1) Outlook
For the past 20 years, consumers in India and parts of China
have experienced little but improvement. You could argue that the
last two decades have been the best in more than a century.
Constant growth has created a great sense of optimism and a sense
that anything is possible.
Contrast this with the current mood in the Western Europe and
North America and you see that we live in an unbalanced world. The
emerging markets did not really experience
recession in the last couple of years, they continued to get pay
rises and bonuses, while the West is in a new age of austerity.
2) Income
Despite the fact that the Chinese economy will soon eclipse the
American economy in terms of GDP, earnings are not comparable. The
average Chinese income will still be just 20 percent of the US
equivalent.
The Indian economy will also soon become bigger than the US by
the same measure, but here average incomes will remain even lower
than those in China.
Because they earn so much less - even taking into account lower
costs of living - their attitudes, priorities and lifestyles will
be very different to consumers with similar positions in the
West.
This income differential will feed into their behavior. They
will be more cautious about their spending, their travel
experiences will be more local and Western-style images of wealth
will have little meaning at best and, at worst, create an
impression that any brand using them is "not for them".
3) Brands
Overt status is much more important in emerging markets than it
is in developed markets. Status symbols are especially important
with young adults. Logos are there to be shown off, rather than be
discretely displayed to those in the know.
However, authenticity is less important in emerging markets,
hence the key competitor for many big name brands in these
economies is not their rivals but copies of their designs. Improved
quality makes it much harder to tell these fakes from the real
thing and with the cost often below a quarter of the official
retail price, the appeal is strong.
4) Generation gap
The Western world has become older while the rest of the world
is getting younger. The average age of people in Italy is 43, in
India it is 26. But the gaps between the generations are not the
same. In the West, they are closing while the gap has become a
chasm in many emerging markets.
A 40-year-old in the UK could conceivably be a grandfather or a
first-time father, they could be going to the same concerts as a
20-year-old and using the same technology.
In countries like Indonesia and the Philippines, technology,
social media and work experiences are widening the gap to the point
that the parents of a 25-year-old have no understanding of their
child's lifestyle.
5) Home
Young urban consumers in emerging markets have significantly
less private living space: Sixty square meters is a large,
expensive apartment in an Asian city like Mumbai or Hong Kong,
while in London the average first-time buyer's flat is 80 square
meters.
Asian consumers are more likely to share their living space or
even live at home with their parents or even
The development of technology for the home is less important -
these consumers favor smaller, individual, mobile possessions that
they can carry with them as they meet their friends. Smart phones
and iPads/tablets are key to their meetings in parks, shopping
malls and at cinemas.
By contrast, their Western urbanite counterparts can
legitimately aspire to private space at home and seek ways to
display their individualism there.
First published here in Campaign Asia.