Connecting with the diaspora, a good business decision!
A ‘diaspora’ can be a very diverse group and the correct meaning of the term is highly disputed. It sometimes suggests a degree of homogeneity that is more imagined than real. Therefore, the plural of the term, namely ‘diasporas,’ is often used to emphasize the diversity of people who identify as belonging to such a group. During Curaçao’s first ‘YDK Diaspora Summit”, the island will connect with its extensive diasporas all over the world to explore possibilities and solutions for the advancement of Curaçao. This article looks at strategies that a country of origin can use to develop a mutually beneficial relationship with its diasporas.
Typically, a ‘diaspora’ refers to people who locate their ties, either through recent family history or more distant historical memory, to a specific country or region other than the one in which they are now residing. The ‘YDK Diaspora Summit’ is the first attempt of the island’s Ministry of Economic Development (MEO) to start a sustainable relationship with its diasporas.
YDK stands for ‘Yu di Kòrsou’, meaning children of Curaçao, a way that the people of Curaçao like to call themselves. YDK is also a registered clothing brand name that accentuates the pride of being a ‘child of Curaçao’. By organizing this summit, the MEO wants to connect more with its diasporas for business motives. Experience of diaspora engagements show that it makes good sense for a country to engage with its diasporas as this can create several mutual benefits for more reasons.
Generally, a diaspora has three core elements: A spatial distribution to form ‘transnational communities’, an orientation to a real or imagined ‘homeland’, and a sense of a distinct identity from the ‘host’ society. What distinguishes a diaspora from the local population of the area where they live is not necessarily skin color, language, or even nationality, but rather a shared sense of connection to and identification with a more-or-less distant place of origin. This might be a region, a country, or a whole continent. Such a connection often goes together with a desire to see that place develop and progress. In this case, the place of connection is Curaçao, the island, its people, and its culture.
Drivers for diaspora markets.
According to the International Trade Center (ITC) in Geneva, diasporas’ consumer choices can have several drivers. By understanding these, businesses can tap into and make good use of the diaspora markets.
Happy or touching memories of childhood in the country of origin can drive diaspora members to select products that take them back to a certain place and time and provide positive emotional feedback. For this reason, diaspora members may prefer a particular type of textile, or a brand of condensed or powdered milk, even though there might be cheaper or healthier options readily available in their host country. Think about the YDK’s in the Netherlands looking for condensed milk, ‘Glacial’ freshener, ‘Disiclin’ disinfectant, or ‘Fria’ soda drinks.
The simple act of being part of a minority due to migration can strengthen the sense of identity. Identity is a significant driver of diasporas’ consumer choices to confirm their identification with their country of origin positively. Being part of the YDK community (in the Netherlands or other countries where Curaçao’s youth are studying) is such an identity.
Diasporas often have a strong sense of patriotism. In many cases, they have come from a developing country that is still looking for its path and a society that is still progressing towards increased material prosperity. Feelings of patriotism often drive consumer choices. This creates exciting opportunities for local SMEs to engage with this overseas market segment.
Diaspora members often like to get together. Suppose their country/area of origin is still in a state of development. In that case, diasporas may organize to intervene and improve the conditions for the people still living there, including purchasing goods and services from the country/area in question. They can organize parties or other events dedicated to the homeland and organize a pressure group to support or oppose a specific development.
Cultural and religious affiliation
Religious and cultural practices can be strong drivers of consumption in their own right. Besides that, they also form the basis for other significant consumer choices, such as the timing of a home visit, preference for specific religious or cultural products, and identification with particular brands and values. A sector that is well aware of this cultural impact is the airline business. Curaçao’s diasporas living abroad face high airline tariffs during the Christmas holiday and Carnival season.
It often happens that diasporas live in economic circumstances that are more favorable than those in their countries of origin. The home country can be going through an economic downturn. There can be poverty, disease, or environmental challenges. Some diasporas may belong to certain vocational professions such as health or education and feel guilt or distress that they should contribute more to their country of origin.
