Make your mark
in emerging markets

Let's go!

Make your
mark in
emerging
markets

Make your
mark in
emerging
markets

Innovation opens new opportunities for both local and foreign entrepreneurs.
Here’s an interactive view.

Innovation opens new opportunities for both local and foreign entrepreneurs.
Here’s an interactive view.

In emerging countries, startups respond to socio-economic issues related to mobility and, especially, education. An interview with Alisée de Tonnac - CEO of Seedstars World - and Rico Baldegger - head of Fribourg School of Management.

The South's
enormous potential

Emerging and developing countries have skipped landline telephones and gone directly to mobile.

The South's
enormous potential

Emerging and developing countries have skipped landline telephones and gone directly to mobile.

430
million new Internet users will be living in only 10 countries by 2020: Mexico, Brazil, Nigeria, Egypt, Turkey, India, China, Vietnam, Indonesia and the Philippines.

Source: internetlivestats.com, World Bank

430
million new Internet users will be living in only 10 countries by 2020: Mexico, Brazil, Nigeria, Egypt, Turkey, India, China, Vietnam, Indonesia and the Philippines.

Markets with the strongest growth in smartphones, by value

Source: internetlivestats.com, World Bank

Industrialized countries will disappear from the top 10

Markets with the strongest growth in smartphones, by value

2014

1 China
2 USA
3 Japan
4 Brazil
5 UK
6 Germany
7 India
8 South Koreau
9 Russia
10 Italy

2015

1 India
2 China
3 Indonesia
4 South Africa
5 Brazil
6 Pakistan
7 Nigeria
8 Egypt
9 Vietnam
10 Bangladesh

Source: World Bank

80%
of the world’s smartphones will be in the emerging markets by 2020.

Source: IDC 2014

87%
of global population will live in the emerging markets by 2030.

Source: World Bank, 2014

In Africa, the number of smartphone users has multiplied by 42 in 15 years

N.B: In 2000, 16.5 million Africans used a mobile phone and 9.2 million had a landline.

Source: www.e-education.psu.edu

Nigeria is already digital

38%
of the population is connected to the Internet

Source: www.wearesocial.sg

183.5

million inhabitants in Nigeria

50%

of the population is urban

75%

of the population owns a mobile phone

70.3

million active users of Internet

13.6

million active social media accounts

12.4

million mobile accounts on social media

40%

of Kenya’s GDP comes from mobile transactions (the majority using M-Pesa).

Who pays by mobile phone?

Percentage of population by region using electronic money in december 2014

Europe and Central Asia

14%

Middle East and North Africa

46%

East Asia and the Pacific

63%

Latin America and the Caribbean

65%

South Asia

75%

Sub-Saharan Africa

81%

Source: gsma.com

Social networks:
an unequal success

In Turkey, 89.4% of Internet users visited Facebook in February 2015. The next highest penetration rates are Uruguay, Brazil, Thailand, United States and Germany.

Social networks:
an unequal success

In Turkey, 89.4% of Internet users visited Facebook in February 2015. The next highest penetration rates are Uruguay, Brazil, Thailand, United States and Germany.

        Country Penetration rate
1 Turkey 89,4%
2 Uruguay 88,1%
3 Brazil 83,8%
4 Thailand 74,9%
5 UK 66,1%
6 Germany 64,3%
7 USA 63,3%
8 Australia 60,1%
9 India 57%

Source: Statista

China: the WeChat phenomenon

With Facebook blocked by the government, China has launched its own social networks, including the application WeChat with its countless functions: messaging, electronic payments, taxi booking, e-commerce, etc. The WeChat concept served as the model for Messenger.

Russia: Vkontakte, network of the young

Vkontakte, or VK, ranks 25th in the world’s most visited websites. VK started as a social network for students, before spreading to the general population. Unlike Facebook, which now mainly attracts people in their 40s, VK has conserved its clientele of young adults.

South african internet users spend an average 3.2 hours per day on the networks

120

million people used Facebook each month in Africa in 2015, over 80% of whom through mobile phones.

4.5

million of these users are in Kenya;
15 million, in Nigeria;
12 million, in South Africa.

9%

of Africans use social media. South Africans are the world’s most committed social media users.

The entrepreneurs
revolutionizing
emerging economies

Ten promising start-ups selected by Seedstars World talk about their beginnings, objectives and the challenges of their particular entrepreneurial ecosystems.

Salarium: HR solutions for emerging economies Philippines

Born in Manila, Salarium, founded in 2013, provides human resource solutions adapted to emerging countries for small and large companies. "I founded this startup to transform the service of outsourcing salary payments that my previous company developed,” says founder Judah Hirsch. “From the relatively simple business model of software leased to companies (SaaS), we have evolved into a hub and spoke model centered on a financial solution that creates a market for B2B and B2C.”

Once we have anchored our business locally, we will seek partnerships and investments to fuel expansion.

