Emerging markets, such as those in Africa, Latin America, Asia, and parts of Eastern Europe, are brimming with opportunities for businesses to flourish. According to Goldman Sachs, these markets represent nearly 85% of the global population and are projected to contribute approximately 60% of global GDP by 2030. As industries mature in upcoming markets, investors and entrepreneurs are increasingly turning their attention to these regions, which offer not only high growth potential but also a rapidly expanding consumer base. However, identifying the most profitable startups and businesses requires a deep understanding of local needs, trends, and the evolving global economic landscape.
The World Economic Forum (WEF) and Standard Chartered Bank have both highlighted that emerging economies are likely to dominate global growth, with them contributing significantly to global GDP by 2030, driven by population size, urbanization, and rising middle-class incomes. Some prominent industries that support the aforementioned statistics are discussed comprehensively here.
The rapid proliferation of internet connectivity and mobile phones in emerging markets has fueled the explosive growth of e-commerce, giving rise to new business opportunities. According to a study in Statista, by 2027, the global e-commerce market is projected to cross $8 trillion, with emerging markets expected to contribute a large portion of this expansion. In regions like Southeast Asia, Africa, and Latin America, e-commerce platforms have witnessed double-digit growth. For example, in 2023, Latin America’s e-commerce market grew by 25%, driven by an increasing number of digital buyers who prefer the convenience of online shopping.
Mobile penetration has significantly aided this transformation. In Africa, mobile internet subscriptions are expected to grow to 634 million by 2025, increasing e-commerce's potential. Companies like Jumia (Africa’s largest online retailer) have capitalized on this trend, reporting a revenue increase of 21% year-on-year in 2023. Platforms that cater to local preferences, offer a wide range of payment options, and provide efficient delivery networks are poised to succeed in the long term.
"Innovation within e-commerce organisations comes from encouraging teams to relentlessly pursue inventive solutions for longstanding challenges," Bart van Dijk, Managing Director, Daraz.
In many emerging markets, a significant portion of the population remains unbanked or underbanked. According to the World Bank, 1.4 billion adults globally still do not have a bank account, with the majority located in developing countries. This has created fertile ground for fintech startups to offer innovative financial services like mobile banking, digital wallets, and peer-to-peer lending, rapidly transforming how people handle their finances.
The fintech market in Latin America, for example, has seen extraordinary growth, with investment in the sector surging to $5 billion in 2022. The region's unicorns, such as Nubank and Clip, are leveraging technology to provide digital financial solutions to millions, capitalizing on the demand for easy, accessible, and secure banking services. Similarly, the Indian fintech market is projected to reach $150 billion by 2025, thanks to government initiatives like the Unified Payments Interface (UPI) and a young, tech-savvy population.
"Microlending services offer a streamlined avenue for businesses to swiftly secure the necessary funds to engage in the type of trade they desire and do so at scale," Srinivas Koneru, Chairman & Chief Executive Officer, Triterras.
Startups that address the challenges of financial inclusion, offer credit access, or create tailored services for small businesses are likely to thrive in these markets. For instance, in Africa, the fintech company M-Pesa has revolutionized mobile payments, contributing over 40% of Kenya’s GDP.
Healthcare is a pressing need in many nations in the southern hemisphere, with aging populations and growing middle classes demanding better medical services. According to the World Health Organization (WHO), nearly 50% of people in these regions lack access to essential health services. This gap has driven high demand for affordable healthcare solutions, ranging from telemedicine and diagnostic services to pharmaceuticals and medical devices.
Emerging markets are expected to account for over 40% of global pharmaceutical sales by 2025. Brazil, India, and China are already among the world’s largest pharmaceutical producers, with Indian exports alone valued at $25 billion in 2023. Additionally, digital health platforms like India’s Practo and South Africa’s Hello Doctor are providing remote healthcare services to millions, addressing the challenge of healthcare accessibility in rural areas.
"Enhanced by greater global connectivity and reach, along with the availability of consulting options with entities that specialize in arranging medical tourism packages, the sector is witnessing transformative growth," Manuj Mittal, Co-Founder & CEO, Vedancure.
The healthcare market in emerging economies offers opportunities across the value chain. Medical tourism, particularly in Asia and Latin America, is also on the rise, with patients from developed countries seeking high-quality, cost-effective treatment abroad.
Education Technology: Building the Future
Education is a significant area of investment in emerging markets, particularly as governments and private sector entities strive to improve literacy rates and upskill their populations. The global ed-tech market is expected to grow to $404 billion by 2025, with a large portion of that growth coming from countries like India, Brazil, and Indonesia. The COVID-19 pandemic accelerated the adoption of online learning platforms, which continue to thrive as they address both accessibility and quality issues.
Companies like Byju’s(now bankrupt) in India, which was valued at $22 billion in 2023, exemplify the massive potential of ed-tech in emerging markets. These platforms offer affordable and flexible learning solutions, often tailored to local languages and curricula, making education more accessible to underserved populations.
Startups in this space that leverage digital tools, focus on vocational training, or collaborate with governments are positioned to profit from the growing demand for education.
While the definition of emerging economies has changed since the term was first coined in 1981, a lot of nations have left this bucket and attained prosperity, while the converse has also happened. It doesn’t change the fact that the current emerging economies have a lot to offer across every sector, which is fathomable in terms of new business opportunities, each accompanied by their respective hurdles. Navigating across this tightrope is the key to identifying the most profitable businesses in these rapidly growing regions and reaping the rewards they will offer in the future.
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