This is generally not the case in developing countries such as China and India. Because economic development in a country's early stages is so dependent on imported technology, foreign investment and exports, economic growth tends to be clustered in those areas that attract such things (typically coastal areas, big cities, and areas that receive special advantages from the government). The result is that economic development can vary greatly within developing countries with, for example, the percentage of "middle-class" families in one region vastly outstripping that of another region within the same country.
Which brings us to a good question: just what does "middle class" mean? One country's middle class can be another country's lower class, a distinction that is sometimes obscured by economic and market analysts trying to adjust for cost-of-living differences. For example, there was much talk of a burgeoning Indian middle class in the 1990s, but in the end many companies entering the market found that India's middle class did not have nearly the buying power necessary to support demand for many products.
To avoid these kind of mistakes, remember that population size and market potential are not the same thing. One billion Indians and 1.3 billion Chinese sounds enticing, but you will have to dig deeper if you want to assess the true number of potential customers for your company. Since market intelligence in developing countries is often difficult to establish, this will likely take some effort. Just reading a third-party market study won't suffice. You'll want to get on the ground and talk to customers, distributors, competitors, etc., to refine your understanding of the actual market size.
In this case, we found that customers who could afford the "Cadillac" tended to have high-quality, well-maintained support equipment, which meant they could reap the full benefit of our product. Companies that could only afford the "Chevy" tended to have low-quality support equipment with high failure rates, which meant that, until they upgraded their entire system, they couldn't reap the benefits of our product. So the Caddy sold while the Chevy lagged.
This case is an excellent reminder that few, if any, products or services stand alone. They all have to fit into a particular technical system, lifestyle, work process, etc. To understand the potential demand for your product, you must understand how your product fits in. This means more than making sure you can run on the local electric service, although that kind of technical fit is also important. You must also make sure that the benefits you are offering are desired, can be realized and are considered a priority by potential customers. Again, this will require some digging. It is important to remember that you can't assume the only buying criterion will be price. Other factors will come into play, and you can't assume that these will be the same abroad as they are at home. In the end you might find, as we did in the example above, that price is less of a problem than you thought, and that other challenges are even more difficult to overcome.
Emerging-market financial systems tend to be less developed and more highly regulated than those in developed markets, which means that financing is not always readily available. The financial health of customers is also less easy to ascertain, which makes granting credit a more difficult proposition. Though it is enticing to offer favorable conditions in order to "capture" the market, this can easily backfire, causing early gains in market share to evaporate into write-offs and losses. Again, the key is to make no assumptions and do your homework before you make a major commitment.
As an economy develops, so do its distribution channels. In America, we've seen the Internet become an important means of reaching the customer. In places like China, as regulations change and specialization increases, distribution channels change as well. Things like dealer networks, wholesalers and agents are in various stages of development and may or may not function exactly as you expect. You have to be able to both understand the situation today and anticipate the changes that are coming. The key is no different than with other factors; make no assumptions and always do your homework.
Obviously, the above comments are not the final word in terms of evaluating the size and potential of a foreign market. I have simply tried to use this brief space to suggest a few additional factors you might want to consider. Depending on your situation, there will likely be other factors to consider as well. As always, the best advice is to take your time and do your homework. Since the early decisions are usually the most important (like how much to initially invest), you don't want to make a mistake before you even get started.