The fast-growing CIVETS countries have attracted a lot of attention from investors in the first half of 2012.
As internet use continues to rise, they offer new opportunities for e-commerce companies.
As the Eurozone’s debt woes continue, more marketers are looking further afield for new customers. Many eyes are turning towards the so-called CIVETS nations – Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa.
They’ve been tipped by some economic analysts to be the next group of fast-growing economies, following the BRIC countries (Brazil, Russia, India and China).
Three years after Robert Ward, of the Economic Intelligence Unit, coined the acronym, they appear to be fulfilling many of his expectations. He highlighted their improving infrastructures, relatively sophisticated financial systems and diverse economies.
They’ve outpaced the BRIC group in the first half of 2012. This strong growth has come despite recent problems, such as political unrest and high unemployment in Egypt, and rising food prices.
For digital marketers, there are several reasons why they’re an attractive prospect now. With young populations and a growing urban middle class, web use and consumer demand are rising fast.
Online marketing and social media can be cost-effective ways of reaching them. With growth expected to continue over the next decade, companies can gain a “beginners’ advantage” by targeting them at a relatively early stage.
Young, fast-growing populations
The six countries have similar demographics – with rapidly increasing, relatively young populations. The average age is only 27, in stark contrast to the ageing populations of most Western countries.
Colombia is expected to grow by 66% over the next decade, while Indonesia is already the fourth most populous nation in the world.
This trend goes in tandem with the rise of the middle class and greater urbanisation. Indonesia’s middle class is expected to triple in size by 2014, creating a huge market for consumer goods and luxury items.
A digital trend
Internet penetration is still relatively low in some of these countries, but this is changing fast. Figures by eMarketer show that Indonesia had the world’s third fastest growing online population, with an impressive 29% growth between April 2011 and 2012. The study placed Colombia in 9th place, with 14% growth.
Mobile is a strong driving force behind this trend. Fixed broadband coverage is still patchy, and many people rely on their cellphones to get online. Anyone marketing to these countries should make sure they have a mobile-friendly website.
Social media is also hugely popular. Indonesia has one of the highest number of Twitter accounts (according to social media research firm Semiocast), while Colombians are some of the world’s most enthusiastic social networkers, according to Comscore.
Targeting the CIVETS countries
As with all global digital marketing, it’s important to consider linguistic and cultural differences. Even though more people are learning English as a second language, web users are still much more likely to search and browse in their native tongue.
They also tend to put more trust in websites in their own language. It’s also important to be sensitive to different cultures, and adapt your message accordingly.
While the CIVETS economies are developing fast, there can still be practical problems for foreign e-commerce companies to overcome. Columbia has made progress in tackling security and corruption problems, but these are still a major concern.
Overseas businesses must also struggle with a complex tax system and poor infrastructure. The Economic Intelligence Unit cites “government effectiveness” as a major concern for global companies in Turkey and Indonesia.
Marketers should be prepared to be flexible and adapt their strategy to fit these evolving markets. It can be difficult navigating the complexities of new markets, and it’s obviously not without risks.
But the signs are this growth is expected to continue. The UK Department of Trade and Industry defines Indonesia and Vietnam as “high growth markets”, while Turkey is predicted to be the second fastest-growing economy in the world by 2018.
For global businesses, there could be benefits to getting a foot in the door early, and taking advantage of a relative lack of competition.