5 Myths About Emerging Market Consumers Debunked
With experts projecting the growth of the middle class in emerging markets to rise from $1.8 billion to $3.2 billion by 2020, it’s more important than ever for brands to find their right point of connection.
Our Kathryn Sloane, Director of Growth, APAC, and Spencer Ball, Creative Director at Anthem (part of our brand development group), dispel five pervasive myths about emerging consumers. Global brands, take note!
Myth 1: Emerging market consumers don’t spend very much.
Although these consumers aren’t as wealthy as those in other markets, proportionally they spend more of their income (50-75%) on consumer goods than those in wealthier markets (35%). All of these incremental sales add up to big baskets.
Myth 2: They don’t buy premium.
We often over-simplify traditional trade in emerging economies while over-complicating the modern. This has led to the view that modern trade shoppers are brand-savvy while general trade shoppers are easily led. However, regardless of the channel, the in-store purchase of a shopper journey tends to be longer and more important in emerging markets than in developed ones.
Myth 3: Emerging market consumers focus wholly on price.
Emerging market consumers take into account many factors other than price. They benchmark, are very restrained as shoppers and prefer not to use credit. In this market, shoppers factor in travel costs in their shopping basket, so geographic location is key. They also may not have the space at home to buy in bulk.
Myth 4: They don’t shop in modern retail stores, but would if they could.
Emerging consumers do browse in modern retail stores for entertainment and ideas, but prefer to buy in general trade stores. Why? They like the noise, informality and personal service. They also trust the salespeople. Moreover, many consumers shop in both – they buy groceries in general trade and then head to Gucci!
Myth 5 – General trade retailers are not savvy.
Nothing could be further from the truth. General trade retailers often have greater visibility into shopper behavior than modern trade retailers do. They intimately understand their shoppers: How, why and when they buy. They adjust their mix accordingly based on their knowledge of real shoppers in real time.
For more insight how to create an impactful, profitable brand experience in emerging markets, watch The Retail Imbalance in Emerging Markets, a BrandSquare Live Session hosted by Spencer Ball and Kathryn Sloane.