by Radu Magdin
While lacking the advantages of pre-existing global giants nurtured mainly in the Western world (many during previous eras of heavy state protectionism and encouragement), these emerging market champions appear through an almost Darwinian process to deliver innovation, competence and added value in new ways. Their products and services are better tailored for the challenges and specificities of their original market, and their path to growth reflects the advantages and disadvantages of local players including with regards to access to capital, local knowledge, human resources and fruitful stakeholder interactions. Those champions that expand regionally and then globally have entered a select club of multinationals with the advantage of having charted new paths to prosperity and initiated a rethinking of business that brings them in tune with the realities of the fastest growing economies on the planet.
Many emerging market champions grow by solving problems that formal institutions in their countries have left unaddressed or insufficiently addressed. Amenities taken for granted in the West may be missing and they become the starting point for new pipelines of products and services. In their home markets, firms like Grab in Southeast Asia (a super-app operator integrator of several services that is actually Singaporean) and Jumia (e-commerce) in Africa built entire ecosystems around solving the last-mile trust deficit, creating their own logistics and payment infrastructure where none existed. Chinese electric vehicle manufacturers, BYD among them, engineered battery technology for a price-sensitive domestic middle class before considering any international move. By 2026, both Chinese and Indian firms have begun investing heavily in R&D to escape the price wars at home that were squeezing margins beyond survivability (good for consumers in the short term) and thereby differentiating themselves before they reached the regional and global stage.
Regional expansion for these companies follows a logic of similarity rather than ambition. These firms first identify mirror markets, countries that share comparable income levels, demographic structures, or regulatory conditions, and use an anchor country as a hub from which to reach neighboring consumers. Airtel applied the low-cost “Minutes Factory” model it had refined in rural India (where low tariffs deliver huge network usage increases) to sweep through Sub-Saharan Africa, where market conditions closely resembled those it already knew. In the 2025 to 2026 trade climate inaugurated by the Trump Administration’s Liberation Day tariffs (and arguably before that through the incipient friendshoring efforts post-pandemic), Vietnamese and Malaysian electronics firms have grown by positioning themselves as overflow partners to Chinese manufacturing, absorbing redirected trade flows from geopolitical realignments. Mexican companies are also setting up to benefit significantly from this, with a huge increase in imports from China in recent years ($133 billion in 2025, with a $111 billion deficit) reflecting redirected trade flows to take advantage of the USMCA trade space which is up for renegotiation in 2026.
Many emerging market champions practice what the specialty literature calls “strategic ambidexterity”: they extract returns from existing low-cost advantages while simultaneously testing new regional technologies to stay ahead of local competitors who would otherwise copy their model within a few product cycles. Just like startups in Western economies, they start off with much lower financial burdens and overhead and have the opportunity to be much nimbler because of it (though this is difficult to achieve in practice). I remember my shock in learning that many classic US giants had their own defined-benefit pension funds for employees and were running essentially parallel privately funded social services schemes. Many of these companies later encountered significant difficulties with these operations that had to be taken over by the authorities, and which required reorganization that distracted company management from the business side.
Global expansion for emerging market champions is not just about exporting products, but rather about acquiring capabilities. Tata Motors purchased Jaguar Land Rover to gain immediate brand credibility and technical knowledge it could not have built domestically in the same timeframe. Hesai, a Chinese firm, embedded its LiDAR technology into the international autonomous vehicle supply chain and now holds a dominant global position. A separate category of firms bypassed the local-first trajectory entirely. TSMC and SK Hynix operated from the outset as suppliers to the global AI and semiconductor industry, firms whose domestic market is, in practical terms, the world. Brazilian and Indian software and fintech (India’s UPI and Brazil’s Pix in payments) follow a parallel path, scaling globally with near-zero marginal cost by using digital infrastructure and turning out exportable blueprints for other countries in the process of building out their own financial systems.
The financial architecture behind this expansion differs substantially from the Western model. Sovereign wealth funds from the Middle East and Southeast Asia, including Saudi Arabia’s PIF, Abu Dhabi’s ADIA, and Singapore’s Temasek, have moved beyond passive investment into active venture building, providing the long-term, high-volume capital that industries like green hydrogen or semiconductor fabrication require. By 2026, Middle Eastern sovereign funds are channeling green financing toward emerging market champions building gigafactories in developing regions, a route that sidesteps the stricter ESG compliance frameworks that Western capital markets impose. The lack of strength in traditional capital markets (for publicly traded bonds and stocks) have made private capital access much more important. Some of this capital can be global, but other sources can be local, leveraging extended family and clan concerns. Large conglomerates such as Reliance in India and Dangote in Nigeria operate internal capital markets, directing cash flows from mature business units toward high-growth subsidiaries, insulating them from the funding cycles whose vagaries would quite likely eliminate standalone startups. In Latin America and Africa, firms increasingly settle cross-border transactions using stablecoins, primarily USDC and USDT, to bypass dollar shortages and avoid the high cost of traditional remittance channels.
