How to capitalize on emerging markets

NigeriaI have written several times about the great opportunities for mobile games in emerging markets, particularly some of the lesser known markets such as Vietnam and Nigeria. A recent article in the McKinsey Quarterly, “Act like a hero: How to sell in emerging markets,” did a great job of describing how companies can actually turn these opportunities into profits. Although these opportunities are incredibly exciting, it takes significant effort and the backing of your whole company to penetrate international markets, let alone emerging markets. If your company is at the point where it can focus on building its sales outside the home market, the following steps are a great roadmap to success.

How to succeed in emerging markets

The key to success in emerging markets is realizing the consumer is different and then understanding these differences. What works in the US, Japan or the EU probably will not work in an emerging market, and trying to force that product or strategy can cause a false negative (a perception that there is no opportunity when there really is one). There are three imperatives to accelerate growth in emerging markets:

  • Visit the market. You need to actually get on the ground in your target market to be successful. First, there is virtually no actionable data available to game companies. While you can find information on what games gross well in the US and Europe, this information is non-existent for emerging markets. No matter how good you are at Google, you probably will not be able to find out what type of games Nigerians like from your office in San Francisco or Berlin. You need to visit the target markets to get an understanding for what will—and will not—work. In addition to consumer demands, visiting the target market will give you a better understanding of the distribution chain and key players. Since you are unlikely to find an Apple store in Bamako, you can see where people buy smartphones and why they are buying them. This will help you understand the type of apps that could resonate. It is a good idea to visit any market that is important to your business but it is imperative for penetrating emerging markets. 
  • Find and invest in a great partner. Your partners are going to drive downloads and sales in emerging markets, more so than in your traditional territories. They understand the local consumer and are able to drive people to your games. Also, these companies are likely to vary much more than ones in developed countries, where competition has made many marketing and distribution partner somewhat interchangeable. Thus, you need to find a company or team in each target territory who you can trust, who has access to the market and who understands your games. Once you have good partners, you need to invest in the relationship so that you are crucial to their growth and they can effectively work with you. 
  • Build and retain talent. As the article points out, social mobile game companies are used to a large client base generally strive to capture incremental market share and improve monetization. Emerging markets are a jarring change: growth is rapid and unsettled and consumer classes emerge overnight. Companies that are too timid to make long-term commitments can soon find themselves marginalized. This includes having the right people in place in your key target markets as well as the partnerships previously described.

As I have discussed, the growth of smartphone usage in emerging markets is a tremendous opportunity for social game companies. However, leveraging these markets is not simply making your app available in Ghana; it takes a commitment of time and resources to succeed.

Author: Lloyd Melnick

I am GM of Chumba at VGW, where I lead the Chumba Casino team. Previously, I was Director of StarsPlay, the social gaming vertical for the Stars Group. I was also Sr Dir at Zynga's social casino (including Hit It Rich! slots, Zynga Poker and our mobile games), where I led VIP CRM efforts and arranged licensing deals. I have been a central part of the senior management team (CCO, GM and CGO) at three exits (Merscom/Playdom, Playdom/Disney and Spooky Cool/Zynga) worth over $700 million.

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