New Markets, New Opportunities
Date: Monday , July 28, 2014
Founded in 1971, FedEx Corporation (NYSE:FDX) is an American global courier delivery services company. Headquartered in Memphis, Tennessee, the company has a current market cap of $44.31 billion.
MINT - Mexico, Indonesia, Nigeria, Turkey. Or maybe it\'s CIVETS - Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa. Either way, for anyone engaged in international business, \'CIVETS\' and \'MINT\' are both increasingly shorthand for taking the long view. Rich with possibilities, these young, vibrant new economies are just starting to flex their muscles, but by 2050 many are projected to make up the top 20 contributors to global GDP.
It is fascinating to scout the potential of these new markets, especially for someone like me who has worked across a number of regions with FedEx. I am curious and interested as to which direction these new markets will move.
Take Mexico, where FedEx recently opened a new $48 million hub. In recent years, FedEx has witnessed year over year growth in the transportation of goods to, from and within this market. With the capability of moving 13,500 packages every hour, the new Mexico hub not only serves as the most advanced FedEx Express distribution center in Latin America for intra-Mexico package movement, but also speeds deliveries to and from Mexico around the world, especially the U.S. This highlights the power of the FedEx network to offer seamless worldwide access.
Trade between the U.S. and Mexico has been steadily increasing, and has tremendous potential in the years to come. Trade already accounts for almost two-thirds of Mexico\'s GDP. Colombia also continues to capture the world\'s attention, as its bustling export of flowers continues to firm up the country\'s position as one of the leading flower suppliers to the U.S.
Mexico and Colombia typify the strength that all the MINT and CIVETS countries share: proximity to a huge market full of potential buyers, abundant natural resources and commodities to sell, as well as a young and increasingly well-educated population that is eager to work, and has money to spend. They are also better connected – both physically and virtually – to the world market.
While internet penetration varies between and within markets, emerging economies are the principal drivers of today\'s growth in global internet take-up. For example, internet usage in Nigeria and Vietnam grew from 200 thousand users in 2000 to over 48 million and 31 million users respectively in 2012. This kind of change is opening up an abundance of opportunity, providing access to information and a vehicle for commerce. It is allowing businesses of all sizes – from established multi-nationals to budding entrepreneurs – to enter and participate in the world marketplace.
But the internet cannot stand alone. For these new markets to continue down a successful path, the right physical infrastructure must be in place to support meaningful connections among the businesses in that market to consumers all over the world. FedEx stands at the intersection of physical and informational infrastructure required for global commerce. We fully advocate the development of infrastructure in these emerging economies, whether it is the \"hard\" infrastructure of roads, bridges, ports, airports, power, and internet access, or the soft infrastructure such as liberalization of trade policy, and an advanced educational environment.
The right investments will yield bright futures for these economies, and the role they can play in the global marketplace, especially when you consider that demographic dividend mentioned earlier. A lot of these markets will have a younger population for a long time, supporting a great new labor force and consuming class. But markets need to support that population with employment, business and educational opportunities. FedEx continues to invest in these new economies, through acquisition and organic growth. Besides the new hub in Mexico, the company recently completed the acquisition of Supaswift, meaning FedEx Express will now directly service seven countries in southern Africa, offering a suite of export and import solutions.
Today, anyone doing business must keep a sharp eye out for new markets just beginning to thrive. According to the U.S. Commercial Service, 95 percent of the world\'s consumers live outside of the United States. That, plus the slow growth of traditional economic powerhouses and increased global connectivity, means newly emerging markets have greater access, and new opportunities to \"grab the torch\" for their leg of the race for economic prosperity.