How to build a scalable business model in emerging markets?

The construction of a scalable business model in emerging markets is a challenge that requires careful planning and strategic adaptation to local conditions.

This is because these markets offer significant opportunities, such as rapid growth, consumers eager for innovation and, often, lower operating costs.

However, they also present complex challenges, including limited infrastructure and volatile regulation. 

In this text, we will explore how to build a scalable and sustainable business model in these environments, addressing essential aspects such as market adaptation, technology, and efficient management. Check it out below:

Understanding the concept of a scalable business model

One scalable business model is one that can grow quickly without increasing costs in proportion to revenues. 

In other words, it is designed to reach a greater number of customers at reduced marginal costs. AND

Therefore, this concept is crucial in emerging markets, where there is a growing demand for products and services, but resources are limited.

Practical example: 

Technology companies, such as software platforms, often exemplify this model, after all, they develop a base product and can serve thousands of customers without having to proportionally increase operating costs. 

Therefore, scalability is critical to maintaining competitiveness, especially in emerging markets.

According to the 2023 McKinsey & Company report, investment in scalable businesses in emerging markets grew 17% in 2022, showing the expansion potential of these regions. 

Furthermore, the study highlights that companies that adopt scalable strategies have an average growth of 20% per year.

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Identifying scalability opportunities in emerging markets

To develop a scalable business model In emerging markets, it is essential to identify specific opportunities that allow for expansion. 

That said, key factors include adapting to local consumption habits, personalizing offers and intelligent use of technology.

Adaptation to the local market: 

Customizing products and services to meet local needs is essential, after all, emerging markets are diverse and have cultural particularities that can be explored to create more attractive products. 

Therefore, companies that adapt their offers to regional specificities tend to gain consumer trust.

Using technology for scalability: 

Digitalization is a powerful tool for increasing efficiency and reducing costs, after all, the adoption of technologies such as automation and artificial intelligence allows companies to scale their operations with less dependence on labor, improving productivity.

Strategic partnerships: 

Collaborating with local partners can make it easier to enter new markets and overcome regulatory barriers. These alliances enable faster growth and 

Examples of emerging markets and scalability opportunities

Emerging Market	Identified Opportunities	Sector with the Greatest Potential
Brazil	Growth of e-commerce, fintechs	Financial technology
India	Digitalization of healthcare services	Health technology
Indonesia	Demand for logistics services	Logistics and transport
Nigeria	Increased use of smartphones and fintechs	Digital finance
Vietnam	Development of the manufacturing sector	Manufacturing and exports

Structuring a sustainable and scalable business model

Developing a scalable business model also requires a sustainable structure, and this means focusing on aspects such as efficient resource management, building a robust infrastructure and maintaining an adaptable organizational culture.

Cost management and operational efficiency: 

Controlling costs is key to scaling in emerging markets. 

This is because investing in automated processes and strategies that optimize the supply chain can reduce expenses and improve profit margins.

Supporting infrastructure and technology: 

A robust technological system is the backbone of a scalable business.

Therefore, companies that invest in integrated management platforms, such as ERPs (Enterprise Resource Planning), are able to better coordinate their operations, even in volatile markets.

Adaptable organizational culture: 

A scalable business model must be supported by an organizational culture that encourages innovation and flexibility. 

In emerging markets, rapid changes are common, and the ability to adapt can be a competitive differentiator. 

So, cultivating a continuous learning mindset is essential to staying relevant.

As Peter Drucker, considered the father of modern management, said, “Culture eats strategy for breakfast.” In other words, without a strong organizational culture, even the best business model can fail.

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Overcoming regulatory and infrastructural challenges

Emerging markets have specific challenges that must be considered when building a scalable business model. 

This is because regulatory complexity, poor infrastructure and economic volatility are factors that can hinder expansion.

Regulations and bureaucracy: 

Adapting to local regulatory requirements is essential to avoid penalties and interruptions to operations. 

Often, relying on specialized consultancies can be a valuable investment in navigating bureaucracy.

Limited infrastructure: 

Lack of adequate infrastructure can increase costs and reduce operational efficiency. 

Companies that invest in creative solutions, such as in-house logistics or renewable energy, can overcome these limitations and gain a competitive advantage.

Economic and political instability: 

Volatility is one of the biggest risks in emerging markets. 

Therefore, diversification strategies, both in terms of products and geographic markets, help to mitigate the impacts of local crises.

Success stories: scalable business models in emerging markets

Companies that managed to create a scalable business model in emerging markets can serve as inspiration for new entrepreneurs. 

This is because success stories show how innovative strategies can overcome barriers and achieve significant growth.

Nubank (Brazil): 

Brazilian fintech expanded rapidly by serving underbanked consumers with accessible, digital financial services. 

With a technology-focused approach and a simple interface, Nubank gained millions of customers in a short time, exemplifying a scalable business model.

Oyo Rooms (India): 

The Indian startup transformed the accommodation market by standardizing and digitizing small hotel chains. 

With an efficient technological platform, it was able to expand to several countries, taking advantage of the demand for affordable and quality accommodation.

Jumia (Africa): 

Known as the “Amazon of Africa”, Jumia grew quickly by adapting to the particularities of the African market.

This is because the company invested in its own logistics infrastructure, enabling the delivery of products to regions with little logistics coverage.

Conclusion: Towards sustainable scalability

Build a scalable business model in emerging markets requires a strategic approach that considers both local opportunities and challenges. 

After all, companies that can adapt quickly and explore digitalization have a greater chance of success. 

However, the sustainability of growth depends on efficient management, cultural adaptation and a continuous focus on innovation.

Scalability is therefore not just a matter of expanding, but of expanding in an intelligent and sustainable way. 

Finally, the search for local solutions, combined with a global vision, is what can transform a company into a true success story in emerging markets.

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