This sense of social responsibility can influence social action and consumer behavior. It can help create a preference for products that will spread developmental benefits to producers in origin countries.
Preferences for particular products may be formed by factors that are shared by certain diasporas, such as the craving for typical delicacies like ‘Bolo Pretu’ (black cake) and ‘Ayaka’ (corn dough stuffed with stewed chicken).
Diaspora market characteristics
Characteristics of the Diaspora markets are affected by a number of factors, such as the density of the diaspora population, the degree of integration of the diaspora with its host community, the degree of social mobility, and the degree of comfort with information and communication technology in general and social media in particular. All these characteristics may be significant for an SME that wants to tap into this overseas market. The diaspora population density may be a significant factor, though this depends somewhat on the characteristics of the product in question and the available distribution channels. Nonetheless, a high concentration of diaspora members in a particular geographic location, such as the YDK diaspora in the Netherlands of more than 100.000 persons, is preferable for an SME exporter than a widely dispersed population scattered over large distances.
A high concentration of diaspora members in an urban setting near commercial outlets is a particularly attractive market. The degree of diaspora integration with host communities is another essential characteristic for SME exporters to consider. On the one hand, a highly segregated diaspora community may have a strong sense of identity and dependence on products from its country of origin. Such an isolated diaspora may be comparatively easy for an SME exporter to access, but the market which
it represents may be limited for expansion beyond the captive diaspora consumers to other consumers or even the mainstream host community. On the other hand, where diasporas are completely integrated with host communities, they may have less demand for products from their country of origin. The products that are in demand, though, may enjoy comparatively easy and quick access to more mainstream consumers because of the high level of integration. The degree of social mobility of diaspora populations is another aspect of these markets which SME exporters should consider. While social mobility may loosely link to potential- and disposable income, it does not always translate automatically into demand for products from the country of origin. Diasporas with high degrees of social mobility may wish for a wide range of exotic products that do not necessarily come from their country of origin. By contrast, diaspora members with less earning potential and lower social mobility may have much narrower-conservative- tastes that are strongly shaped by their experience in their country of origin.
The degree of comfort with information and communication technology in general, and social media in particular, may be significant for an SME exporter’s ability to communicate with diaspora consumers and determine their preferences and choices. The demographics matter a great deal in this context. In general, the younger the diaspora populations, the more “tech-savvy” they are likely to be.
The younger diasporas may be less susceptible to nostalgia for products from their country of origin unless specific tastes have been instilled in them by their parents and elders. All these variables imply that exploiting diaspora markets requires careful consideration and research that tests the common assumptions.
Traditional products and services in diaspora markets
Food, beverages, textiles, clothing, music, films, handicrafts, and home furnishings are just some of the categories of products and services traded in diaspora markets. Typical uses might include transportation services, shipping, language training, various financial services such as money transfers, transportation of packages, insurance, savings, loans, construction services (building a home in the country of origin), and elderly care services. The music and film industry is also experiencing major opportunities in this market, with recent examples of the ‘D’music app’ and the featuring of films by local directors in the Netherlands.
Remittances and the related money transfer services are undoubtedly one of the most typical examples of diaspora interactions. For instance, in Suriname, the diaspora-owned and managed money transfer company dominates the market, leaving the international giants of Moneygram and Western Union far behind. Just as important is diaspora-related tourism and travel. In countries such as Suriname and Guyana, its impact easily surpasses tourism from other market segments. In many cases, these tourists carry large packages when they come ‘home’ to visit, commanding additional transportation services.
