The tectonic plates of global economic power are changing, creating huge opportunities for emerging markets. These markets, once considered peripheral, are now becoming centers of growth and innovation. But with great potential comes great challenges. When adhesive and sealant manufacturers set their sights on these promising areas, they must address some challenges and opportunities before they can truly realize their potential.
Global Adhesives Market Overview
The global adhesive market is growing steadily. A report from Grand View Research shows that the market size in 2020 was US$52.6 billion and is expected to reach US$78.6 billion by 2028, with a compound annual growth rate of 5.4% from 2021 to 20286.
The market is segmented on the basis of product type into water-based, solvent-based, hot melt, reactive adhesives, and sealants. Water-based adhesives and sealants are the largest segment due to their environmental friendliness and low VOC emissions. In terms of application, the market is divided into automotive, construction, packaging, electronics, etc.
Regionally, Asia Pacific dominates the global adhesives and sealants market owing to rapid industrialization and urbanization in countries such as China and India. North America and Europe also contribute significantly to the market due to the presence of major manufacturers and technological advancements.
Key drivers of growth in emerging markets
Economic growth and urbanization
Emerging markets are experiencing rapid economic growth, resulting in increased urbanization and infrastructure development. This drives demand for adhesives and sealants in construction projects, automotive manufacturing and other industries. As more people move to cities and the middle class expands, demand grows for housing, transportation and consumer goods, all of which require adhesives and sealants.
Increasing demand from end-use industries
Demand is surging in emerging markets from various end-use industries such as automotive, construction, packaging and electronics. Adhesives and sealants are an important component in these industries for bonding, sealing and protecting materials. As these industries grow, so does the demand for adhesives and sealants.
Favorable national policies and initiatives
Many emerging markets have implemented favorable government policies and initiatives to attract foreign investment and promote industrial growth. These policies include tax incentives, subsidies and simplified regulations. Adhesives and sealants manufacturers can use these policies to establish operations in emerging markets and capitalize on growing demand.
Opportunities and challenges for adhesives and sealant manufacturers
Opportunities in emerging markets
Emerging markets offer multiple opportunities for adhesive and sealant manufacturers. These markets have large customer bases and growing demand for adhesive and sealant products. Manufacturers can capitalize on this demand by expanding their product range, developing innovative solutions and building strong distribution networks.
Additionally, emerging markets tend to have less competition than mature markets. This provides manufacturers with an opportunity to gain a competitive advantage by offering high-quality products, excellent customer service, and competitive prices. Challenges faced by manufacturers in these markets
While opportunities exist in emerging markets, manufacturers also face challenges that need to be overcome. One of the major challenges is the lack of awareness and understanding of adhesives and sealant products in these markets. Manufacturers need to educate customers on the benefits and applications of their products to drive adoption.
Another challenge is the presence of local competitors who have a better understanding of the market and established relationships with customers. Manufacturers need to differentiate themselves by offering a unique value proposition, such as superior product quality, technical support and after-sales service.
Market entry strategies for emerging markets
Joint ventures and partnerships
Joint ventures and partnerships are an effective market entry strategy for adhesives and sealant manufacturers in emerging markets. By partnering with local companies, manufacturers can leverage their knowledge of markets, distribution networks and customer relationships. This allows manufacturers to quickly establish a market and gain a larger customer base.
Acquisitions and mergers
Acquisitions or mergers with local companies are another strategy for manufacturers to enter emerging markets. This strategy gives manufacturers immediate access to local resources, including manufacturing facilities, distribution networks, and customer relationships. It also helps manufacturers overcome regulatory barriers and navigate the complexities of local markets.
Greenfield investment
Greenfield investments involve establishing new manufacturing facilities or subsidiaries in emerging markets. While this strategy requires significant upfront investment and longer lead times, it gives manufacturers complete control over their operations and allows them to tailor products and services to the specific needs of the market.
Regulatory environment and standards in emerging markets
The regulatory environment in emerging markets varies from country to country. Manufacturers need to understand the regulatory requirements and standards in each market in which they operate to ensure compliance and avoid penalties,
In some emerging markets, controls may be limited or enforcement may be lax, which may lead to counterfeit products and unfair competition. Manufacturers need to implement strong quality control measures and work closely with local authorities to address these issues.
Taiwan’s regulatory requirements may also pose challenges for manufacturers entering emerging markets. Different countries may have different standards and certification requirements for adhesive and sealant products. Manufacturers need to ensure that their products comply with local standards and obtain the necessary certifications before entering the market.
In summary, emerging markets offer huge opportunities to adhesive and sealant manufacturers with large customer bases, growing demand from various industries, and favorable government policies. However, manufacturers also face challenges such as lack of awareness, competition from local players and regulatory complexity.
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Post time: Mar-19-2024