Go West Young Man!

"GoWest, young man," served as the mantra for the nineteenth century American migration. The gold rush of 1849 was the impetus for much of the migration of Americans and immigrants to California and theWest Coast. Indiana newspaper writer John Soule's 1851 advice would be popularized by Horace Greeley, and the trend of westward expansion accelerated from the Appalachian Mountains in the eighteenth century across the country to California. United States citizens as well as immigrants would migrate all the way to the Pacific Ocean by the mid-nineteenth century seeking a better life. From why people decided to move to how they would transform the places that they settled, western movement was a landmark phenomenon in American history.

From a business perspective, theWest has been the "gold mine" for NPES members for decades as the North American Market, Western Europe and Japan have constituted over 76% of the worldwide market for print. Today, the U.S. is still the largest print market by far at over $182 billion. Japan is still #2 with Germany and other European markets still in the top ten. From a regional perspective, North America and Western Europe constitute 62% of the worldwide market, so it is clear that they are still important and deserve serious attention by all NPES members.

Much attention in the business press and here at NPES has focused on the BRIC countries (Brazil, Russia, India and China). Clearly, the fastest growing markets over the past decade have been India and China with Brazil and Russia not far behind. In fact, according to the PRIMIR/NPES "Worldwide Market for Print" study, China now ranks as the #3 market in the world and India is #12 and forecasted to grow to #8 by 2011.

NPES has a presence in all of these markets and we just passed our 10-year Anniversary of the NPES China office. So in some respects, we've been ahead of the curve in seeking out new markets for our members' products. Although these markets are still considered to be "developing," in many respects they are "developed"...especially when compared to other emerging markets.

According to a recent article by Harold Meyerson in the Washington Post, "Doing business in China is beginning to cost real money. Not that Chinese workers are buying second homes or anything like that: Their average wage is still a little short of a dollar an hour.

But so many Chinese have now left their villages for the factories that the once bottomless pool of new young workers is beginning to run dry, and the wages of assembly-line employees are rising 10 percent a year." So, where are manufacturers going to find the lowest cost wages today? Meyerson says that many are fleeing south of the border--not our border (Mexico costs way too much.) but China's. They're bound for Vietnam.

So this begs the question, where do we go now? Clearly, NPES needs a presence in the BRIC markets, but to what extent and where are the new BRIC countries to come from?

The mantra going forward is "Go East Young Man!", meaning Eastern Europe (beyond Russia), the Middle East (especially the gulf states) and Southeast Asia. Unfortunately it doesn't form a clever acronym, to coin a term we could call it EEMESEA (pronounced EMC).

Let's take a look at some of the countries that might be a target for NPES members' attention going forward.

South Korea

The largest of the Asian markets yet untapped by NPES is South Korea. Although technically it isn't in South East Asia, it's a sizable market with much potential for NPES members. At #19 and over $6.8 billion in print sales, it's the largest emerging market in the Asian region. The compound annual growth rate of this market from 2001 to 2006 was 11.4% making it both large and fast growing.

Indonesia

As has been covered in previous NPES News articles, Indonesia is the 4th most populous country in the world and the 22nd largest print market in the world. At slightly under $6 billion in print shipments in 2006, it's both a fast growing and sizable market.

Hong Kong

Checking in at #23 on the hit parade is Hong Kong.With a print market just slightly above $5 billion it is also a good sized market with much growth potential.

Malaysia

At $3.4 billion in print sales, #29 Malaysia grew at a CAGR of over 12% over the period 2001- 2006 making it a worthy target.

Other interesting markets in the Southeast Asian region include Taiwan (#34), Philippines (#40) and Thailand (#48).

Moving west to Eastern Europe we have a number of potential markets that NPES members should keep in mind.

Poland

Checking in at #30 we have our first target in the Eastern European arena. Poland's print market was just under $3 billion in 2006 and the CAGR from 2001 to 2006 was over 13%.

Czech Republic

Continuing the Eastern European theme, we have the #41 print market-the Czech Republic which totaled a little over $1.5 billion in 2006.

OK...so what about the Middle East? The largest market in the region is Saudi Arabia which grew 14.3% from 2005 to 2006 but was only a $350 million market. Clearly, it's not in the league of South Korea, Indonesia or Poland for that matter. But, it's clear that with the money and investment going on in the area, significant print growth is on the horizon.

Although it's not currently in the top 50 markets, Dubai and the other 6 United Arab Emirates also warrant monitoring. To demonstrate the potential of this region, RIT recently announced the opening of a campus in Dubai, a solid indication of the potential of printing in the region.

As these markets develop, they will demand newspapers, magazines and other print products to support their growing commerce base.

Figure 1 is the top 50 worldwide markets as determined in the PRIMIR study theWorldwide Market for Print. PRIMIR developed Individual Country Reports for each of the top 51 world markets. They are available in print to NPES members for $15 each. Or they can be downloaded for free from the Members' Only section of www.npes.org .

Members interested in a copy of any country market Executive Report should contact Darcy Harris at phone: 703/264-7200 or e-mail: dharris@npes.org. Any member interested in exploring any of the markets discussed in this article should contact Kip Smythe or Mike Hurley at phone: 703/264-7200.