About the author: Marco Wellermann is the Director of Business Development for EMEA with Red Harp Group. A sales, marketing and business development executive with 20 years experience, Marco has created and successfully launched new products for International markets, and managed several businesses, global teams, and operations from inception.
I have lived and worked in Amsterdam, Taipei, Hong Kong, Paris, Jeddah, and now Berlin! Throughout my almost 20 years in business, I’ve traveled all over the region commonly known as EMEA (Europe, the Middle East, and Africa), establishing consumer brands in both emerging and mature, highly-competitive diversified markets. This post is the first in a series of four articles about growing new brands in EMEA.
To give you an idea about what EMEA actually means, I'll start by providing a brief introduction of the region, across Europe, Russia & CIS, the Middle East, and Africa. I'll talk about numbers, the challenges and opportunities it brings, and what's really important from a brand perspective. In subsequent articles, I'll talk in detail about what brands have to keep in mind while planning their market entry strategies from a channel, language, marketing, logistics and financial standpoint.
Despite being grouped together under the "EMEA" umbrella, there's actually little that unites the region and its 116 countries, other than the fact that their location lies somewhere between 40° W and 53° E by longitude. It contains incredible political, economic, linguistic, cultural, religious and climatic diversity. Some of the world's richest countries are lumped in with some of the poorest. Political systems range from stable democracies, to autocracies, to failed states.
The total estimated population of the EMEA region is between 2.1 and 2.2 billion people, occupying the land from the most northern parts of Europe all the way to the southern parts of Africa. When combined, the region has around 200 native languages, although a large percentage of the region can understand English, French, Arabic, German or Russian.
EMEA generates about $27.5 Trillion in Gross Domestic Product (GDP) every year. This is about 38% of the world GDP. Clearly if you have products or services with global appeal, EMEA is not a market you can afford to skip over. Revenue in the consumer electronics category across Europe, alone, will amount to 223 billion USD this year.
57% of revenues in the consumer electronics space are still coming from traditional offline retail channels
Unlike other parts of the world, like the US and China, the offline retail market in Europe is performing very strong, despite stiff competition from global e-commerce powerhouses like Amazon and eBay, among others. As the graph below shows, 57% of revenues in the consumer electronics space are still coming from traditional offline retail channels. Retailers like MediaMarkt, Dixons, Carrefour, etc. are still operating thousands of stores. If you want your brand to be successful, then you have to understand that you cannot simply rely on online sales alone.
In your brand-building, you cannot solely rely on the Big 3; never underestimate some of the smaller markets
Europe’s growth during the 20th Century was, for the most part, dominated by the economic powerhouses of the United Kingdom, France, and Germany. But over the past few years these countries have been outpaced by markets often overlooked in the central and eastern regions, such as the Czech Republic, Poland, Romania, Hungary, and Slovakia. In 2017, Romania was the fastest-growing economy in the EU, with an estimated GDP growth rate of 6.4 percent. If you want to be successful in your brand-building, you cannot solely rely on the Big 3; never underestimate some of the smaller markets, as those can be easier to enter, easier in which to develop brand loyalty, and still highly lucrative.
Russia is the largest country in the world covering more than 6.6 million square miles
Russia spans two continents, covering a portion of Eastern Europe that borders the Ural Mountains
Russia is ranked among the top 10 nations for economic production. However, despite the high GDP compared to the rest of the world, the average monthly salary is only $670. Salaries in Russia have taken a massive downfall mainly due to the unstable Ruble. Russians were able to buy 40% more goods and services in 2013 than they could in 2018. In recent times, consumers across the country were less optimistic about job opportunities, personal finances, and their immediate spending plans compared to the previous three months, mainly due to the troubling Ruble. The most active online shoppers are Millennials with higher salaries in Russia’s central regions, like Moscow and St. Petersburg.
Middle East In a diverse market like the Middle East, it is important to identify the market characteristics in order to build the right marketing strategies and product advertisements for individual regions. For example, 90% of the population in Saudi Arabia are Arabs, while neighboring countries like the UAE, is mostly a multi-national market, with expats making up more than 80% of the population. More than half of these expats are from Southeast Asia, including India, Pakistan and the Philippines.
With so much demographic and psychographic diversity , a simple one-size-fits-all strategy doesn’t work, and brands should adjust their approaches according to local preferences and demands.
If the Arab League were a single country, its 2011 GDP would have been more than $2.3 trillion, making it the world’s eighth-largest economy — bigger than India or Russia. Its per capita income would be around $6,700 USD — higher than that of China and India.
Stay tuned for the next installment in this series!