Social Research Digest – March 2012
A new PwC study outlines the emerging class of citizens and consumers defining a critical growth horizon for companies over the coming decade. The report focuses on strategies adopted by leaders who have tried to grow profitably in this global emerging market.
- Globally, businesses are looking at the “Next 4 Billion” for growth, especially now, given the slowdown in mature economics.
- Businesses functioning in this group (which includes India, China, Indonesia parts of Africa and Latin America where over 4 billion of the world’s 7 billion reside) have traditionally focused on the middle and upper middle income tiers.
- That the next big wave of business opportunity will come from the Global Emerging Middle (GEM), which lies just below the middle income segment and above the low income segment.
- GEM will represent a combined annual market, globally, in excess of USD 6 trillion by 2021.
- In India alone, this market is expected to cross the USD 1 trillion threshold by 2021.
- For companies seeking to succeed in this challenging environment, their strategy should consider three important vectors.
- Aspiration trade-offs: Understand the very different aspirations, influencers, and tradeoffs of this segment.
- Beyond low cost: Position product and services beyond cost, pricing beyond functional considerations.
- Platform Customisation: Design product and services with a few key features, but tailoring it for diversity
Innovative business models
- Ecosystem Collaboration: Extract value by creating an ecosystem, collaborate with the unorganised sector.
- Modular scale: Have a modular design, aggregate local demand and think scale from the beginning.
- Smart reach: Cluster marketing and distribution, create local financing mechanism, enable through technology and offline.
Shift in mindset
- Trusted endorsements: Build the brand with aspiration in mind, but using word of mouth to drive awareness.
- Disruptive thinking: Seek Disruptive change in addressing this market often with leapfrog solutions.
- Values and metrics: Drive this business with broader values and incubate it with different metrics.