• 1. New study by Roland Berger reveals: By 2030, developing countries and emerging markets will be home to 80% of the world's middle class
  2. Rising incomes, progressive urbanization and better availability of goods are changing consumption habits
  3. Consumer spending in these countries is likely to rise to USD 22 trillion by 2020
  4. To leverage the full growth potential of this trend, companies need to develop the right product portfolios and suitable marketing and sales strategies
  5. Mobile marketing is advancing fast: By 2016, companies in countries such as China and India will invest over USD 6 billion in it

Munich, January 17, 2013

By 2030, developing countries and emerging markets will be home to an estimated 80% of the world's middle class. And rising incomes, progressive urbanization and better availability of goods are fundamentally changing consumption habits. Experts thus predict that consumer spending in these regions will rise to USD 22 trillion by 2020. However, to best leverage these new growth opportunities, companies should analyze trends and market changes to better understand consumer needs. This is the only way they can develop suitable products and marketing and sales strategies for each market. Those are the key findings of the new publication "Consumers – How to reach emerging market consumers with new strategies", the latest study in the "8 Billion Business Opportunities" series by Roland Berger Strategy Consultants.

"In the next few years, we will see rapid population growth and a major improvement in the standard of living in emerging regions of the world," says Bernd Brunke, Partner and member of the Executive Committee of Roland Berger Strategy Consultants. "Accordingly, the consumers in these countries will buy more and demand high-quality products. To benefit from these growth opportunities, companies have to spot the key trends in these markets early on and turn them into suitable strategies for products, marketing and sales."

Varied customer needs determine the product portfolio

By 2030, developing countries and emerging markets will be home to around 80% of the world's middle class. This rise in the standard of living will bring with it a major shift in consumption habits. Experts thus predict that consumer spending in these up-and-coming countries will rise from USD 14 trillion to USD 22 trillion by 2020. "Branded goods will be in more demand," predicts Brunke. "Overall, consumers will have higher standards – especially in large cities. They will pay more attention to the origin of the product and values like quality, durability, and social and environmental aspects."

But it is not only the metropolitan regions of developing countries offer that offer major growth opportunities for the consumer goods industry. Even rural areas with a low per capita income and lower purchasing power can be promising sales markets for these companies. "In these regions, we expect in particular a boom in inexpensive, simple products, known as frugal products," explains strategist Brunke. "In view of these regional market differences, companies should thus adapt their product portfolio, sales and marketing accordingly in order to better meet customer needs."

Mobile marketing the key to success

One central trend that will substantially influence buying behavior in developing and emerging markets over the next few years is the widespread use of mobile telephony. By 2020, 2.5 billion people in developing countries will have Internet access; 6.5 billion in these regions will have their own mobile phone. "Consumers are increasingly doing their own research on new products and prices via the Internet. Mobile marketing will therefore play an ever more important role in market success," explains Brunke.

For example, companies will invest more and more in mobile marketing: by 2016, total corporate spending in this area will rise sixfold in countries like China and India – to over USD 6 billion. In Europe, companies will spend just USD 1 billion on mobile marketing in the same period.

Sales partnerships smooth the way market entry

In emerging markets, companies should take care to find the right sales strategy. Experts at Roland Berger thus recommend striking a good balance between local market requirements and the company's global orientation.

To tap into new markets, Western companies should go for strategic partnerships with local providers. After all, entering new markets can be a lengthy and complicated process, as Brunke warns. "Local partners can help you overcome bureaucratic, legal or tax hurdles more easily and thus help you drive expansion into new markets faster."