Brands that try to appeal to "global
youth" based on the assumption that lifestyles and communications
are increasingly similar are misguided.
We've identified five essential ways
that consumers in emerging markets differ from their counterparts
in Western Europe and North America:
Outlook: For the past 20
years, consumers in Eastern Europe, India and parts of China have
experienced little but improvement. You could argue that the last
two decades have been the best years in more than a century.
Constant growth has created a great sense of optimism and a sense
that anything is possible.
Contrast this with the current mood in
the Western Europe and North America and you see that we live in an
unbalanced world. The emerging markets did not really experience
recession in the last couple of years, they continued to get pay
rises and bonuses, while the West is in a new age of austerity, pay
cuts and even job losses.
Income: Despite the fact that
the Chinese economy will soon eclipse the American economy in terms
of GDP, earnings are not comparable. The average Chinese income
will still be just 20% of the US equivalent.
The Indian economy will also soon
become bigger than the US by the same measure but here average
incomes will remain even lower than those in China.
Because they earn so much less - even
taking into account lower costs of living - their attitudes,
priorities and lifestyles will be very different to consumers with
similar positions in the West.
This income differential will feed
into their behaviour. They will be more cautious about their
spending, their travel experiences are more likely to be local than
global and Western-style images of wealth will have little meaning
at best and, at worst, create an impression that any brand using
them in its advertising is "not for them".
Brands: Overt status is much
more important in emerging markets than it is in developed markets.
Status symbols are especially important with young adults. Logos
are there to be shown off, rather than be discretely displayed to
those in the know.
However, authenticity is less
important in emerging markets. Hence the key competitor for many
big name brands in these economies is not their rivals but copies
of their designs. Improved quality makes it much harder to tell
these fakes from the real thing and with the cost often below a
quarter of the official retail price, the appeal is strong.
Generation Gap: The Western
World has become older while the rest of the world is getting
younger. The average age of Italy is 43, in India it is 26 and in
much of the Middle East and Africa it is under 20.
But the gaps between the generations
are not the same. In the West they are closing while the gap has
become a chasm in many emerging markets.
A 40-year-old in the UK could
conceivably be a grandfather or a first-time father, they could be
going to the same concerts as a 20-year-old and using the same
technology. In the emerging world, technology, social media and
work experiences are widening the gap to the point where the
parents of a 25 year old will have little or no understanding of
their child's lifestyle.
Perhaps the nearest equivalent we have
in the West is the difference between those who grew up in the
1960s and their parents who fought or grew up during the Second
World War.
Home: Young urban consumers
in emerging markets have significantly less private living space:
Sixty square metres is a large, expensive apartment in an Asian
city, while in London the average first-time buyer's flat is 80
square metres.
They are more likely to share their
living space or even live at home with their parents or even their
extended family. Hence they spend more free time away from the
home.
The development of technology for the
home is less important - these consumers favour smaller,
individual, mobile possessions that they can carry with them as
they meet their friends. Smart phones and iPads/tablets are key to
their meetings in parks, shopping malls and at cinemas.
By contrast, their Western urbanite
counterparts can legitimately aspire to private space at home and
seek ways to display their individualism there.
Consumers in emerging cities are also
less likely to have a car - many of their purchase decisions will
be focused online as will a lot of their socialising.
For
this target getting their first smart phone could be the equivalent
of a Western European getting their first car.
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