Brands from home
‘Brands from home’ can appeal strongly to diasporas, particularly when these brands have an emotional content that brings their consumers back to a happy time and place (even if this is somewhat imaginary). For diaspora members, the act of migration often entails both a sense of loss and gain. In many cases, parents relocated and entered a life of uncertainty, sometimes involving loss of social status, to give their children the prospect of a better life. This can induce diaspora members to look back to their country of origin with a sense of longing. Brands from home can help fill this gap. On the other hand, ‘brands from home’ can also invoke the idea of something new, exclusive, exotic, and inaccessible to others. Such a brand promise may appeal to younger diaspora members. While less likely to look back longingly on their country of origin (to which they might themselves never have been), they might see this country not just as a way to express their identity but also as a developing area with bright prospects on which they could tap for their career advancement and fulfillment.
Back to my roots
‘Back to my roots’ is a Facebook Page of Renshonique Antonia, a second-generation YDK who was born in the Netherlands to Curaçaoan parents. After having visited the island for short and more extended periods, she decided to ‘return’. On her Facebook page, she shares her experiences with other re-emigrated YDKs and e
ncourages other diaspora youngsters who have ‘returned’ to express their thoughts. This Facebook community illustrates how younger diaspora members can fulfill their identity need.
A review of some ‘brands from home’ produced by the Curaçao Manufacturers Association members shows that some are already tapping into the diaspora markets. Some examples are Glacial, Senior & Co Curaçao of Curaçao liqueur, Disiclin disinfectant, Fria carbonated soft drinks, Ponche Caribe, Lovers juice & dairy products, and the herbs and teas by the Dinah Veeris brand. There are other ‘brands from home’ that could follow in these steps. Think of Café Barista coffee, teas from the Twiss and Simia brand, and the newer brands such as DushiU soaps, Bunita make up products, and the YDK clothing brand.
A local brand that has surpassed the Diaspora market and targeted a general wellness market is the Curaloe brand. By selling directly through the mainstream chain of cosmetic products Etos in the Netherlands, this local producer does not limit itself to the Diaspora market but targets the mainstream market.
How to tap into the diaspora market.
As a market segment, diasporas are not well-defined. They are very different in different countries. They have several characteristics and do not respond the same to the various products from their home countries. In short, it means that diaspora markets require considerable footwork to translate their potential into profits. Although they offer a great export potential for enterprises from their country of origin, this potential is difficult to exploit without thorough market research. While the idea of servicing diaspora markets is not new, there are still few tools or databases available to help enterprises approach them. The unpredictability of the diaspora markets has to do with their structure.
They often involve subsets of consumers organized on a shared but complex sense of identity. These are aspects that may become more salient at different times in the lives of diaspora members. The products in question, the characteristics of the diasporas and their associated markets, and the political, economic, and social conditions of both the country of origin and the host country all help define a company’s offer to diaspora markets. These factors should not be taken for granted. Exporting SMEs should conduct systematic marketing research when targeting the diaspora.
The combination of a willing SME with a willing diaspora alone is not enough to ensure a mutually beneficial relationship. A suitable enabling environment is also necessary, as various support structures must be in place to successfully establish “win/win” connections between SMEs and the diaspora. Diasporas need to be motivated to engage with SMEs from their country of origin. As stated before, that alone is not enough to translate their potential into increased trade. Both the supply and demand for diaspora resources need to be facilitated through an enabling environment. Even if an SME willing to partner with a diaspora finds a diaspora willing to do the same, any aspirations for fruitful contacts are likely to go astray if the correct environment is not in place.
Diaspora supply, enabling environment, and origin country demand.
Experience shows that, for the SME-diaspora exchanges to be mutually beneficial, there must be a combination of three factors: the Diaspora Supply, an Enabling Environment, and Origin Country Demand. Over the years, many countries such as China, India, and Israel have successfully coupled their diasporas’ talents and resources to strengthen their economies and achieve broader development goals. These countries have paid close attention to enabling conditions, and not just to the supply of and demand for diaspora resources and skills. Many countries in Africa are taking an increased interest in engaging with their diasporas to strengthen SMEs’ growth prospects. Ghana, for instance, is actively targeting its diaspora in the USA and the Caribbean. It had even proclaimed the year 2019 as the year of ‘return’ and realized numerous visits from its widespread diaspora with that strategy.
