New world order of global brands

Warc, 3/24/11

Most global brands have been invented by Western companies for Western consumers. Emerging-market consumers are very different. Simon Silvester explains how to reach them

In the emerging markets, the sense of optimism is everywhere and the future for well-positioned brands looks bright

Over the past two decades, Western brands have spread across the world. They now fill the supermarkets of Brazil, Russia, India China, as well as Mexico, Indonesia, Vietnam and the other ‘next 11’ emerging markets. Five billion of the world’s seven billion people buy them.

But while they are all successful, these big global brands all have something else in common: nearly all were invented by Westerners for Westerners but they are now being sold to customers who earn $3,000 a year. It’s quite a leap. The consumer they were designed for looks nothing like the global consumer of today.

Emerging market consumers are getting richer of course, and rapidly so – consumer incomes in China, India and Brazil rise by 7% to more than 10% each year. But those consumers are not going to be as rich as consumers in the West in the foreseeable future.

The Chinese economy will soon eclipse the American economy with Chinese household incomes being one-fifth of those in America. India will follow with incomes even lower than that. We are entering a new era where the tastes and desires of poorer people are coming to dominate the consumer goods business.

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