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What Second Cup's Expansion Plans Mean For Other Canadian Companies

Second Cup logo
Second Cup, Canada’s very own coffee shop, is now tapping into Middle East for growth. The company opened its first café in Islamabad and Pakistan in June with plans to open 20 more in the next 3 to 5 years. This will help Second Cup shift away from the Canadian premium-coffee sector that’s dominated by Starbucks and enter a market that its Seattle-based rival will have difficulty following.
Here’s why other Canadian brand should also penetrate developing markets:
  1. Foreigners like Canadians.

    According to Jim Ragas, president of Second Cup International, people are fond of Canadians. By tapping into foreign marketers such as Pakistan, Canadian brands can fulfill consumers’ desire for western culture. Moreover, Canadian brands can avoid repercussions that American companies may encounter. For instance, Kentucky Fried Chicken had 60 stores shuttered in Pakistan during anti-American protests last year. That said, Canadian brands on the other hand, continue to nurture warm relationships with countries in developing markets. For example, Canada contributed $71.8 million to Pakistan’s flood 2 years ago. By assisting each other, Canada continues to foster long-term relationships with foreign nations.

  2. Growing markets.

    According to Business Insider, developing countries such as Uganda, Cambodia, and Iraq are world’s fastest-growing countries. Mongolia in particular is leading the pack by attaining 13.60% GDP growth rate. This is over 4 times greater than Canada’s 1.5% to 2% underlying growth rate. Moreover, according to Ernst & Young, emerging markets will consist 70% of the world’s growth, with China and India accounting for 40%. For businesses, this translates to enormous business opportunities. By becoming first-movers in emerging countries, Canadian businesses can achieve the following:

    • Gain major market share in the near future due to a lack of competition.
    • Attract consumers’ attention and mind shares easily because of a limited amount of competitors.
    • Reduce advertising costs due to a lack of competition for advertisements.
  3. Larger populations.

    Bangladesh alone has 150 million people. This is over 4 times greater than Canada’s population of 35 million people. By expanding into emerging countries and capturing even a tiny portion of the market, Canadian businesses can gain tremendously. This is why multinationals such as Uniqlo have entered countries like Bangladesh where a small slice of the middle class could convert into a boatload of revenue. Furthermore, with 80% of the global middle class purchasing power expected to come from developing areas such as Asia, Canadian brands must shift their focuses to emerging countries. 

  4. Poverty reduction.

    Poverty is slowly improving in emerging economies. Although countries such as Bangladesh are still extremely poor, its poverty level and economy are enhancing. According to Canadian Business, Bangladesh’s economy grew by an average of roughly 6% between 2000 and 2010. Moreover, its poverty rate decreased drastically during the same time period from 49% to 32%. Moreover, if this improvement continues, developing nations such as Bangladesh could become one of the world’s largest consumer markets.

By following the footsteps of Canadian brands such as Second Cup, Canadian companies can explore whole new markets that could generate astronomical returns. In addition, Canadian brands can get themselves prepared for what they’re about to endeavor in the near future: fight for marketing share in developing consumer markets as they’ll dictate the global economy. By quickly entering foreign markets and setting the ground, Canadian brands will be able to get ready to battle for market share against multinationals across the globe.