Reprint: R1012K
Multinational retailers have been slow to understand consumers in the developing world. As a result, they’ve been vulnerable to local competitors that know how their shoppers think, what they crave, and how they buy. These local retailers offer some valuable lessons:
Forget the myth that the high end is the most lucrative segment. In emerging markets, the number of affluent consumers who could champion your product is small, and the wealthy tend to favor shopping trips abroad. Instead, aim your products at low-income segments from the start.
Cater to consumers’ tendency to buy a lot of the cheapest products and a little of the best by providing decent quality at the low end and aspirational choices at the high end.
Turn your stores into centers of learning, where shoppers can fill the gaps in their product knowledge.
Expect the unexpected and develop quick reflexes—you’ll need them to deal with the rapid market expansion and demographic change of emerging economies.
Sure, you’ve crafted detailed marketing plans for your products in those fast-growing emerging economies, but do you know how consumers will respond in the store aisles? If you don’t, you’re vulnerable to competitors, particularly local ones, who know how emerging market shoppers think, what they need, what they crave, and how they buy.
