More Money In Emerging Market

When the Korean auto manufacturer Granbird and Hyundai saw Ghana to be the great beacon hope for commerce, it did not make bones about pitching camp in Ghana. A country located in Africa prides itself for stable democracy and emerging market.

The South Korean company manufactures coaches saw that most of the coaches on Ghanaian highways were rickety sometimes breaking down on the road. Even breakdown was even good so to say the least. The risk of decrepit buses was high. The company surveyed that the market was ripe but transport owners did not have funds to buy the brand news buses. Neither the financial institutions were willing to give out loans to fund such risky business because the country had attained notoriety of road fatalities. The question is: should the Korean manufacturer go back to Seoul?

The company revised its business model and decided to deal directly with those who wanted to own their coaches. One coach costs around $150,000. What the company did was that instead of the prospective owners going to borrow from the banks where interest rate was as high as the rising sky, decided to lease the vehicles directly to transport operators and spread the cost over a number of years with payment made monthly.

When the news became public, most people took advantage of the offer and almost all coaches on Ghana's highway got replaced because car owners could purchase coaches under a hire purchase and be paying a minimum monthly payment.

A year later, a Chinese automaker called Yutong bought into the process model and is also offering car owners a flexible deal in acquiring buses.

It is not wrong to say that businesses that adjust to the realities on the ground would conquer the emerging markets. This explains why some companies have found emerging market as a fertile ground for giant take off. It is so because the rules of the game had been rewritten to meet the inescapable realities.