Targeted expansion to benefit brands

27 March 2012

BERLIN: Companies stand to gain significant benefits from targeting 20 core emerging markets, according to Roland Berger Strategy Consultants.

The consultancy reported that the global population should experience a 20% expansion by 2030, reaching 8.3bn people. Some 95% of this increase will be come from fast-growth economies.

Further, just 23% of the world's inhabitants are expected to live in the Americas, Europe, Australia and Oceania by 2030, whereas 19% will be from Africa and 58% from Asia.

When taking inflation into account, global GDP is predicted to rise by $95tr during the same period, with fast-growth markets yielding 70% of this projected improvement, ahead of the 30% provided by more mature regions.

Roland Berger highlighted a "Focus 20" group of nations due to contribute the greatest GDP increases, including China, India, Brazil, Indonesia, Russia, Mexico, Iraq, Nigeria, Egypt and Vietnam.

Collectively, these countries were pegged to add $49.7tr in GDP from 2010-30, alongside seeing their population levels rise by a total of 700m people.

"By 2030, almost 80% of the global middle class - about 3.9bn individuals - will live outside Europe and North America. This development will lead to strong demand for advanced consumer products," Roland Berger added.

Moreover, shoppers in the Focus 20 markets are anticipated to spend $15tr by the end of the current decade, when 117m households in these nations will earn more than $35,000 per year.

The vast majority of these affluent households are set to be located in Brazil, Russia, India and China – together known as the BRICs – but 36m will be distributed across 14 additional outlets.

"Large European firms are accustomed to adapting product design and marketing to diverse European cultures," Roland Berger argued. "Their sensitivity skills will be tested when they start researching sales strategies to convince increasingly savvy emerging market consumers."

Among the other key trends identified by the study was a likely boom in mobile payments, with transaction values forecast to hit $123bn in developing countries by 2014.

Low income shoppers also already record an annual expenditure of $4.5tr on consumer goods, a figure that is only going to grow. "Reaching them, however, requires imaginative consumer research and marketing," the report added.

Data sourced from Roland Berger Strategy Consultants; additional content by Warc staff