How to reach emerging market consumers with new ... - Roland Berger
How to reach emerging market consumers with new ... - Roland Berger
How to reach emerging market consumers with new ... - Roland Berger
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<strong>Roland</strong> <strong>Berger</strong> Strategy Consultants<br />
Low-income <strong>consumers</strong> can also be attracted by <strong>new</strong> service<br />
portfolios. The Mexican cement manufacturer Cemex, for instance,<br />
sells a versatile support package <strong>to</strong> low-income families <strong>to</strong> help<br />
them build homes inexpensively. For just USD 14 a week, the<br />
company provides inspections, materials warehousing, advice<br />
from professional architects and the required cement products.<br />
Unilever's African portfolio includes both affordable products and<br />
training services. It offers low-cost food items, water-thrifty<br />
washing powders and grooming products that suit local tastes. In<br />
addition, it provides professional training <strong>to</strong> African entrepreneurs.<br />
In 2011, the company opened an academy in Johannesburg that<br />
each year will train 5,000 hairdressers who plan <strong>to</strong> open their own<br />
salons. The academy also functions as a forum for testing <strong>new</strong><br />
products, business models and distribution methods.<br />
In some areas, <strong>new</strong> methods of delivery have emerged, such<br />
as medical services provided <strong>to</strong> poor rural communities by mobile<br />
clinics. The Sanjeevan Mobile Clinic operating in parts of India<br />
resembles a large bus. But inside it contains a fully equipped<br />
doc<strong>to</strong>r's office <strong>with</strong> X-ray, ultrasound, mammography or electrocardiogram<br />
machines, a second treatment room and a small<br />
darkroom <strong>to</strong> develop X-rays. It even has its own genera<strong>to</strong>r so it<br />
can operate independently of the local power grid. Each mobile<br />
clinic can service hundreds of temporary treatment sites. In<br />
one year, for example, a single such vehicle traveling across the<br />
Uttarakhand Province in northern India set up more than<br />
800 medical camps, helping some 60,000 patients. Siemens<br />
has equipped 18 of these mobile surgeries over the last 7 years.<br />
Urbanization<br />
Since 2008, over half the world's population has been living in<br />
cities. Enterprising companies will discover that urban landscapes<br />
offer many <strong>new</strong> business prospects. Supply chains, trade,<br />
transportation and Internet connections are expanding, often<br />
rapidly, <strong>to</strong> serve ever more city dwellers.<br />
f5 The scale of this rapid change is startling: Some 200,000 people<br />
will move <strong>to</strong> cities every day through 2030. Emerging <strong>market</strong>s will<br />
see most of this migration. Between 2010 and 2030, the global<br />
share of people inhabiting cities will climb from 45% <strong>to</strong> 55%. Most<br />
will be in the developing world. Thus, 3.9 billion – or 80% – of 4.9<br />
billion city dwellers worldwide will live in <strong>emerging</strong> and developing<br />
countries as the world's <strong>to</strong>tal urban population grows by more<br />
than 1.3 billion.<br />
Looking at specific regions, Latin America will have the highest<br />
share of urban residents as its cities grow <strong>to</strong> include 80% of the<br />
<strong>to</strong>tal population by 2030. The share of urban residents in Africa will<br />
increase from 39% <strong>to</strong> 48%, in India from 31% <strong>to</strong> 40%, in China from<br />
49% <strong>to</strong> 69%, and in the rest of Asia from 44% <strong>to</strong> 56%. By 2025,<br />
China will have no fewer than 139 cities <strong>with</strong> over a million<br />
inhabitants, the largest number of such agglomerations of any<br />
country in the world.<br />
Urban house and household sizes are also changing. In India, for<br />
instance, per household floor space has doubled every 14 years <strong>to</strong><br />
its current level of 31.5 m 2 . This is still two and a half times less<br />
than China's 85 m 2 . According <strong>to</strong> projections by Credit Suisse, India<br />
must construct three million houses and China five million houses<br />
every year through 2030 <strong>to</strong> accommodate future population<br />
growth.<br />
Although global sanitary conditions have improved considerably<br />
over the past several decades, 2.6 billion people still have no<br />
access <strong>to</strong> <strong>to</strong>ilets and 70% live in cities <strong>with</strong>out proper sanitation<br />
facilities. Lack of sanitation causes environmental pollution, social<br />
problems, unsafe surroundings and substantially more potential<br />
F4<br />
In several Focus 20 countries, a large<br />
share of the population needs better<br />
access <strong>to</strong> sanitary facilities<br />
Percentage of the urban population that<br />
currently has no access <strong>to</strong> sanitary facilities (%)<br />
Nigeria<br />
India<br />
China<br />
Indonesia<br />
64<br />
46<br />
42<br />
37<br />
Source: Euromoni<strong>to</strong>r