Glenn Porter, general manager international identity verification at GBGroup, examines the opportunities and risks of trading with the MINT population of Mexico, Indonesia, Nigeria and Turkey.
Over the past decade we’ve heard about the BRIC nations of Brazil, Russia, India and China and their position as the top four growing economies in the world.
However, despite their double-digit growth over the years, this slowed during the global economic crisis. Economist Jim O’Neill, who coined BRIC, has now turned his attention to the investment opportunities in the MINT countries. An acronym for Mexico, Indonesia, Nigeria and Turkey, these are now the nations which are widely considered as the next emerging economic giants, offering a plethora of potential for exports, goods and services across the world, including the United Kingdom.
Research released this month from the National Business Awards’ Business Without Barriers report surveyed 500 business leaders from across the UK and results showed that 80 per cent believed that exports are the key to Britain’s future prosperity. However, just 4 per cent of those surveyed identified MINT countries as notable targets.
Are businesses missing an opportunity? With their youthful populations and high internet usage (all four of the MINT nations are in the world’s top 15 largest internet populations), the MINT nations offer e-commerce opportunities for businesses no matter the size. It is not just large enterprises which can benefit from trading with these countries; the market is open for companies of all sizes to enter.
One of the fundamental keys to the success of these countries lies in their geographical positioning. Their site and situation, with Mexico’s close proximity to the USA, Indonesia’s to China and Turkey’s position within the EU in addition to being within a Single Euro Payments Area (SEPA) put these nations in prime position to take advantage of their respective large markets nearby. Additionally, Mexico, Indonesia and Turkey are all under stable inflation and public finances. Mexico, Nigeria and Indonesia are in the G20 bloc of developing nations, bringing together the major advanced and emerging economies which represent approximately 85 per cent of global GDP.
More on the MINT nations:
Advancements in technology have seen the MINT countries begin to expand in to new telecommunications infrastructures, most notably mobile networks. The rise in cheap smartphones and mobiles has resulted in the MINT populations having increased internet access. Mobile internet access is affordable, where previously a traditional computer and a broadband connection would have been a much larger expense for a large sector of the population. Indeed, Indonesia’s number of internet users is expected to double to 125 million by 2017, with Redwing predicting that the number of smartphone owners will rise from 20 per cent to 52 per cent in the next three years. In Nigeria, Vodacom, the pan-African mobile telecommunications company of which Vodafone is a parent, are planning to support the mobile communications market. With an increase in connectivity in the emerging, more affluent middle class of the MINT countries comes an increase in ecommerce.
However, sophistications in technology can also mean more sophisticated fraud. Selling online and exporting comes with a high risk. Turkey’s high level of credit card penetration means that a large number of fraudsters use a fake card, and with weak identification systems in place, this can result in losses for businesses that are unable to identify their customers accurately. This can significantly impact on small businesses which fall victim to fraud. And it’s not just fake cards retailers have to worry about – false-proxy IP addresses are another tactic that can be used to shadow true identity.
The potential in the MINT countries is huge, and businesses should take advantage of the opportunities that such nations offer. However, they need to be approached with caution. Assessing risk is a given part of any new business venture and never more so than when entering a new market, particularly one in an up-and-coming region, where the infrastructure, bureaucracy and social-economic environments are diverse.
Businesses need to understand their customers and be able to prove they are who they say they are to enable secure and open trading. With the MINT populations expected to produce the most millionaires this year, surpassing both the BRICs and the G8, the wealth of these countries is growing. It’s time for businesses to make a mint.