Distribution Challenges in Emerging Markets

An emerging market is a country that has some characteristics of a developed market but does not satisfy standards to be termed a developed market. There are numerous distribution issues that can arise while doing business in Emerging Markets, some of which are discussed below.

Fragmented markets

It involves determining the balance between traditional and modern trade. In most African countries, Modern trade is in the developmental stages. The contribution still happens to be in the low single digits.

Outlet base

It includes determining whether non-traditional and traditional channels are well-defined. Determining the outlet base in most emerging markets can be a tough undertaking. Companies have to realize the potential as well as the existing outlet base. An EDS (Every Dealer Survey), is an important component of all successful roll-outs of distributors.

Channel strategy

This involves how channels tend to operate and function. Businesses should map out a transparent channel strategy and determine the channel that will be serviced by the chosen distributor. A channel strategy that is badly defined can have a very bad impact on distributor roll-outs. It is important to understand that a one-size-fits-all approach does not work.

Selection criteria

It is important to understand what the main components of a successful partnership in distribution are. The criteria for selection will possibly comprise of essential components, such as necessary organizational structure, transportation, warehousing, infrastructure, and capital.

Territory

Companies should check whether there is a well-defined territory and whether the distributor is capable of servicing the territory. Companies need to schedule joined training sessions to ensure distributor capability. Company owners should also make sure that there are well-laid territory maps with a proper realization of the density of the outlet.

Account development

This issue centers around how the management of account development should be done and is an important component of the operation of any distributor. Companies, in most cases, should prioritize and attend to strategic or high-value customers. Company owners should decide how to divide the activities of account development between the distributor and the company.

Regional differences

This issue is about the rural, urban and regional differences that are part of a distribution.

The issues discussed above are some of the main reason why we at CrowdForce have made it our mission to create a way to help build an offline distribution network to help business scale and become profitable in emerging markets.