Emerging Market Focus
Reaching Out to the World’s Millions of New Consumers
As many as two billion people could join the global middle class by 2030, chiefly from the emerging markets of Brazil, Russia, India and China. In the nearer term, whilst the UN Conference on Trade and Development expects the output of the U.S., Japan and the UK to grow by 2.1%, 0.9% and 0.6% in 2010, China and India are predicted to continue their pattern of strong growth, up 8.8% and 6.5% respectively. With millions of new middle class consumers positioned to exercise their newly earned purchase power, they’ll find relatively few homegrown and meaningful consumer brands and an uneven array of organized retail formats. An insatiable appetite for elements of Western lifestyle exists.
We take the view that the most compelling opportunities for value creation open to Western heritage brands lie in the emerging markets, and in particular, China, Russia, India, the Middle East and North Africa, where in the medium term, dollar for dollar, return on investment will be two to three times higher than that from mature markets such as North America, Western Europe and Japan.