Emerging Marketing strategy
A P R I L 2 0 11
s t r a t e g y
p r a c t i c e
Is your emerging-market strategy local enough?
The diversity and dynamism of China,
India, and Brazil defy any one-size-fits-all approach. But by targeting city clusters within them, companies can seize growth opportunities. Yuval Atsmon, Ari Kertesz, and Ireena Vittal
2
Is your emerging-market strategy local enough?
Yuval Atsmon, Ari Kertesz, and Ireena Vittal
The diversity and dynamism of China, India, and Brazil defy any one-size-fits-all approach.
But by targeting city clusters within them, companies can seize growth opportunities.
Creating a powerful emerging-market strategy has moved to the top of the growth agendas of many multinational companies, and for good reason: in 15 years’ time, 57 percent of the nearly one billion households with earnings greater than $20,0001 a year will live in the developing world. Seven emerging economies—China, India,
Brazil, Mexico, Russia, Turkey, and Indonesia—are expected to contribute about 45 percent of global GDP growth in the coming decade.
Emerging markets will represent an even larger share of the growth in product categories, such as automobiles, that are highly mature in developed economies.
Figures like these create a real sense of urgency among many multinationals, which recognize that they aren’t currently tapping into those growth opportunities with sufficient speed or scale. Even China, forecast to create over half of all GDP growth in those seven developing economies, remains a relatively small market for most multinational corporations—5 to 10 percent of global sales; often less in profits.
To accelerate growth in China, India, Brazil, and other large emerging markets, it isn’t enough, as many multinationals do, to develop a country-level strategy. Opportunities in these markets are also rapidly moving beyond the largest cities, often the focus of many of these
1
In terms of purchasing-power parity
s t r a t e g y
p r a c t i c e
Is your emerging-market strategy local enough?
The diversity and dynamism of China,
India, and Brazil defy any one-size-fits-all approach. But by targeting city clusters within them, companies can seize growth opportunities. Yuval Atsmon, Ari Kertesz, and Ireena Vittal
2
Is your emerging-market strategy local enough?
Yuval Atsmon, Ari Kertesz, and Ireena Vittal
The diversity and dynamism of China, India, and Brazil defy any one-size-fits-all approach.
But by targeting city clusters within them, companies can seize growth opportunities.
Creating a powerful emerging-market strategy has moved to the top of the growth agendas of many multinational companies, and for good reason: in 15 years’ time, 57 percent of the nearly one billion households with earnings greater than $20,0001 a year will live in the developing world. Seven emerging economies—China, India,
Brazil, Mexico, Russia, Turkey, and Indonesia—are expected to contribute about 45 percent of global GDP growth in the coming decade.
Emerging markets will represent an even larger share of the growth in product categories, such as automobiles, that are highly mature in developed economies.
Figures like these create a real sense of urgency among many multinationals, which recognize that they aren’t currently tapping into those growth opportunities with sufficient speed or scale. Even China, forecast to create over half of all GDP growth in those seven developing economies, remains a relatively small market for most multinational corporations—5 to 10 percent of global sales; often less in profits.
To accelerate growth in China, India, Brazil, and other large emerging markets, it isn’t enough, as many multinationals do, to develop a country-level strategy. Opportunities in these markets are also rapidly moving beyond the largest cities, often the focus of many of these
1
In terms of purchasing-power parity