BEIJING: Consumers in rapidly developing economies (RDEs) are much more optimistic about their future than those in developed economies, according to new research, which also confirms the importance of brand recognition in emerging markets.
Analysis from the Boston Consulting Group (BCG), the global management consultancy, found consumers in Brazil, China and India plan to tighten their spending in the short term but 72% remain optimistic about the future compared to only 48% of consumers in developed economies.
The report, entitled "Keeping an Eye on the Prize: Why Emerging-Market Consumers Remain Bullish", covered 7,000 consumers from these three large economies, and compared responses from consumers in eight African nations and nine developed markets.
Despite the short-term caution expressed by consumers in the three main RDEs, an average of 55% reported that they feel "financially secure" compared to only 35% of those in developed economies – and their desire to spend remains strong.
In India, for example, 66% of respondents agreed that "it seems like every year, there are more things I want to buy", a sentiment shared by 53% of respondents in China and 62% of those in Brazil.
Brand engagement remains strong in emerging markets, the study also found, with 70% of consumers in China and 67% of those in India citing brand name and recognition as key reasons for trading up to higher-priced products.
Brand name and recognition also encourages nearly 80% of consumers in Kenya, Nigeria and South Africa to trade up while 40% of Brazilians agree that "brands say something about who I am, my values, and where I fit in" – a level of engagement nearly twice that of consumers in developed countries.
BCG partner Jeff Walters, the report's co-author, said: "Even though we expect some bumps in emerging markets for at least the next year, the overall picture remains buoyant for the longer term."
"RDEs will continue to offer some of the world's greatest growth opportunities for companies selling consumer goods and services across a broad range of categories," he concluded.
Data sourced from Boston Consulting Group; additional content by Warc staff