LONDON: Brand owners looking to boost their revenues from emerging markets could gain substantial benefits by focusing on countries that have been largely ignored by rivals.
In a new report, the Economist Intelligence argued that analysts, investors and advertisers have effectively neglected certain nations thus far.
It agreed that Brazil, Russia India and China - collectively known as the BRICs, a term coined by Goldman Sachs in 2001 - are at the very heart of a global “shift in gravity”.
“While a convenient acronym, the BRICs concept fails to capture the breadth of what is happening in emerging markets,” the report added.
Taking a similar view, investment bank Goldman Sachs has previously identified the “Next 11” nations - Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam.
However, the EIU asserted that this list was primarily based on population size, whereas a more nuanced assessment suggested a different “second tier” may be worthy of attention.
It labelled this group the CIVETS, an abbreviation for Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.
Each of these nations has a young population, a diversified economy that is not reliant on a specific sector, an established financial system and relatively low inflation.
Indonesia was the biggest member of this cohort with 243m consumers, and its GDP is forecast to expand by an average of 5.3% a year between 2010 and 2030.
In contrast, Colombia has just 46.9 million residents, but its gross domestic product per head is over twice that of Indonesia, at $8,920.
Its economy is expected to grow by 3.3% annually in the next two decades, pushing up demand for brands in a variety of categories in the process.
Vietnam was the sole representative from Asia, and while its 87.8m citizens carry an individual value of only $3,150, the country's sound financials and 5% fiscal growth going forward make it an appealing proposition.
Egypt currently falls behind Saudi Arabia and the United Arab Emirates in the Middle East, and was also regarded as the nation which could pose the greatest risk.
“High public debt (80% of GDP) contributes to making it the weakest link in the group,” the EIU said.
“But rapid growth is eroding the debt burden and a young population means that the debt ratio is less worrying than it would be for an OECD country.”
In Turkey, per capita GDP stands at $12,740 for 73.3m people, and it is has a comparatively advanced infrastructure measured against many other emerging markets.
These figures stood at $10,730 and 49.1m in turn in for South Africa, which was buoyed by the recent FIFA World Cup and seems set to further enhance its status in the future.
Overall, the EIU predicted the CIVETS would post an annual expansion of 4.5% in GDP over the coming 20 years.
This is slightly behind the level of 4.9% in the BRICs, but is ahead of the corresponding total of 1.8% in the G7, which includes the UK, US and Japan.
Data sourced from EIU; additional content by Warc staff