Tuesday, July 30, 2013

The young people in frontier markets - can we see them?

DISCLOSURE: I am a citizen of the United States. When someone says the word "frontier" to me, I think of the American West, or at least the Hollywood version of the American West. If someone says "frontier market" to me, I think of a storekeeper who bursts through the doors of his store, saying to Clint Eastwood, "The bad guys are coming to town!" The storekeeper runs away, leaving an empty chair in front of his store. Clint starts talking to the empty chair, asking it how many bullets he fired and if it (the chair) feels lucky.

OK, I guess I went overboard on that particular illustration.

"Frontier market" has an entirely different meaning to South Korean companies:

Samsung Securities said on July 25 in a research report that the expectations on the "frontier markets" that include African economies have been on the rise.

Forget the self-serving mention of the fact that Samsung Securities says that Samsung Electronics will benefit from these frontier markets. Why are these markets attractive now, when they have not been attractive in the past?

"Since the mid-2000s when most African nations moved toward a more stable political milieu, major African economies have grown in a spectacular fashion. The demography with a mostly young population is also a favorable condition for the continent," the authors added.

Now I don't know if the Korean companies have overcome the payment obstacles that make other companies reluctant to do business in Africa, but if they have, they're going to make a lot of Naira. Or Won. (1 Nigerian Naira is worth a little less than 7 South Korean Won, by the way.)
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