Juabar Design: charging mobile phones with the sun Tanzania

The overwhelming majority of Tanzanians have mobile phones. But very few of them have access to the national grid. As part of her “Design Strategy” MBA at the California College of the Arts in 2011, the American Olivia Nava developed a project in Tanzania to provide access to electricity. Two years later, she co-founded Juabar Design to build and rent to local entrepreneurs dozens of mobile kiosks throughout rural areas.

The goal is to create a large network distributing energy. We are currently working in Kenya to finalize the products.

Diseclar: furniture from recycled plastic Colombia

Terraces, benches, alcoves, footbridges - whether for private or public use, such things are usually made out of wood. But Juan Nicolas Suarez had another idea. Engineer at a company producing PET bottles, Suarez noted “the enormous problem of plastic waste in the world today”. Having always dreamed of starting his own business, in 2014, the Cali, Columbia native created Diseclar, a startup that recycles plastic waste and vegetable fibers into planks, beams and other composite materials that imitate wood.

I was working for a large company and had a good salary. To give that up was a great challenge.

eFishery: smart aquaculture Indonesia

For Indonesian fish farmer Gibran Huzaifah Amsi El Farisy, it all began with the observation that fish feed is not only his industry’s main expenditure, but also its main source of concern. His solution is eFishery, a device integrated with a smartphone or computer that measures the appetite of farmed fish and shrimp to deliver the exact amount of food needed – cutting feed costs by 21%.

With 250 million people and a young population that easily adopts new solutions, Indonesia is a fantastic market.

Eye Care Plus: better sight through an app Armenia

From desktops to smartphones, tablets to TVs, screens have invaded our lives. This exposure is not without its impact on health - especially, on the human eye. In 2013, Pavel Snkhchyan and a group of software developers in Armenia came up with Eye Care Plus, an app that helps detect vision problems, offers exercises to maintain good vision and makes people more aware of eye diseases.

IT is one of the fastest growing sectors in the Armenian economy.

doctHERs: a bridge between women doctors and poor women Pakistan

The young doctor Sarah Khurram gave up a medical career to devote herself to her start-up, doctHERs, co-founded in 2015 in Karachi. Two clinics opened that same year. The concept: with the help of nurses’, partner doctors hold video consultations with hospital patients online. The platform has already provided care to hundreds of patients.

Security and geopolitical issues affect the willingness to invest in the country. It will take some years, but this is the way. The proof: Karachi now has its first incubator.

‘Uberizing’ logistics Peru

Ever had the headache of getting a package to the other side of town? Urbaner, a start-up based in Lima, aims to provide a faster, more secure courier service. “I faced the same problem every day at work. To send a document across town, I had to use taxis - expensive and inefficient,” explains Ivonne Quinones, co-founder and CEO. Couriers registered with the Urbaner logistics platform adapt delivery to location and package size, going on foot, by bicycle or motorbike, as needed.

We are currently focusing on consolidating our operations in Lima to be able to grow our business.

SimplePay: a local ‘Paypal’ on the rise Nigeria

A graduate of the Federal University of Technology, Owerri, Simeon Ononobi taught himself to code. Ononobi has been a tech entrepreneur since he was 16: in 2003 his project BUMP (Back Up My Phone) was the first system in Nigeria to backup mobile phones. Created in 2013, his SimplePay platform allows users to make payments online with no more than an email address and a bank account. Over 60,000 transactions are now made on SimplePay each month.

My goal is to change the way consumers consider online payment.

Totus Power: lighting schools with car batteries Chile / USA

Could industrial solutions be applied directly to help schoolchildren in developing countries? This was the challenge launched by Siva Rajendran, an Indian engineer based in Santiago, Chili. In the United States, Rajendran quickly developed Totus Power, based on the product he knows best: batteries for electric automobiles. By adapting the batteries, he is able to provide sustainable electricity for students and school educational materials. A first client was quickly found: an NGO providing equipment to schools in a number of developing countries.

First, we’ll see if the product corresponds exactly to needs in the field and improve if need be, before seeking other opportunities.

HackerEarth: a platform for programmers India

On what criteria are the best web developers recruited? Pure talent, right? Not necessarily, say Sachin Gupta and Vivek Prakash, two Indian students who watched the best in their class being snubbed by recruiters from large firms. Gupta and Prakash launched HackerEarth, a website where programmers can train, test skills, challenge themselves, build a network and profile for headhunters, search for jobs that match skills. From project, HackerEarth has become a reality.

When we started, entrepreneurship was just beginning to be accepted as a career option in India.

Emerging countries
seize innovation

Thanks to reverse innovation and leapfrogging, markets in developing countries skip steps and go straight to the latest technology.
The potential is huge.

Emerging countries
seize innovation

Thanks to reverse innovation and leapfrogging, markets in developing countries skip steps and go straight to the latest technology.
The potential is huge.

So, you think innovation is something that happens in developed countries, with manufacturing outsourced to emerging markets? Well, think again. More and more companies are choosing to develop their products directly at the production site. And all these products have one thing in common: they have the same quality as those manufactured for customers in rich countries - but are designed to operate at a lower cost.

