As a stamp market develops within an emerging market country, it undergoes several transformative phases which reflect the evolution of demand within the country's philatelic community. Obviously, each country represents a separate case, with its own unique set of circumstances which affect its stamp market. Nevertheless, some useful generalizations may be made regarding emerging stamp markets, and these may be helpful when projecting demand trends for particular categories of stamps.
During the "prologue" state of an underdeveloped country's stamp market- its "zeroth" phase- before the country begins the transition to a middle-income economy, most of the demand for its stamps comes from three groups of collectors: members of the country's wealthy elite, foreign specialists, and worldwide topical collectors. The first two groups are similar, in that both tend to be small and both may collect the country as a whole, but also focus on rarities, varieties, and obscure items. The third group, topical collectors, will only purchase those issues which fall under their chosen topical areas. Demand among the first two groups for better stamps of the country tends to be either static or gradually increasing, although it may be bolstered if investors who view the country's stamps as undervalued join the fold. Topical demand growth will, as always depend upon the popularity of the topic.
The initial phase in the development of a country's stamp market is marked by the a general focus on regular issues and commemoratives as well as the growth in interest in topicals related to the country's culture and prominent national figures. Beyond airmail stamps and semi-postals, there is not much emphasis on back-of-book items at this stage. Often, either no specialized catalogues for the country's stamps exist, or if they do, they are decades old and out-of-print. The appetites of "arriviste" collectors in newly developing nations are often as indiscriminate as they are voracious. India's stamp market provides an example of a rapidly growing collecting community where almost none existed before, and in which many of the new collectors are adults who did not have the means or opportunity to collect as children. As a consequence, it has seen an explosion of demand for flashy items which were once considered wallpaper, such as minor errors on Indian stamps and modern Indian First Day Covers. Adult neophyte collectors are far more common in the developing world than in affluent countries in which most adult collectors began as children, and this phenomenon can strongly influence demand.
The second stage is characterized by the beginnings of specialized collecting, as collectors' interests expand to include varieties and back-of-book items, such as special delivery stamps, postage dues, officials, parcel post stamps, etc.. Often when a country's stamp market reaches this stage, dealers or specialists publish specialized catalogues and albums for the country's stamps, where either none existed before or those that did exist were long out-of-print. The expansion of interest in formerly neglected back-of-book items is sometimes accompanied by dramatic increases in the values of these items.
Extending specialization further, the third stage (which may be viewed as incorporating all of the later stages) is characterized by enhanced interest in postal history, ephemera, and "back-of-back-of-book" items, including quasi-cinderellas, such as locals, carriers, savings stamps, revenues, etc.. Once again, obscure items which had almost no value in the initial stages come into the limelight of collector interest.
The important lesson to draw from this is that when one wishes to profit from the development of a stamp market, it is often a good idea to think ahead by buying neglected oddball items which no one cares about yet, if their value might be enhanced due to trends toward increased specialization. Just as stamps of many formerly poor emerging market countries were once been considered wallpaper, the peripheral items of these countries that are considered junk now may be worth considering.