The term CIVETS might sound like small furry mammals found in Africa. But if you’re speaking to an international marketer or entrepreneur, they’re probably talking about a group of countries tipped to be major emerging markets.
The acronym, coined by Robert Ward of the Economist Intelligence Unit in 2009, stands for Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. This wave of economic development follows on from that of the BRIC group of countries (Brazil, Russia, India and China).
Ten years after he introduced the term BRIC economies, Goldman Sachs economist Jim O’Neill states that their development not only met but exceeded his expectations. Now eyes are turning to the CIVETS, which are expected to offer exciting opportunities to businesses with a global outlook.
Some of the main reasons the CIVETS are worth watching include:
Strong Economic Growth
Although the shifting global economy has hit many countries hard, the BRIC countries have emerged as key economic powers. However, this balance will continue to shift and it would be a mistake to see BRIC as the only source of global business opportunities.
According to The World Bank, many developing countries had a more robust recovery and saw stronger production in 2011 than their high income counterparts. For instance, The IMF predicts Colombia’s GDP will grow by 4.6 per cent in 2012, while Indonesia and Vietnam will grow by 6.3 per cent. This compares with just 1.8 per cent for the United States.
Back in 2010 none of the CIVETS were making much of an impact on the world’s fastest growing economies. But the predictions for their future captured marketers’ attention.
There are strong advantages to getting into new markets early while your competitors’ attention is still fixed on currently booming economies. As the six countries develop their economies over the next couple of decades, entrepreneurs will want to be prepared. Now is the time to begin making contacts and creating a presence in CIVETS countries.
Youthful, Fast-Growing Populations
The CIVETS countries also benefit from a rapidly-increasing populations. Vietnam, Indonesia and Turkey have a projected population growth of 48.87 per cent, 47.88 per cent and 46.68 per cent respectively, and Colombia’s figure is an impressive 66.03 per cent. Ten to twenty years from now, their young populations will form a stark contrast to the ageing populations of the West. Last year Egypt’s median age was just 24.3 years, compared with 44.9 in Germany. A young demographic will drive innovation and is likely to give digital technologies an important role in the way these countries communicate and do business.
The trend to get online and get connected in the CIVETS countries has already begun. According to Internet World Stats, Indonesia had 55 million Internet users by the end of 2011 and Turkey had 35 million in 2010 representing 44.4 per cent of the country’s population. Clearly there is a great deal of untapped potential in these vibrant new markets. Get noticed early and you could become a trusted name for the next generation.
Online Commerce and Technology
The CIVETS group may not have led the way in finance or technological infrastructure but they are now catching up with impressive speed. Turkey is one of the world’s major players in mobile technologies, seeing rapid growth in this field. The country is a global leader too in cashless payments. South Africa, meanwhile, is embracing the open-source software movement. Technological innovation there might look modest at the moment but the picture could be very different in a decade’s time.
This all bodes well for technology-literate entrepreneurs who are poised to link into the growth of online commerce in CIVETS countries.
Engaging with CIVETS Internet Users
The message with the CIVETS group is to get on board and do it early. This is a good time to get to know the markets, whose cultures and languages may be new to you. Don’t assume these innovative, youthful economies will bend to the old ways of doing things such as carrying out business communications in English. Vietnamese and Malay, spoken in Indonesia, are already among the world’s most widely-spoken languages.
While English is a popular second language, the growth in the power of Asian countries could result in a future shift to Chinese or Japanese. Spanish is the official language in Colombia and Egyptian Arabic dominates in Egypt, while South Africa has 11 official languages.
Linguistic choices are tied to cultural ones, and localization needs extra sensitivity where countries have had difficult political histories and represent diverse cultures. It makes sense to know the territory well.
Approach these new markets with a sense of adventure and the flexibility to evolve with them. As they reinvent themselves into exciting hubs for global trade, the forward-thinking business will be ready and waiting to meet their needs.