Mikkitaminnen
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![Page 1: Mikkitaminnen](https://reader035.fdocuments.us/reader035/viewer/2022062514/55b75687bb61eb0e0e8b4781/html5/thumbnails/1.jpg)
The growth of online businesses in
Asia's Frontier Markets
Mikko TamminenExecutive Chairman, [email protected]
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BangladeshPopulation: 158MGDP/capita: $1,171
NepalPopulation: 28MGDP/capita: $698
Sri LankaPopulation: 21MGDP/capita: $3,557
Myanmar/BurmaPopulation: 51MGDP/capita: $1,221
VietnamPopulation: 92MGDP/capita: $2,052
CambodiaPopulation: 15MGDP/capita: $1,080
LaosPopulation: 7MGDP/capita: $1,692
Frontier Markets
Sources: IMF, 2014; Official Population Clocks
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1 When should internet companies expand into frontier markets?
2 How should you do it?
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1Low Cost of Online Marketing
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$1.32
$1.09 $1.08$1.02
$0.79$0.72 $0.70
$0.59
$0.44
$0.25$0.19 $0.17 $0.13 $0.11 $0.10 $0.09 $0.09
Average Facebook Cost Per Click By Country
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2The Growing Middle Class
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Large PepperoniPan Pizza
London £15.45(-30%)
Dhaka £10.78
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$1.32
$1.09 $1.08$1.02
$0.79$0.72 $0.70
$0.59
$0.44
$0.25$0.19 $0.17 $0.13 $0.11 $0.10 $0.09 $0.09
Average Facebook Cost Per Click By Country
-87%
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3Proximity to Production
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Fashion Groceries Electronics
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4Untapped Markets and Low Competition
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10-YEAR HORIZON
Make ROI SignificantOn International Level
Build Your Brand Using Low Marketing Costs
and Continuously Improve Service
2015Low Marketing CostsGrowing Middle Class
Poor Payment SolutionsPoor Logistics Infrastructure
Few New Entrants
2025Higher Marketing Costs
Larger & Growing Middle ClassExcellent Payment Gateways
Excellent Logistics InfrastructureRush Of New Entrants
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ALTERNATIVE (WORSE)
Enter Frontier Markets, Face Higher Costs and
More CompetitionChill
2015Low Marketing CostsGrowing Middle Class
Poor Payment SolutionsPoor Logistics Infrastructure
Few New Entrants
2025Higher Marketing Costs
Larger & Growing Middle ClassExcellent Payment Gateways
Excellent Logistics InfrastructureRush Of New Entrants
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How to enter?
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Own Expat Team ApproachSend in own team, own majority of the company, and provide resources
+ Existing business expertise+ Control over process
- Constant need to justify costs- Typically not long term solution- Expensive- A distraction- Easy to loose conviction
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Local Team ApproachHire a local team, own majority of company, and provide resources
+ Local expertise+ Cheaper+ Potentially longer term solution
- Constant need to justify costs- Lack of control and oversight- A distraction- Potential misalignment of strategy
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Share Call Option ApproachFind local entrepreneurs, provide them all technology and mentoring, and have call option to buy company in future
+ Investment is minimal+ Long-term solution+ Not a distraction+ Easier to convince investors