How to reach emerging market consumers with new ... - Roland Berger

Roland Berger Strategy Consultants
Low-income consumers can also be attracted by new service
portfolios. The Mexican cement manufacturer Cemex, for instance,
sells a versatile support package to low-income families to help
them build homes inexpensively. For just USD 14 a week, the
company provides inspections, materials warehousing, advice
from professional architects and the required cement products.
Unilever's African portfolio includes both affordable products and
training services. It offers low-cost food items, water-thrifty
washing powders and grooming products that suit local tastes. In
addition, it provides professional training to African entrepreneurs.
In 2011, the company opened an academy in Johannesburg that
each year will train 5,000 hairdressers who plan to open their own
salons. The academy also functions as a forum for testing new
products, business models and distribution methods.
In some areas, new methods of delivery have emerged, such
as medical services provided to poor rural communities by mobile
clinics. The Sanjeevan Mobile Clinic operating in parts of India
resembles a large bus. But inside it contains a fully equipped
doctor's office with X-ray, ultrasound, mammography or electrocardiogram
machines, a second treatment room and a small
darkroom to develop X-rays. It even has its own generator so it
can operate independently of the local power grid. Each mobile
clinic can service hundreds of temporary treatment sites. In
one year, for example, a single such vehicle traveling across the
Uttarakhand Province in northern India set up more than
800 medical camps, helping some 60,000 patients. Siemens
has equipped 18 of these mobile surgeries over the last 7 years.
Urbanization
Since 2008, over half the world's population has been living in
cities. Enterprising companies will discover that urban landscapes
offer many new business prospects. Supply chains, trade,
transportation and Internet connections are expanding, often
rapidly, to serve ever more city dwellers.
f5 The scale of this rapid change is startling: Some 200,000 people
will move to cities every day through 2030. Emerging markets will
see most of this migration. Between 2010 and 2030, the global
share of people inhabiting cities will climb from 45% to 55%. Most
will be in the developing world. Thus, 3.9 billion – or 80% – of 4.9
billion city dwellers worldwide will live in emerging and developing
countries as the world's total urban population grows by more
than 1.3 billion.
Looking at specific regions, Latin America will have the highest
share of urban residents as its cities grow to include 80% of the
total population by 2030. The share of urban residents in Africa will
increase from 39% to 48%, in India from 31% to 40%, in China from
49% to 69%, and in the rest of Asia from 44% to 56%. By 2025,
China will have no fewer than 139 cities with over a million
inhabitants, the largest number of such agglomerations of any
country in the world.
Urban house and household sizes are also changing. In India, for
instance, per household floor space has doubled every 14 years to
its current level of 31.5 m 2 . This is still two and a half times less
than China's 85 m 2 . According to projections by Credit Suisse, India
must construct three million houses and China five million houses
every year through 2030 to accommodate future population
growth.
Although global sanitary conditions have improved considerably
over the past several decades, 2.6 billion people still have no
access to toilets and 70% live in cities without proper sanitation
facilities. Lack of sanitation causes environmental pollution, social
problems, unsafe surroundings and substantially more potential
F4
In several Focus 20 countries, a large
share of the population needs better
access to sanitary facilities
Percentage of the urban population that
currently has no access to sanitary facilities (%)
Nigeria
India
China
Indonesia
64
46
42
37
Source: Euromonitor