Tech innovation is often cast as a race between Silicon Valley and China, yet one shouldn’t sleep on emerging markets.
Tech success in emerging markets is often attributed to second-mover advantage rather than innovation: emerging markets are believed to have lower labor costs and can quickly copy and reproduce technology invented elsewhere. Yet large numbers of emerging markets companies are erasing these assumptions, according to research from Boston Consulting Group.
These companies are showing that tech and innovation are tools, products and services designed to be tailored to specific needs. Their transformative business models based on tech gains have gotten real traction as the public adjusts to new pandemic norms.
The “one retail” approach by M.Video-El Dorado Group, which combines digital channels with more than 1,000 brick and mortar stores via smart phone, helped the company to double online sales this year. The initiative of Russia’s biggest consumer electronics store to merge its on- and offline stores into one seamless customer experience resulted in M.Video being named retailer of the year in the 2020 TCG Awards, known as the Oscars of technical consumers goods.
Innovation has not only come to Russian consumer electronics but food retailers, as well. X5 Retail Group, the country’s largest food retailer, opened its first cashierless store this year called “On the Fly,” which is targeted to customers who are looking for a quick and contactless shopping experience. To enter the fully digital store, customers can download an app, login and scan their products via different methods including card, Apple Pay or Google Pay.
The ability to shop quickly and without unnecessary social interactions is just what customers need during the coronavirus pandemic, the food retailer said.
Tinkoff, Russia’s completely online bank, also saw its trailblazing approach gaining recognition. The bank, which has pushed ahead with its digital model for the past 14 years, recently surpassed its 12 millionth customer. It was named the world’s best consumer digital bank in Central/Eastern Europe by Global Finance Magazine.
Entrepreneurial roots and the will to spend years developing faster, smoother, superior experiences from everything from stereo sales to banking had certainly seen success in Russia prior to the pandemic. But the advent of pandemic-related restrictions has shown the problem-solving skills of industry leaders in action. They have risen to the challenge.
The raft of year-end tech-focused awards for Russian companies underlines the success of tech in emerging markets. And it shows that emerging markets are not only becoming increasingly nimble in their abilities to deploy the latest instruments in technology, but are in many ways leading the way in the digital revolution.