Growth in procurement demand in emerging market countries: trends, opportunities and challenges
I. Introduction
As the global economic landscape continues to evolve, emerging market countries are attracting the world's attention with their strong economic growth momentum. These countries have become a new driving force for global economic growth with their unique resource endowments, demographic dividends and continuously optimized policy environments. As an important engine of global economic growth, the growth in procurement demand in emerging market countries has not only injected new vitality into global trade, but also provided a broad space for development for enterprises in various countries.
II. Trends in the growth of procurement demand in emerging market countries
(I) Overall trend
In recent years, the procurement demand in emerging market countries has shown a rapid growth trend. Taking Africa as an example, according to a report by the International Monetary Fund (IMF), it is expected that in 2025, sub-Saharan Africa will achieve an economic growth rate of 4.2%, and North Africa will also reach 3.9%, both higher than the global average of 3.2%. Economic growth has brought about an increase in residents' income and an increase in consumption capacity, thereby promoting demand for various goods and services.
(II) Regional differences
There are certain regional differences in the growth of procurement demand in different emerging market countries. The growth of purchasing demand in Latin America is mainly concentrated in the fields of manufacturing and resource development; while the purchasing demand in the African market is more extensive, involving infrastructure construction, consumer goods, agricultural equipment and other fields.
(III) Product categories
The growth of purchasing demand in emerging market countries covers multiple product categories. Purchasing demand in the fields of building materials, engineering machinery, electronic products, home appliances, agricultural and food processing equipment, medical and pharmaceutical, consumer goods and textiles has shown different degrees of growth.
III. Factors affecting the growth of purchasing demand in emerging market countries
(I) Economic growth
The growth of purchasing demand in emerging market countries is first of all due to economic growth. The rich natural resources, increased export demand and government-promoted economic diversification and sustainable development policies of these countries have provided a solid foundation for the growth of purchasing demand.
(II) Demographic dividend
Emerging market countries usually have a large population base and a young population structure. Taking Africa as an example, its average age is relatively low, which provides sufficient labor and a broad consumer market for economic development.
(III) Policy support
Government policies have played an important role in promoting the growth of purchasing demand. Many governments of emerging market countries have attracted foreign investment and enterprises to enter the market by formulating preferential policies and improving the business environment, thereby driving the growth of procurement demand.
(IV) Infrastructure construction
Emerging market countries are generally in the stage of infrastructure construction, and have a large demand for products such as building materials and construction machinery. At the same time, the improvement of infrastructure has also provided support for the growth of procurement demand in other areas.
(V) Digital transformation
Digital transformation has gradually become popular in emerging market countries, providing new impetus for the growth of procurement demand. For example, the widespread popularity of mobile payments in Africa and other regions has not only promoted financial inclusion, but also laid the foundation for the vigorous development of e-commerce.
IV. Detailed analysis of demand in different countries and regions
(I) Africa
Nigeria: As the largest economy in Africa, it has abundant oil resources and has a large demand for building materials, electronic products (such as generators, auto parts, etc.) and food processing equipment.
South Africa: One of the most industrialized countries, it has a large demand for auto parts, mechanical equipment and medical supplies.
Kenya: The economic engine of East Africa, it has a large demand for agricultural machinery, solar products and textiles.
Egypt: One of the largest markets in North Africa, with a large demand for building materials, household appliances and chemical products.
Ghana: One of the stable economies in West Africa, with a large demand for mining equipment, food processing machinery and electronic products.
(II) Latin America
Brazil: As one of the BRICS countries, Brazil has strong competitiveness in agriculture, mining and manufacturing. Its procurement needs are mainly concentrated in machinery and equipment, electronic products, auto parts and medical equipment.
Mexico: As an important trading partner of the United States, Mexico's automobile industry and manufacturing industry are developing rapidly. Its procurement needs are mainly concentrated in auto parts, electronic products, machinery and equipment, and plastic products.
(III) Asia
India: India is the largest economy in South Asia, with a huge demographic dividend and rapidly developing market potential. In terms of infrastructure construction and consumer goods market, India has a strong demand for construction machinery, electronic products, auto parts and chemical products.
(IV) Southeast Asia
Vietnam: In recent years, Vietnam has attracted a large amount of foreign investment with its low labor costs and superior geographical location. Vietnam's procurement demand has grown rapidly in the fields of electronic products, textiles and furniture.
(V) Eastern Europe
Russia: As an important economy in Eastern Europe, Russia's procurement demand is mainly concentrated in the fields of energy equipment, auto parts, electronic products and food.
