Catarina's World

An increasing number of Western brands are launching new products, or even brands, catering to consumers in emerging markets.

Are you developing products catering to the needs and likes of well to do Chinese customers?

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’s “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)

Every day about 180,000 people move into cities. Add to that that half the world’s population already live in cities and it’s obvious that urbanization is one of the mega trend for the new decade.

How is urbanization affecting the kind of products and services you develop for the future? Are you adapting what your have to cater to the very specific, often more refined needs of urbanites world- wide?

Needless to say this has an enormous impact on what we consume because urban consumers are more daring, liberal, tolerant, experienced and prone to trying out new products and services.

From one century to another

In emerging markets the difference between the country side and the cities can be tremendous. Like moving from the way we lived in the West in the 1800s into a modern 21st century life style. A move away from traditional social and family structures to being exposed to a wide range of alternatives.

Hundred cities – a third of the world economy

Just one hundred urban islands account for about a third of the world economy and almost all innovation. New York’s economy is for instance larger than that of 46 Sub Saharan African countries put together and, according to Foreign Policy, Hong Kong receives more tourists annually than all of India. Obviously other metropolises are keen to join. Not least Shanghai, Sao Paulo and Istanbul.

Will we all become city dwellers?

Considering that quite a few poor people from rural areas end up going from the ashes into the fire in cities, will this trend continue? Or will less people decide to seek their fortune in urban areas because of the problems associated with it? Will we consequently see the trend gradually slowing down? Or will it continue and even accelerate? Are more and more of us becoming city dwellers, for better of for worse? If so, world-wide consumption will change drastically on a continuous basis.

Catering to city-citizens

To appeal to the population of these vast urban areas you need an urban dedicated approach to products, services and campaigns that not only mirror but slightly alter the usual country specific approach.

Considering that 3 billion people already live in cities and 60 million are, according to Intuit, being added on a yearly basis, what are you doing to cater to their needs and requirements? Urban pride is something that shouldn’t be forgotten. Look at BMW’s Megacity Vehicle and Smirnoff’s Absolut Cities. And it’s not only luxury goods that is affected by urbanization. Even consumption patterns for things like shampoo and detergents are changing. How is urbanization affecting the kind of products and services you develop for the future? Are you adapting what you have to offer to the very specific, often more refined needs or urbanites world wide? Or maybe combining the country specifics with the urban approach to develop slightly different products tailor made for different cities?

(Photo: hamron – Flickr)