an emerging market is…to do it! That might be the most unsatisfying answer, but it’s the truth. With a solid team and a well defined product vision behind you, you’ll be on your way to product success.

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