Video: How to do business in frontier markets
![](https://assets.weforum.org/article/image/large_iHpe2vTVCKyFAUT-7QsyiDfVihGyhZECy5zw6TpRtQ0.jpg)
![A hand holding a looking glass by a lake](/uplink.jpg)
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:
Geo-economics
You can make money and do good, says John Riady as he weighs up the risks and rewards of doing business in a frontier market. In this World Economic Forum video, Riady, who is Executive Director of the Lippo Group, says while it’s not easy doing business in a frontier market – there can be rich returns.
Watch the full interview above, or read extracts below.
On Frontier Markets
I think frontier markets are some of the most challenging but also rewarding markets to do business in. First of all you have a unique market where normally there’s a huge gap between supply and demand. You have a middle class that is just emerging, you have also a society where people are just becoming more educated.
On the other hand it is also a market that has no supply. Normally the supply of goods, the supply of housing, the supply of mortgages, the supply of anything for that matter is very low. So you have the supply and demand gap, that any company that is able to bridge that stands to create value.
On the risks of frontier markets
Often what breaks companies is the social and political issues. Sometimes companies have great productions, they have great execution strategies, but then they forget that one social issue here, or one political explosion there, can eliminate what you’re doing.
The other risk is just a lack of hard and soft infrastructure. Hard infrastructure, roads and ports and electricity. The Soft infrastructure is human capital. You will face challenges in finding the people from the local area in trying to operate those businesses. All these challenges also serve as a barrier to entry. Some of these other markets are difficult to enter, but once you’re there, you’re protected by higher barriers to entry.
On the benefits of frontier markets
The windfall is not only in terms of your financial bottom line. You can achieve that, but also achieve a significant social contribution. It’s not Corporate Social Responsibility (CSR), more thinking about it as stewardship, so the business itself must be a good thing and must contribute to social progress. And that’s the beauty of what you are able to do doing business in Asia and frontier markets.
Author: John Riady is Executive Director, Lippo Group, Indonesia
Image: A man waits for M-Pesa customers at his shop in Kibera in Kenya’s capital Nairobi December 31, 2014. REUTERS/Noor Khamis
Don't miss any update on this topic
Create a free account and access your personalized content collection with our latest publications and analyses.
License and Republishing
World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.
The views expressed in this article are those of the author alone and not the World Economic Forum.
The Agenda Weekly
A weekly update of the most important issues driving the global agenda
You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.
More on Geo-Economics and PoliticsSee all
Venetia Bell and Jane Burston
August 19, 2024
Marianna Lillo and James Purcell
August 19, 2024
Patrick McMaster
August 14, 2024
Simon Torkington
August 9, 2024
Simon Torkington
August 5, 2024
Emma Charlton
July 26, 2024