Emerging markets represent the largest growth opportunity for the FMCG industry, as they currently represent over half of global FMCG spend and have been primarily responsible for all the value growth in the industry over the last five years.
The appeal of American FMCG brands in these markets is undeniable, as some of the most popular FMCG brands across Africa and LATAM are global brands. However, these brands face significant challenges in these markets and are unable to maximize the growth opportunities presented by emerging markets.
This article examines how American FMCG brands can penetrate the fragmented retail markets across Africa and LATAM to unlock opportunities in those regions.
The Challenges for American FMCG Brands in Emerging Markets
Emerging markets pose a huge opportunity for consumer brands who can successfully navigate these markets, as research shows that over half of all FMCG growth between 2022 and 2026 will come from emerging markets outside China and contribute over $1 trillion in value.
However, despite this huge opportunity, large American and other global brands have been unable to drive significant growth in these markets amidst stiff competition from smaller challenger brands.
Large global brands face an uphill battle in driving growth in emerging markets, despite their often vast financial resources, with recent data showing that local brands already account for a staggering 70% of all FMCG growth. These local brands have an edge due to their intimate knowledge of the local markets, enabling them to effectively tailor product offerings and prices to the local market.
One key factor that has prevented larger American brands from unlocking consistent growth is the difference between the retail environment in developed and emerging markets. While American brands may be accustomed to distributing their products through modern outlets like supermarkets and hypermarkets, they are often stumped by the reality in emerging markets, where over 70% of all consumer goods are sold in small roadside stores and open market shops and consequently grapple with how to make inroads into these informal markets.
While digital technology can help bridge this gap, most of the available digital solutions available often fall short. For example, e-commerce technology, the easiest and most common digital solution that brands can adopt, is not very effective for brands. Most e-commerce platforms are built only to benefit the platform owners – the big tech firms and do not offer brands a clear view of the supply chain.
With e-commerce, the platform monopolizes all the data and insights gathered across the markets, while brands remain in the dark about key data like who is buying their products, in what geolocations there is demand for their products, and how to tap into this demand to drive growth.
How AI-Powered Open Commerce is Bridging the Gap for American Brands in Emerging Markets
What American FMCG brands in emerging markets need is a solution that provides real-time data across emerging markets so they can gain the same flexibility and resilience that smaller challenger brands have in the market.
RedCloud’s Intelligent Open Commerce Platform, powered by revolutionary Open Commerce technology, is an open digital platform that provides American FMCG brands with the insights and tools they need to unlock the potential hidden in emerging markets. With Open Commerce, FMCG brands, distributors, and retailers can connect and trade freely on an open, transparent digital platform.
Our Intelligent Open Commerce Platform comprises an AI-powered insights tool – RedInsights, that draws from over 50,000 data points in real-time to provide brands with a detailed, live view of the fragmented local markets they operate in. More importantly, we go beyond raw data to provide actionable insights that brands can leverage in real-time to make better decisions and access more opportunities in the market. Our smart data insights tool will use AI to analyze the captured data, pinpoint market shifts, detect new regions of potential, and provide actionable insights that the brands can instantly apply with a few clicks to sell more and reach more customers.
Take advantage of RedCloud’s Intelligent Open Commerce Platform to unlock more opportunities and drive growth across emerging markets. Register your interest here