(VI) Middle East
Saudi Arabia: As an important economy in the Middle East, Saudi Arabia has strong strength in the oil industry and infrastructure construction. There is a high procurement demand for energy equipment, building materials, auto parts and food processing equipment.
V. Areas where demand for commodity categories is accelerating
(I) New energy and environmental protection technology
As the world pays more attention to environmental protection and sustainable development, the procurement demand for new energy and environmental protection technology related products in emerging market countries has increased significantly. For example, the market demand for solar equipment, wind power generation equipment, water treatment equipment, etc. in Africa and other regions has continued to rise.
(II) Digital products and services
Digital transformation has driven the growth of demand for digital products and services in emerging market countries. The popularity of products and services such as smartphones, laptops, and cloud computing services in these regions has continued to increase.
(III) Medical equipment and drugs
As the medical level of emerging market countries improves and residents' health awareness increases, the demand for medical equipment and drugs is growing rapidly. The market demand for medical-related products and services, including diagnostic equipment, pharmaceutical equipment, and drugs, is expanding in these regions.
VI. The impact of growing procurement demand in emerging market countries on the global supply chain
(I) Supply chain diversification
The growth of procurement demand in emerging market countries has led to a more diversified global supply chain. Companies need to find more suppliers and partners around the world to meet the needs of different markets.
(II) Supply chain risk management
The growth of procurement demand in emerging market countries has also brought new risks to the global supply chain. Political instability, economic fluctuations, natural disasters and other factors may affect the stability of the supply chain. Companies need to strengthen supply chain risk management and formulate countermeasures to reduce risks.
(III) Supply chain digital transformation
In order to better meet the procurement needs of emerging market countries, companies need to accelerate the digital transformation of the supply chain. By applying technologies such as big data, artificial intelligence, and the Internet of Things, companies can improve the efficiency and transparency of the supply chain and better respond to market changes.
VII. Opportunities and challenges in the industry
(I) Opportunities
The market potential is huge: the growth of procurement demand in emerging market countries provides a broad market space for global companies.
Promoting industrial upgrading: In order to meet the purchasing needs of emerging market countries, enterprises need to continuously carry out technological innovation and product upgrading to promote industrial upgrading.
Strengthening international cooperation: The growth of purchasing demand in emerging market countries has promoted economic cooperation among countries around the world. Enterprises can achieve resource sharing and complementary advantages through cooperation.
(II) Challenges
Intense market competition: The growth of purchasing demand in emerging market countries has attracted the attention of many enterprises, and market competition has intensified.
Cultural differences and business practices: Cultural differences and business practices in different emerging market countries may pose certain obstacles to enterprises entering the market.
Regulatory and policy risks: The regulations and policies of emerging market countries may be imperfect or unstable. Enterprises need to pay close attention to policy changes to reduce risks.
VIII. Response strategies
(I) In-depth understanding of market demand
Enterprises need to have a deep understanding of the market demand and characteristics of emerging market countries and formulate targeted market strategies. Obtain market information and understand consumer needs through market research and cooperation with local partners.
(II) Strengthen supply chain management
Enterprises need to strengthen supply chain management and improve the efficiency and flexibility of the supply chain. By optimizing the procurement process, establishing good supplier relationships, and strengthening inventory management, the supply chain costs can be reduced and the response speed of the supply chain can be improved.
(III) Focus on product quality and innovation
In emerging market countries, consumers have higher and higher requirements for product quality and innovation. Enterprises need to focus on product quality, continuously improve the technical level and performance of products, and meet the needs of consumers.
(IV) Strengthen brand building and marketing promotion
Brand building and marketing promotion are important means for enterprises to enter emerging markets. By strengthening brand publicity, participating in international exhibitions, and conducting online marketing, brand awareness can be improved and brand influence can be enhanced.
(V) Establish a localized operation model
In order to better adapt to the business environment of emerging market countries, enterprises need to establish a localized operation model. By setting up local branches, recruiting local employees, and establishing a localized supply chain, the operating efficiency and market competitiveness of enterprises can be improved.
IX. Conclusion
The growth of procurement demand in emerging market countries is one of the trends in global economic development. This growth trend provides huge market opportunities for global companies, but also brings competition and risks. Enterprises need to have a deep understanding of market demand, strengthen supply chain management, focus on product quality and innovation, strengthen brand building and marketing promotion, and establish a localized operation model to seize market opportunities and achieve sustainable development. In the future development, the growth of purchasing demand in emerging market countries will continue to drive the development of the global economy and inject new vitality into global trade.