The diaspora has become a structural element of market entry rather than simply a source of remittances. Senior professionals from emerging market countries working inside Western multinationals often serve as the first points of contact for home-country firms entering complex or unfamiliar markets, providing cultural translation and regulatory knowledge that outside consultants cannot easily replicate. Firms like Nubank in Brazil and HCL in India have systematically recruited executives who spent their careers at institutions such as Goldman Sachs or Google, using their credibility to signal operational maturity to international investors ahead of global IPOs. These returning professionals bring two things in particular: the trust of global capital markets, and the operational procedures needed to scale a workforce from a few thousand to tens of thousands of employees. By 2026, diaspora networks concentrated in Silicon Valley and London function as early-warning systems, identifying technology trends, generative AI applications among them, roughly 12 to 18 months before they reach mainstream adoption in the firms’ home markets. At the subnational level, states and provinces such as Gujarat in India and Lagos in Nigeria have developed their own outreach to diaspora communities abroad, attracting investment and technology transfers that benefit local champions directly.
The state plays a role in this expansion that no longer has a direct equivalent in Western industrial policies and sometimes models are completely different to the Western ones. Car manufacturer BYD’s trajectory is inseparable from China’s climate policy commitments. Alignment with the Dual Carbon targets unlocked subsidized land, preferential credit from state banks, and government procurement mandates that made its domestic operations so cost-optimized that European and American manufacturers found themselves unable to compete on price by the time BYD entered their markets. Another car manufacturer, Geely, followed a comparable path, refining its manufacturing model in the domestic market before expanding internationally from a position of substantial cost advantage. In India and across Africa, firms scaling on top of public digital infrastructure avoid the transaction fees charged by Visa and Mastercard, compressing their cost base in ways that Western competitors, who built their businesses assuming those fees as a structural constant, cannot easily replicate. Meanwhile, China has charted its own course, with an expansive strategic umbrella project, the Belt and Road Initiative, that mobilized significant resources for the expansion of Chinese champions in a marriage of geoeconomics and industrialization/internationalization policies. For example, Huawei could depend on an over $100 billion line of credit from the China Development Bank to build out 5G telecom infrastructure and other projects for various state partners. And it was not alone in this regard.
In the competitive middle ground, emerging market champions have found a positioning that Western companies rarely attempt anymore. Western incumbents typically concentrate on premium segments, with high margins usually at the cost of relatively low volumes, while purely local competitors fight for the lower segment on price alone. Many emerging market champions occupy the layer between the two, trying to offer the large majority of a premium product’s functionality at roughly half the cost, supported by lower capital costs and supply chains that can be adjusted quickly. Transsion Holdings, which sells smartphones under the Tecno and Infinix brands across Africa, achieved market dominance not by being the cheapest option but by engineering products specifically suited to local conditions: multi-SIM functionality, extended battery life, and camera systems calibrated for a wider range of skin tones. The Chinese company has also expanded into India by purchasing 80% of Spice Mobility and reviving the Spice mobile device brand. Grab followed a comparable logic in its own sector. With patient capital from SoftBank’s Vision Fund and Temasek, it absorbed losses on individual rides over several years, steadily eliminating local competitors and eventually forcing Uber to withdraw from Southeast Asia in exchange for an equity stake in Grab itself. As a Romanian, I was pleased to learn that national brand Dacia (now owned by Renault), which had long occupied the low-cost and no-frills market niche other producers had left unfilled, had not just upgraded its line-up to become more competitive on quality, but remained also competitive on price.
There are many further examples that can be identified. There is big potential of family companies in the developing world, which are already a successful model that sidesteps the usual local disadvantages related to trust and networking. What distinguishes emerging market champions is that they are lean and hungry and the competitive processes by which they have risen to success also favor them in the fight for the rapidly growing emerging market economies. Western firms that could not dominate their markets or compete with these champions in some other way have chosen to join them through targeted investment.
*Radu is CEO, Smartlink Communications
By: N. Peter Kramer