Emerging markets constitute approximately 80% of the global population, and represent about 20% of the world's economies. This rise of emerging markets has posed big challenges for the brands in the developed markets. But as there is an opportunity hidden in every challenge.

Challenge for brands going to emerging markets

• Understanding culture: Consumer from emerging markets thinks differently. Many are still looking to buy their first car, first television, friends and family influence purchase decisions, etc. To compete with the local brands that understand these consumers better, global brands need to study the culture and understand the thinking of these consumers.

 

• Localising product:  As the population of the emerging markets is huge, traditionally they have been treated as dumping grounds of the stock. But now because of accessible online communication and streamlined marketing channels these markets act and behave as developed markets. People demand products that they need and value. Therefore, it is imperative for global brands localise their products. McDonalds had to close down its newly launched India operations when they introduced their beef burger in 80% vegetarian nation. They had to go back with a vegetarian maharaja burger for Indians.

 

• Branding before launching: Emerging market consumers are brand conscious. So there is an opportunity and create anticipation about the brand before launching the product. Manchester United football club created a huge loyalty among the emerging markets before launching their products. Now they have more fan base in emerging markets than the developed markets.

Challenge to compete with emerging market brands

• Changing times: Brand Guru David Aaker says, “The next set of big global brands will come from emerging countries.” 127 companies from emerging markets feature on the Global Fortune 500 list of the world’s largest corporations by revenue. These companies have a huge advantage of scale, as most of them are conglomerates. And their strategies are not traditional.

 

• Strong sustainable brands: The developing countries are often associated with poor quality or unsound environmental practices, lack of marketing talent and leadership experience to build global brands. Therefore these upcoming brands have often survived global and local challenges before reaching the developed markets. This has compelled them to be stronger and flexible in terms of strategy, infrastructure, investment and business approach.

 

• Hardworking and cheap workforce: It is not a big secret that Apple produces its products in China. Emerging markets are often perceived as a good option for using the low cost labour. Emerging market brands easily tap into this workforce in their own backyard that works for 6 days a week for 10 hours a day. This gives them a huge competitive advantage.

 
We like it or not, these new challenges are coming. Global brands that will proactively and vigilantly address these challenges, will survive. Those who won’t might disappear in future. Brand is the gateway between these markets and stronger this gateway, easier for the brands to succeed.