Cadbury, Unilever target emerging markets

22 January 2010

NEW DELHI: Cadbury, Unilever and McDonald's are among the companies placing a heightened emphasis on meeting the changing needs of consumers in countries like India and Russia.

Cadbury, the confectioner, recently launched a new variant of Dairy Milk in India – where it already holds more than 60% of the chocolate market – targeted at the "upper socio-economic classes".

It conducted three years of research to ensure that Dairy Milk Silk met the specific requirements of shoppers in the Asian nation.

Costing 49 rupees ($1.06; €0.75; £0.65), the product carries a price premium when compared with its regular alternative, and it will be backed by a TV ad campaign developed by Ogilvy.

Anand Kripalu, Cadbury's managing director in the rapidly-expanding economy, said "consumers are moving forward. There is huge set of emerging consumers who want world-class products."

Bharat Puri, the UK-based firm's global chocolate category director, added that the fact half of the Indian population is under the age of 25 years old is a factor that makes a major difference.

“The emerging market consumer has much more of his life in front of him ... and they have an amazing optimism about the future,” said Puri.

Unilever, the FMCG giant, has also been highly active in India, and has similarly sought to expand its presence in a number of other nations that are expected to be major drivers of future growth.

It launched Clear, a shampoo brand, in China over two years ago, and has since rolled this offering out to more than 30 countries, including Russia and Brazil.

Harish Manwani, the company's president, Asia and Africa, said the tastes of shoppers in such areas are growing more like those of their counterparts elsewhere, thanks to “a tectonic shift” in the global economy.

However, many Russians have also been found to retain a mistrust of products that are discounted or available on promotion, according to Irene Shvakman, of McKinsey, the consultancy.

This is largely because items that were subject to these sorts of offers during the Soviet period were typically about to go out-of-date.

Moreover, a large number of Russians are currently highly focused on price, presenting opportunities, but also challenges, for brand owners.

McDonald's intends to open 45 restaurants in Russia, its fastest-growing European market, over the next two years, taking its total number of outlets there to nearly 300.

However, Khamzat Khasbulatov, chief executive of its local operations, suggested “consumers in Russia are really price sensitive ... we've been very careful in managing our menu prices.”

Data sourced from Financial Times; additional content by Warc staff