Go East Young Man

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New York – The Wall Street Journal reports today that Yum Brands, parent of KFC and Taco Bell, is approaching a milestone where more of its sales comes from China than the U.S.  The rise of domestic consumption in emerging markets countries is one reason why an increasing number of primary research firms are focused on emerging markets.

The theme of consumer growth in emerging markets, reported by the WSJ to be 6% compared to 1-2% for developed economies, is an important investment theme.  Riedel Research Group, an independent emerging markets specialist based in New York, has been trumpeting this theme for over eighteen months, going so far as to collaborate with  Van Kampen to set up unit trusts designed to profit from the trend. 

Primary research firms have been increasing their emerging markets capabilities.  OTR Global, a U.S. based channel checker, has built a significant presence in China.  In addition, we know of channel checkers, such as Access Pointe, which are exclusively dedicated to China.  JLM Pacific Epoch, formerly JL McGregor, is a Shanghai-based primary research firm with good project capabilities.  Firms like JLJ Group and China Market Research, which mainly work with corporate clients, are not channel checkers but offer extensive local market capabilities.

There are also a number of primary research firms with emerging markets capabilities generally.  One example is Ergo, a New York-based emerging markets specialist, which was originally a spinoff of Gerson Lehrman Group’s consulting arm.  Another interesting entry is Foglamp, a Washington-based emerging markets specialist which is affiliated with an NGO focused on improving transparency in developing economies.

As emerging markets continue to power future growth, research capabilities will also grow with much of that coming from independents specializing in specific geographies or sectors.

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