It doesn’t take a genius to work out that the world is changing.
PricewaterhouseCoopers (PwC) recently pushed the envelope and published an article called “The long view: how will the global economic order change by 2050?” In which they predict a list of the most powerful economies in the world by 2030. They do make predictions about 2050 but we’ll take 2030 for now.
Two things stand out. The first is that four of the top five economies will be in Asia. Although that’s only one more than now. The second is that sandwiched in between Japan and Russia, and way ahead of the UK and Germany, sits Indonesia.
There’s nothing revelatory about backing Indonesia. It’s one of the MIST (Mexico, Indonesia, South Korea and Turkey) countries, its GDV is growing at twice the rate of many developed markets although not at the rate of 6+ a couple of years back, and it has a population not much smaller than the USA. Its emergence has been rapid and looks set to continue.
But being part of MIST makes it part of the second wave. China and India are considered part of the original wave, but are still considered emerging. So when exactly does a country stop being emerging? When has it emerged? Wikipedia classified an emerging market as “a country that has some characteristics of a developed market, but does not meet standards to be a developed market.”
“Standards” is an interesting word isn’t it. China and India are currently the first and third most powerful economies in the world and by 2030 will occupy the top two spots. But we can’t consider them developed because they don’t meet the other “standards”. 3.7 million children live in poverty in the UK versus 9 million in China. But that’s against a population of 67 and 309 million respectively. So who’s emerging and who’s developed again?
But this isn’t the time to get political. And I’m going to get to the point now – it seems that many multinational brands have grasped the opportunity open to them by the emerging markets, but many haven’t.
Let’s take Brand X – it has an annual global marketing budget of US$3.3 billion. It chooses to spend 40 million of that 3.3 million in Indonesia. That means that this rapidly developing, diverse, interesting country is accounting for 0.1% of the brand’s annual spend. Oh and by the way, that brand that spends US$40 million there is the one of the top spenders
Those of us working with these markets are constantly battling to uncover the insight that will lead our brand into the heart of the people there. We’re often steeped in research about people, their decisions and their motivations in the developed world (the ones with the standards remember), but when it comes to finding out what we need about the merging ones, it’s a little tougher.
Maybe it comes down to budget. It always seems to come down to the budget.
Which for some multinational brands remain weighted towards the developed world when it feels like the opportunity lies elsewhere.
We’re surrounded by articles detailing just how much a brand has shifted its marketing spend into digital. We get it, people like the intersurf, they spend time there, it’s the place you’re most likely to reach your issue. We understand.
But honestly the issue doesn’t necessarily feel like how the money is being spent but where it’s being spent. The more pertinent point is that despite predictions….no, not predictions, facts being readily available around the power of newer territories brands aren’t necessarily getting the financial support they need where they need it compared to their developed neighbours.
This isn’t about speculating to accumulate anymore. The speculation is done, validated and available to see.
This is about a fairer version of dividing and conquer.
The writer is Andrew Boatman, VP & group account director, GSK, Grey Group.