When looking at up-and-coming countries to expand into, you’ll often see one four-lettered acronym pop up frequently: BRIC.
BRIC refers to Brazil, Russia, India and China — an economic bloc of developing countries at similar stages of advanced development. These countries were initially projected to be the fastest growing market economies by Jim O’Neill of Goldman Sachs in 2001.
Due to low labour and production costs, economists believe these four nations will become dominant suppliers of manufactured goods, services and raw materials by 2050. Many companies also cite BRIC nations as a source of foreign expansion opportunities.
Given the UK’s recent exit from the European Union, many UK-based businesses will be particularly keen to tap into growth opportunities further afield. So, let’s take a closer look at why these countries could be the next move in your global expansion journey…
There’s far more to Brazil than carnivals and caipirinhas. As the second-largest economy in the Americas and the ninth-largest in the world, Brazil is becoming an increasingly popular destination for businesses seeking global expansion — and for good reason.
In addition to being one of the most multicultural and ethnically diverse nations on the planet, Brazil is also becoming more and more urbanised, meaning there’s high potential for businesses working in industrial sectors. Most multinational companies with operations in Brazil are based in São Paulo — a popular choice for foreign companies — but there are also plenty of opportunities in Rio de Janeiro, Brasília (the capital) and Macaé.
For UK companies, in particular, Brazil is an excellent choice thanks to the UK-Brazil JETCO (Joint Economic and Trade Committee), an important channel for the UK and Brazilian governments to initiate improvements in the business environment.
At a 2020 meeting between the current Brazilian and British governments, both parties reiterated their commitment to strengthening bilateral commercial ties, trade and investment relations between the two countries — namely by continuing work on market access and intensifying preparations for a future free trade agreement.
The two countries also acknowledged that an agreement to avoid double taxation — one of the top investment promotion mechanisms raised by companies in both countries — would facilitate a substantial increase in trade and investment flows between Brazil and the UK.
Russia may have a reputation for controversy, but the world’s largest nation also offers unique opportunities that could make the right company’s global expansion incredibly successful.
For one, the country has a vast, diverse consumer market and a rapidly increasing middle class. As a result, products and services from all areas — including automotive, consumer products, construction, real estate, telecommunications and banking — are in great demand. In addition, many foreign businesses are finding that Russian consumers are highly receptive to their brands, especially when it comes to luxury goods and food and drink.
The nation is currently the UK’s 12th export market; however, economic forecasts say the commercial relationship between the UK and Russia is growing. Although Russia has great strengths as a superpower, it also has significant capability gaps, which UK businesses’ cutting expertise in a range of sectors can help to plug.
While Russia’s size has been a challenge for logistics and supply chains in the past, recent developments in infrastructure and transport links have also greatly improved the logistical efficiency of doing business in the country. Plus, with a spate of new investment programmes encouraging foreign investment, prospects for international companies are looking up.
Perfect for modern-day adventurers keen to explore, the captivating, colourful country of India has long been known for its mix of traditions, local cuisine and stunning sites. But India also presents exciting opportunities for international businesses looking to venture into new territories.
Since 2000, the country has increased the size of its economy by six times — making it the fastest growing economy globally. (In fact, India is evolving at such a rapid pace that it’s difficult to take a snapshot of it today that will still be valid tomorrow.) Today, the nation is the world’s fifth-largest economy, and India’s middle class counts for approximately 300 million people — comparable in size to the EU’s entire market.
International companies often move to India to take advantage of the country’s colossal pool (the second largest in the world) of both skilled and unskilled labour, which is available at a comparatively moderate cost. However, many organisations that expand into India for the costs tend to stay for the quality and investments in innovation.
Most opportunities can be found in the major northern cities, such as the financial centre of Mumbai and India’s political capital New Delhi. The southern megacity of Bengaluru is also home to India’s high-tech industry — while arts, retail and hospitality tend to be centred around the coastal tourist hotspots, such as Goa in the west.
UK companies needn’t worry too much about settling in and establishing connections, either: the main business language is English. Plus, thanks to the UK’s strong, long-standing ties with India, businesses will find open doors and plenty of incentives, enabling them to take full advantage of the growing Indian export and investment market.
For a long time, China kept its 5,000 years of history and culture under wraps. However, China’s decision to finally welcome in the outside world (especially the West) goes hand in hand with foreign investment and the business environment it has constructed and consumed since the 1970s.
In recent times, China has seen big changes. Formerly an agricultural economy, the country has transformed its market and is now home to a booming economy — the second largest in the world behind the USA. In fact, China is now so powerful that it sets the global benchmark for prices, with ‘The China Price’ acting as a synonym for the world’s lowest costs.
What’s more, if India has the second-largest workforce, China has the largest. Over the years, this labour force has played a vital part in establishing China as the manufacturing base of the world. And as a result, suppliers often encourage their biggest clients to open factories, or at least find subcontractors, on Chinese soil.
Rather than fear the cold shoulder, this pragmatic development has opened the doors to vast opportunities for foreign businesses looking to gain footing in the country. China also happens to be the largest Asian recipient of UK exports, meaning there are plenty of areas for UK companies from all major sectors — from healthcare and technology to energy, finance and engineering — to sink their teeth into.
Ready to make your next move? A global Professional Employer Organisation (PEO) can support your expansion into new markets with unmatched knowledge across hundreds of countries and disciplines. Our worldwide footprint and far-reaching expertise can take your business further — contact us today to find out more about our international employment services.