Emerging markets investing: Why localisation beats copy and paste

Capturing growth in emerging markets takes more than importing a successful developed-market model. Ahead of SuperReturn Middle East, William Bao Bean, Managing General Partner at Orbit Ventures, explains why investors should learn from proven emerging-market models, localise them and combine local founder knowledge with global reach.

High economic growth does not automatically translate into strong investment returns.

S&P Global projects that emerging markets will average 4.06% GDP growth through 2035, compared with 1.59% for advanced economies. By 2035, they are expected to contribute approximately 65% of global economic growth.

The question is how to translate this growth into returns.
William Bao Bean, Managing General Partner, Orbit Ventures

Emerging markets can grow quickly and offer fewer barriers from entrenched incumbents. However, they can also have less-developed infrastructure, opaque regulation, economic and political volatility and shortages of capital. These conditions require different solutions, and a different approach to investing.

At Orbit Ventures, our playbook centres on proven business models, local founders and an investment approach that prioritises sustainable sales and positive unit economics over repeatedly raising capital.

Learn and localise, don’t copy and paste

Over 30 years of investing in technology that expands access across emerging markets, I have learnt the importance of focusing on proven business models.

The challenge is that founders and investors have often tried to take what worked in advanced economies and apply it directly to emerging-market problems. This approach frequently falls short because developed-market solutions cannot simply be transplanted into emerging markets.

A stronger starting point is to learn from successful emerging markets such as India and China.

Don’t ‘copy and paste’ but instead work hand in hand with founders to ‘learn and localise'.
William Bao Bean, Managing General Partner, Orbit Ventures

The aim is to understand which elements of a proven model can travel and what must be localised. Success in one market is not proof that a model will work in another. Investors still need to assess whether local infrastructure, regulation, capital availability and market conditions can support it.

We also believe it is important to back founders native to the markets they serve. They bring local understanding, resilience and flexibility, as well as an appreciation that there is often more than one way to get things done.

Local knowledge needs global reach

Local knowledge alone is not enough. In our experience, the strongest approach combines local connectivity with global experience and commercial relationships.

Orbit Ventures partners with local investors and innovation ecosystems across emerging markets. We complement that knowledge with experience from other markets and relationships with global companies.

We call this “cross-border innovation arbitrage”: combining practices, operational approaches and business and monetisation models drawn from different countries, regions and continents.

When the time is right, we also help founders expand beyond their home markets. This can broaden a company’s opportunities and diversify its exposure so that its performance is not dependent on conditions in a single country.

Emerging markets need a different investment playbook. Combining local knowledge with global experience can help investors and founders build businesses capable of scaling across borders.

From Alibaba to AI: Digitising emerging-market SMEs

In its early years in China, Alibaba helped digitise small and medium-sized enterprises across traditional sectors, from factories selling across borders to businesses operating in retail, logistics, healthcare and media.

As the equity research lead for Alibaba’s first IPO in 2006–07, I saw how the business used technology to establish trust, remove friction and help SMEs grow.

Orbit Ventures is now applying elements of that model through its work with more than 50 companies using AI to address similar problems across Asia, Africa and Latin America. These businesses are using technology to optimise supply chains, logistics and sales.

Once trust has been established, the same underlying model can help SMEs sell not only physical products but also services, ranging from financial products to health insurance.

The technology may have changed, but the underlying opportunity remains the same: remove friction, establish trust and give smaller businesses access to customers and services that were previously difficult to reach.

Second-hand smartphones: Adapting a proven model

A smartphone is not a nice-to-have, but in emerging markets it’s a must-have for employment and education.
William Bao Bean, Managing General Partner, Orbit Ventures

In China, an ecosystem of companies developed around refurbishing and reselling second-hand phones imported from advanced economies. Some businesses also preloaded the devices with applications to generate additional revenue.

Orbit Ventures has backed companies adapting variations of this model in India, the Middle East and North Africa, sub-Saharan Africa and Latin America, helping them source smartphones and components from Asia and beyond.

The lesson is not to reproduce China’s model exactly. It is to identify the underlying need—affordable access- and adapt the sourcing, distribution and monetisation model to local market conditions.

Building an emerging markets investment playbook

Emerging-market returns are not produced by headline GDP growth alone. They depend on proven business models that can be localised; founders with deep market knowledge; positive unit economics; sustainable sales growth; and partnerships that combine local connectivity with global experience.

Cross-border expansion can broaden the opportunity further, but it should take place only when the company, its founders and the underlying model are ready.

The opportunity in emerging markets is significant. Capturing it requires investors to understand which lessons can travel, and which parts of the playbook must be rewritten for every market.