Business Centre
Lord Digby Jones reveals the new wave of emerging markets
By UK Trade & Investment (North West) News Release
Sep 23, 2008, 15:50

UK Trade & Investment publishes new report on Tomorrow's Markets

UK businesses looking to invest in emerging markets should continue to explore the BRICs* while Vietnam, Mexico, the UAE and Ukraine top the list of tomorrow's high growth markets, Lord Digby Jones Minister for Trade and Investment advised today.

Speaking ahead of the Economist Emerging Markets Summit, the Minister revealed findings of a new report, which examines global business' attitudes to opportunities within the BRIC countries and identifies new emerging markets.

Set to be released today, 'Tomorrow's Markets' gives new insights into where companies will go next in emerging markets, and why they are going there. It is based on the opinions and views of more than 560 high-level business executives, more than 200 of whom are headquartered in emerging markets.

Key findings include:

* Emerging market revenues account for, on average nearly 30 per cent of total revenues of those companies surveyed and this is expected to rise to nearly 40 per cent in just three years time

* Over half of the companies surveyed are looking for new markets to sell their goods and services

* 34 per cent of companies surveyed say they will enter three or more emerging markets over the next five years

* Nearly half of survey respondents still see strong potential within the BRIC markets, 49 per cent say that China is a priority for future expansion, 42 per cent choose India. An increasing amount of this investment will be redirected to the BRICs outlying regions

* Vietnam is seen as the most attractive new emerging market. Mexico, the UAE and Ukraine are also among new target markets.

Commenting on the research Lord Jones said:

"The report shows there are plenty of exciting investment destinations for tomorrow's investors. On the one hand potential investors could consider a deeper drive into the BRIC markets, especially China and India. But beyond the BRICs, a new wave of relatively untapped markets are emerging offering huge potential for investors.

"The results reveal that the BRIC markets will continue to dominate future investment flows but investors are likely to become more adventurous as they seek out lower costs and richer consumers. This is expected to take investors deeper into the relatively untouched regions.

"In China for example, the largest recipients are still Shanghai and Beijing but companies are starting to look further a field with an increasing amount of investment being directed beyond the main cities to the larger regional provinces. It's a similar story in India. Mumbai is the top city at the moment, but large regional areas such as Gujarat and Ahmadabad are beginning to look more attractive to investors."

Beyond the BRICs, Lord Jones said Vietnam was shaping up as the most attractive new emerging market. Its low cost base and sizeable population means that it could begin to challenge China as a leader in low cost manufacturing.

"Mexico, the UAE, Ukraine, Indonesia and Singapore are also seen as attractive new markets for a variety of reasons. These new high growth markets may not be able to match China or India in terms of population, but their progress in market reforms, trade liberalisation and governance will weigh more heavily in company investment decisions, especially given competitive wage levels," the Minister said.

Commissioned by UK Trade & Investment, the research is part of a wider push by Government to raise awareness about the potential trade and investment opportunities for UK companies in emerging markets.

The release of the report coincides with the launch of a new emerging markets micro site, a comprehensive go-to site for all practitioners interested in global intelligence for trade and investment in emerging markets. http://www.newwavemarkets.com

Also this week, UK Trade & Investment will officially release The Chinese Regional Cities report which identifies the 32 fast-growing cities in China that are rated as having the best business prospects. The report aims to encourage companies to look away from the established business centres of Beijing and Shanghai towards other cities in China.