An increasing number of Western brands are launching new products, or even brands, catering to consumers in emerging markets.
That’s where the money is right now, and Western brands are still favored over local ones.The combination of perceived quality with a bit of local tailoring, love or exclusivity is hence an intelligent way of finding new customers.
Products tailored to their needs and wants
Like all consumers, Chinese, Indian, Brazilian, Russian and Middle Eastern consumers are keen on products tailored to their needs, wants and desires, either for practical reasons or simply because of cultural pride.
Affluent Chinese prefer foreign brands
This phenomenon is spawned by the fact that economic and consumption power is shifting towards emerging markets. And considering that, according to McKinsey, affluent Chinese consumers prefer foreign brands to Chinese ones it’s clear that it’s worth while for Western companies to focus on Chinese customers. Add to that the fact that China’s retail sales may outstrip those of the United States already in 2016 and it makes even more sense to cater to the new Chinese middle class.
Shift to emerging markets
China’s wealthy shrugged off the recession. Actually only 8% of them changed their luxury shopping behavior in 2009 (46% of Americans and 51% of Europeans, however did) . Forty four percent of China’s wealthy instead increased their spending during the global downturn.
Global growth moving to BRIC
About 80% of global growth is likely to take place in emerging markets. The figure could go even higher if India were to facilitate imports of luxury goods. Not to mention if commodity prices go even higher which will increase wealth in Russia. So there is a need for Western companies to create both uniqueness and make consumers in emerging markets feel they belong. For companies who manage to do so, the new rich in BRICs offer a world of opportunity.
Some Made for China products
Trendwatching, one of the world’s leading trend firms have singled out some products created by Western companies for Chinese customers. Levi’s dENIZEN, a new jeans brand for Asian/Chinese customers with slimmer fits. For wealthy customers in Shanghai Dior offer very expensive Shanghai Blue Phones. Shang Xia is Hermés’ Chinese brand of ready-to-wear and decorative arts inspired by Chinese culture. When Cloé celebrated five years in China they created a limited edition of Marchi handbags to mark the occasion. The limited edition of BMW’s orange metallic M3 Tiger was very popular in China. Not least since it was released to coincide with the Chinese year of the Tiger.
Apple “Designed in California, Made for China”
In Apple’s Shanghai store staff started wearing red t-shirts with that slogan in Mandarin. A play on the words on the back of all iPhones “Designed by Apple in California, assembled in China”. And the Chinese loved it.
Introducing cheaper brands in China
Honda (Li Nian), Nissan (Venucia) and GM (Baojun) are creating and introducing less expensive cars for China since many customers in emerging markets still have less to spend than their counterparts in the West.
So have you jumped on the Made for China bandwagon yet? Or are you aiming for the Indian, Russian, Brazilian or Middle Eastern markets instead – or – as well? If so, what markets have been most successful for you? What new products have proved to be hits in the different countries? If not, can you really afford to ignore the new emerging middle classes?
(Photo: PhotoXpress – chinatiger)