Catarina's World

The combination of the rapidly expanding global fashion and beauty industry and the internet is providing opportunities for developing countries.

Environmentally responsible fashions can become cultural ambassadors that change global value sets and lead to other economic changes that also foster greater respect for the environment.

It enables them to use their creative talents and cultural heritages to create jobs and sell products that are environmentally responsible. And even better, results can come swiftly thanks to the internet. Their ideas, designs, and products can be displayed online and sold rapidly around the world.

Experts at UNCTAD’s “Best of Nature” conference believe fashion, cosmetics and perfume can lead to significant increase of employment in developing countries. We are mainly talking about small businesses which there, as well as in the rest of the world, is an important component of progress. With the right marketing such creative work can be not only profitable but promote different cultures and biodiversity as well.

Biodiversity is a source of creativity and new products for the perfume industry. It is vital for supply chains to be transparent so that natural ingredients are responsibly harvested to make sure that the supply of valuable plants is not exhausted, Michel Mane, President of Mane USA said. He added that “by establishing techniques for the growth of perfume ingredients in developing countries we are able to ensure the ecological viability of our ingredients. By using both cutting-edge, environmentally benign agricultural practices and providing local employment we are able to ensure the ecological viability of our ingredients”.

More than 40% of Unilever’s turnover is now in developing countries, said Giulia DiTommaso, Unilever’s Director of External Affairs for Africa, the Middle East and Turkey. They are one of the largest buyers in the world of ingredients such as palm oil and have noticed increased consumer interest in environmentally friendly products. Unilever is hence focusing on sustainable use of water, soils and, not to forget, respect for biodiversity.

A vital issue is how environmentally responsible products can be certified and traced. We want to be sure of what we are buying. According to Sean Ansett, Managing Partner of At Stake Advisors, “customers will want to be able to trace their purchases “from farm to fork and from mine to mobile phone”. Current technology is showing that such traceability is now possible, if difficult”.

“There are “tool sets” to allow corporations to improve the transparency of their supply chains. Doing so generates brand trust and loyalty, especially as customers increasingly demand that products be environmentally responsible”, Tim Wilson of Historic Features said. They supply such tools to customers like Wal-Mart.

Definitions of “natural” and “organic” still have not been set by for instance the European Union, but are under development and definitions hence still vary from country to country.

Organic African fashion popular in the West

African fashion is increasingly popular in the developed world and is creating thousands of jobs in Africa. There is for instance a fashion school in Niger that’s helping 150 African designers develop their talents.

What Africa needs is the capacity to mass produce fashion, says Anggy Haif, a Cameroonian fashion designer. The continent lacks the infrastructure and industry needed for widespread production of natural-fibre clothes. But there is a huge market for that kind of clothes and many jobs depend on developing such facilities.

So now that concern over the environment is mounting, and words such as “green” and “sustainable” and “responsible” are heard widely, environmentally responsible fashion and beauty products have the opportunity to shift from niche products to being much more widely used. Environmentally responsible fashions can become cultural ambassadors that change global value sets and lead to other economic changes that also foster greater respect for the environment.

Wouldn’t it hence be an idea for aid and donor organisations to devote more time and money to assisting developing countries with getting the infrastructure and know-how needed to develop more such companies? To do so would lead to sustainable development that would enable the nations to gradually work and trade themselves to a better standard of living. As opposed to most aid it would not just have a temporary effect but would assist the developing world long term starting now.

photo: Ethan Allen Flickr

Middle class spending is crucial for economic growth. So now, with Western middle classes in debt and distress, many economists look to the new emerging-market middle class as the foundation for a new era of global prosperity.

Middle class spending power per capita in the Gulf is, for some reason, often overlooked by Western companies.

Last year 70 million people in developing countries joined the middle class, with incomes between $6,000 and$30,000. It is estimated that within 20 years they will surpass their Western pears when it comes to global spending power. The focus is mainly on Asia and it is estimated that in about a decade they will pick up the slack left by overspent America. Emergency market spending is in fact already bolstering the balance sheets of many Western firms.

Needless to say the worlds is focusing on China and India due to its huge populations as well as rapidly rising economies and middle classes. Correct if you look at the amount of people. But by looking at the issue that way we overlook a very potent and prosperous group of people.

When it comes to per capita spending I’m certain that the middle classes in Saudi Arabia and the other Gulf countries not only earn more but also spend far more than their Asian counterparts. It’s not for nothing many middle class Indians chose to work in the Gulf, despite the fact that they are paid less than the locals. Salaries are higher and you pay no income tax in the Gulf.

Shopping is a top leisure activity and when the weekend starts the malls are filled with people who literally shop until they drop. A woman who works in a Chanel shop in the area told me an average customer spends an absolute fortune every time they come to the shop. And the same goes for more expensive items like cars, jewellery and electronics. Considering the importance the Chinese put on saving money, I would be very surprised if middle class people in China, with the exception of some mega rich, spend that much.

The world, certainly multinationals, are already managing the economic spending shift to Asia very well. But quite a few Western companies are forgetting about Saudi Arabia and the Gulf, which in my opinion could prove costly especially for companies selling expensive consumer goods.

A large amount of Asian and Middle Eastern households have incomes today that position them just below the global middle class threshold and so increasingly large numbers of them are expected to become middle class in the next ten years.

Emerging-market leaders know that the Western system created the worldwide boom of the last quarter century that ended when Lehman Brothers collapsed 18 months ago. Now the boom has moved to emerging markets, and their leaders will increasingly choose to alter Western models to suit their countries. Consequently the fact that all eyes are on Asia and the Gulf forgotten could turn out to be a fatal mistake. The new emerging middle classes are supporters of globalization but highly nationalistic. And there is a vast difference between nationalism in China and, say, Kuwait.

Back to emerging middle classes in general, we can conclude that the Chinese bought more cars than Americans last year, and that India has as many Internet users as the U.S. Also it is estimated that by 2030, more than nine out of every 10 mobile phones will be owned by people in the developing world. Coca-Cola actually forecasts a doubling of worldwide revenues to $200 billion over the next decade, thanks to another 1 billion people expected to join the middle class by 2020. So Western companies who haven’t yet focused on developing countries middle classes should jump on the band waggon swiftly and not overlook the Gulf.

(photo: flickr – Lars Plougmann)