Frugal innovation

Frugal innovation is inspired by the Indian concept of Jugaad (translate it as “life hacking” or “working around”), an approach adapted to environments where the lack of resources compels entrepreneurs to invent solutions that are simple, ingenious and cheap.

For example, GE Healthcare, a joint venture between General Electric and the Indian software maker Wipro, strives to develop solutions for the 600 million Indians who have no access to adequate healthcare. To overcome the lack of incubators for premature babies, the joint venture has designed “heaters” adapted to the unstable supply of electricity. This technique has helped cut infant mortality in half at Vanivilas Hospital in Bangalore.

Other initiatives: the cheap scales designed for emerging markets by Mettler-Toledo, the Swiss-American expert in precision weighing instruments, in the late 1990s; or Logitech’s basic computer mouse, the M215, originally developed for the Chinese market.

Frugal innovation

Frugal innovation is inspired by the Indian concept of Jugaad (translate it as “life hacking” or “working around”), an approach adapted to environments where the lack of resources compels entrepreneurs to invent solutions that are simple, ingenious and cheap.

For example, GE Healthcare, a joint venture between General Electric and the Indian software maker Wipro, strives to develop solutions for the 600 million Indians who have no access to adequate healthcare. To overcome the lack of incubators for premature babies, the joint venture has designed “heaters” adapted to the unstable supply of electricity. This technique has helped cut infant mortality in half at Vanivilas Hospital in Bangalore.

Other initiatives: the cheap scales designed for emerging markets by Mettler-Toledo, the Swiss-American expert in precision weighing instruments, in the late 1990s; or Logitech’s basic computer mouse, the M215, originally developed for the Chinese market.

Reverse innovation

When products developed in the South are, then, sold in the North, it is called “reverse innovation”. For the construction of social housing in France, cement manufacturer LafargeHolcim now proposes low-cost materials using techniques developed for India, Indonesia and Latin America.

Another emblematic example is the Dacia Logan, Renault’s “car for the poor”, designed in Romania for emerging markets and, now, sold everywhere. Renault-Nissan CEO Carlos Ghosn says this strategy will be a key trend in developed economies in the coming years.

Reverse innovation

When products developed in the South are, then, sold in the North, it is called “reverse innovation”. For the construction of social housing in France, cement manufacturer LafargeHolcim now proposes low-cost materials using techniques developed for India, Indonesia and Latin America.

Another emblematic example is the Dacia Logan, Renault’s “car for the poor”, designed in Romania for emerging markets and, now, sold everywhere. Renault-Nissan CEO Carlos Ghosn says this strategy will be a key trend in developed economies in the coming years.

The leapfrog

Another pattern of technological development in emerging markets is “leapfrogging”, that is, a technical leap that jumps over intermediate steps to go directly to the most modern development. One example: in many emerging nations, mobile telephony has emerged without fixed networks ever having been installed in rural areas.

In Kenya, the company BRCK has launched a mobile modem suitable for dusty and humid environments. The device uses Wi-Fi terminals and allows 20 devices to connect to the Internet via the 3G network.

“Leapfrogging” can also be seen in online access to consumer goods, with no need to build stores and malls. African online shopping sites like Konga and Jumia, similar to Amazon, have carved out the lion’s share in this area. In India, seven e-commerce groups are already worth over a billion dollars, including Flipkart, Snapdeal and Shopclues.

This boom in e-commerce is reinforced by the development of mobile payment. The smartphone is a driver today like the steam engine was in Europe in the 19th century. For example, the Swiss fintech company KiWi, co-founded by Christian Sinobas, allows small merchants to accept customer credit cards from a smartphone equipped with a mobile app and a card reader connected to the phone through the audio jack. Fintech services are expanding to include cash register functions, the sale of prepaid recharge for telephony and providing credit in association with a local bank.

This boom in e-commerce is reinforced by the development of mobile payment. The smartphone is a driver today like the steam engine was in Europe in the 19th century. For example, the Swiss fintech company KiWi, co-founded by Christian Sinobas, allows small merchants to accept customer credit cards from a smartphone equipped with a mobile app and a card reader connected to the phone through the audio jack. Fintech services are expanding to include cash register functions, the sale of prepaid recharge for telephony and providing credit in association with a local bank.

Under the supervision of Myret Zaki and Dino Auciello

Authors
Dino Auciello
Matthieu Hoffstetter
Mary Vakaridis

Graphism
Pierre Broquet
Sarah Duvillard

Pictures editor
David Huc
Cendrine Pouzet

Edition
Inès Girod

Translation
Sarah Meyer de Stadelhofen

Integration/
development

Geoffrey Raposo

Contact
Myret Zaki, chief editor of Bilan
Rédaction Bilan
11, rue des rois
1204 Genève
bilan@bilan.ch
Tél. +41 22 322 36 36

Advertising
Tamedia Publications romandes
Cellule produits numériques
digital.commercial@sr.tamedia.ch
Tél. +41 21 349 40 48