From volume to value: how to thrive in emerging markets

As an affiliate with a focus on emerging markets, I’m often asked if there’s a secret to growing quickly in emerging markets.

Over the last three years, Already Media has expanded from a startup to a team of more than 250 people, and this has been achieved almost exclusively in so-called emerging markets, particularly in Asia, Latin America and parts of Africa.

Sorry to disappoint, but there isn’t a single big secret to emerging market success. What there is, however, is a mindset that differs quite significantly from how I see affiliates approach more established igaming regions, particularly in Europe.

Here are five areas to consider.

Rewrite your Tier-1 playbook

One of the biggest mistakes I see affiliates make when entering emerging markets is applying a one-size-fits-all strategy based on their previous Tier-1 market experiences.

What works in mature markets often doesn’t translate well in new, evolving environments. For instance, following a strategy focused around a heavy reliance on high-value, long-term players is unlikely to work when player values are considerably lower.

Similarly, the channels through which you acquire players are probably going to be radically different. You need to be flexible and willing to think on your feet. Experiment and see what sticks –you may well be surprised.

Pick the right markets

There’s a whole world out there and picking the right emerging markets to focus on can be the most important decision you’ll make.

The problem is there’s no one solution here. Above all, it’s critical you take an honest look at your business’ strengths and weaknesses. And I mean be brutally honest. If you delude yourself at the outset, you’ll pay a heavy price further down the line.

Then try to understand where your strengths intersect with the landscape of the market you are exploring. The right market should match your capabilities across everything from language to payment solutions.

And finally, make sure the market you select is ready to emerge. Are there reliable and active operator partners? Is the wider economic outlook positive?

It may be exciting to find somewhere without much competition, but there may be a good reason why others haven’t yet taken the plunge.

Emerging ≠ lawless

I sometimes see people use the term ‘emerging markets’ as a kind of code for markets where anything goes.

It’s a misconception that emerging markets lack regulation and are a free-for-all for affiliates. While regulations in these markets may be less developed, they’re still evolving, and often with a focus on responsible gambling, tax compliance and player protection. In short, the same type of issues we face in more mature jurisdictions.

Affiliates need to tread carefully. You don’t want to risk future reputational damage or legal issues as regulations develop.

We’re firm believers in establishing best practices early on, even if a market doesn’t yet have the regulatory framework in place to enforce them. When we enter somewhere new, it’s for the long-term and that means earning the trust of players and partners from the very beginning.

Not all FTDs are born equal

It’s easy to get fixated on FTD or traffic numbers, but don’t lose sight of your bottom line.

Emerging markets can offer up opportunities to drive huge growth in FTDs in a short space of time, but the value of these players is likely to be significantly lower than you might be used to in Tier-1 markets.

South Asia is a good example. We put the LTV of an average user in the region at about $30, around a quarter of what you might expect in a mature, European market.

But that’s fine, given the sheer size of the market. The equation is a simple one: if you can refer four FTDs for every one you send in a European market, and at a reduced overall cost, the market will prove more lucrative.

So don’t obsess over raw numbers; make sure every decision you take is put into the wider context.

Emerging markets eventually emerge

You may need to ask yourself some tough questions if you want your success in an emerging market to continue.

For instance, do you have a transition plan for when the market regulates? And will your approach to the market stand up to increased competition that will likely follow?

Building a strong brand and presence in an emerging market is only the first part of the challenge. We’ve always been willing to adapt and experiment when doing this.

It might mean a change of approach; it will almost certainly require greater investment. But we never lose sight of the fact that there’s an even bigger prize to be won if you can capitalise on your position as a market matures.

Markets evolve. Make sure you evolve alongside them.