MUMBAI: Multinationals can learn a lot from savvy local brands in emerging markets, as battles between international and single market brands heat up.
Data from Ogilvy & Mather's Velocity 12 research report, which investigates the consumer trends in 12 fast-growing markets globally, revealed that local brands are leading innovation in many fast-growing economies.
The Velocity 12 markets (defined by Ogilvy & Mather as Brazil, Nigeria, Mexico, China, Bangladesh, Philippines, Egypt, Pakistan, India, Myanmar, Indonesia and Vietnam) contributed a massive 82% of the world's economic growth in 2015, and are the new frontier for marketers globally.
A key area where single market brands excel is localisation – local brands often have the upper hand in cultural fluency and language to engage increasingly wealthy consumers. (For more read Warc's in-depth exclusive on Velocity 12 findings: How MNCs can learn from local brands in developing markets.)
In India, for example, data revealed that 65% of the Indian middle class believes that their local culture matters more as time goes by. But these attitudes don't necessarily translate into preferences for local brands.
Studies have shown that buyers of luxury goods, automobiles and consumer electronics, for example, are more strongly influenced by country of origin effects, and show a preference for international brands; FMCGs and banking, on the other hand, are sectors where they prefer local brands because they believe that these firms understand their needs better.
The tastes and attitudes of consumers in the V12 markets are also evolving so rapidly that it is not enough to have insights into their behaviour. Brands need to map consumer preferences over one to five years, and then translate that knowledge into products, campaigns and brands that are focused on tomorrow.
Data sourced from Warc