Learning from the ‘Next 4 Billion’ Markets

Mar
2012

posted by Karina | on Research | No comments

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Social Research Digest – March 2012

Summary

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.

Key Findings

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.

Value proposition

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.

Author(s)

PwC

Source

PDF report

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