While many of these countries have willing diasporas and eager SMEs, they may realize more results by paying adequate attention to creating an appropriate enabling environment for exchanges to take place. The diaspora business has remained mostly under the radar. However, cases such as the ‘Golden Krust’, a Jamaican diaspora offering Caribbean food in more than 125 locations in North America, show that it makes good sense to explore this business and ensure the enabling framework for it to thrive.
The impact of diaspora engagement by SMEs is sculpted mainly by the conditions in place, both in the diaspora’s host country and its country of origin. While SMEs themselves have a limited influence on the environment influencing their abilities to engage in productive relationships with their country’s diaspora, they must recognize the essential components of an enabling environment. Such an environment will help them distinguish when the time is ripe for engagement and gain the ability to convey the problems they face at the policy level. In this context, the ‘enabling environment’ is not the same as that discussed in a more general business context. In general, the ‘enabling environment’ includes aspects like favorable taxation policies, easy access to financing, access to advisory and consulting services, a high level of human capital, and a culture that celebrates and rewards entrepreneurship. In this case, it encourages explicitly productive contacts between diasporas and SMEs from their countries of origin.
Feeling of transnationalism
The concept of ‘transnationalism,’ being related to a diaspora member’s sense of personal identity, is always a subjective one, although it also has objective effects. First-generation diaspora members are likely to experience transnationalism in a very different way, whether socioeconomically, mentally, or emotionally, from their children or their grandchildren, some of whom may not have any direct experience in their country of origin and may not even speak the language of their country of origin. Think about the second generation YDK’s in the Netherlands, who barely speak Papiamentu but still like music in Papiamentu. The country of origin needs to foster a sense of transnationalism in its diasporas to keep contact with them and maintain a sense of attachment to their roots.
Examples of these are China, which uses its media to reach out to youths of Chinese origin, and Israel that funds “Birthright Israel” trips for Jewish youths around the world. Fostering a strong sense of transnationalism in a diaspora is essential for SME engagement with diaspora members overseas. It may even spur some of them to engage more strongly or even return to live in their country of origin. With a good strategy, Curaçao’s SMEs can surely benefit from the re-emigration of the diaspora.
Social integration of diasporas
Cultural, linguistic, and other differences between a diaspora and its host society can place diaspora members at risk of discrimination and marginalization in their host countries. As such, the governments of countries with diaspora populations need to play a constructive role in combating xenophobia and helping diaspora communities’ social integration. SMEs in the country of origin should understand the degree of social integration of the diaspora in its host country, as it will affect the potential market size and opportunities for plugging its products in the host society.
Creating a sound migration framework
Any country needs to have an adequate system to oversee and regulate migration. This system is an essential factor in increasing diasporas’ human development and regulating their presence in the host country.
Without a sound migration framework in place, many diaspora members may go unreported or undocumented, thus making them difficult to access for any SME. Curaçao can realize this migration framework through bilateral agreements between the host country and the country of origin. In the case of the migration of YDK to the Netherlands, the diaspora members can quickly go unreported as they have the same nationality. Their willingness to be part of the database of YDK is thus wholly voluntary. The hosting of this annually recurring summit and its follow-up events will be critical to developing this diaspora framework. For it to be successful, there must be a win/win outcome for both parties in which the diaspora and Curaçao’s SMEs or the community as a whole, feel that it makes sense and that they are benefiting from the relationship.
Diaspora groups and associations play significant roles in enabling diaspora members’ participation in the public life of their host countries. The Netherlands, for instance, has a decades-long history of so-called ‘Antillean organizations. Nowadays, these are not so active anymore but can still play an important role in stimulating the diaspora agenda. For instance, they can help send resources back to Curaçao by linking diaspora members with the right SMEs. This idea is not new. Some governments have successfully promoted interaction with diaspora associations.