Look beyond BRIC for real opportunities

by John Manners-Bell on 2012-06-20 01:25:42

Speaking at the TOC Container Supply Chain Conference in Belgium last week, I highlighted the opportunities which exist in the emerging world but added that, in my opinion, smart investment would target the smaller, but faster growing niche markets.

Although the term 'BRIC' (Brazil, Russia, India and China) is a convenient one for consultancies and the media , none of these countries share the same dynamics or development paths. In fact, the differences between the markets are more pronounced than the similarities.

China's growth, of course, has been built on the demand for cheap consumer goods in the West. The economy is now morphing into a consumer society in its own right, and with growing levels of disposable income, it is starting to suck in goods from around the region and indeed the world. Brazil and Russia, on the other hand, are heavily reliant on their vast energy resources. However, whereas China has invested vast sums in its transport infrastructure to integrate its economy within global supply chains, this is not the case in either Brazil or Russia. Neither is it so in the other BRIC economy, India.

To focus on just these countries, is to ignore opportunities in second tier markets. Presenting the findings of the Ti-researched Agility Emerging Markets Logistics Index 2012, I explained that one of the reasons behind its development was to be able to identify and prioritise those markets with the best prospects rather than rely on instinct and media-hype.

To illustrate this point, I highlighted one of the Index's key metrics: the level of 'Connectedness' which each emerging market has with the global economy. In other words, the level of investment in ports, airports and roads as well as the frequency and range of destinations of liner/air cargo carrier services. On this measure, China scores the second highest in the ranking of emerging markets, just behind the UAE. In contrast, Russia (18th), Brazil (19th) and India (24th) languish much further down the list.

In conclusion, I warned that logistics companies would be missing a trick if they failed to look beyond the BRIC markets. Indonesia, Mexico and Turkey all provide good opportunities, growth prospects and a substantial market size. Beyond this tier, major opportunities exist in countries such as Thailand, Malaysia and Saudi Arabia. In fact, the fastest growing trade lanes link much smaller countries such as Oman, Morocco, Qatar and Paraguay with the developed world.

John Manners-Bell