How to Market to Asia’s Masses
Thursday, August 9, 2007
Don’t Overlook the Fact That Even Low-Income Consumers Have Needs They Want Help Meeting. For decades, the majority of multinational corporations marketing in Asia have focused on the affluent minority, those who tend to live in urban areas and have shopping habits and product needs that are quite similar to those in the West. But by focusing only on the upper-income urbanites, marketers are missing a vast opportunity at the bottom of the economic pyramid.
About 4 billion people in the world earn $2,000 a year. Across all of Asia — whether it be China, India, Indonesia or Vietnam — product innovation and new ways of thinking make it possible to meet these people’s needs ethically, fairly and profitably.
To understand these consumers’ routines, we spent more than half a year living with them and listening to their stories. We packaged our findings into two documentaries — one made in China, the other in India. We also talked to our clients, including Procter & Gamble and Wrigley, all pioneers in this area. We interviewed commentators including corporate strategist and University of Michigan Professor C.K. Prahalad, who holds that we penalize “the poor” when we don’t give them the choice to buy high-quality, mass-marketed goods.
Most important, we put real names, lives and faces to the statistics, as all too often we as marketers forget that low-income consumers are everyday people.
Living within one’s means
Even though the incomes of these people are extremely low by our standards, they see themselves as average. They are as well off as most people in their villages or towns. Looking at the world from their point of view, the important thing is not that they earn about $2,000 a year but that they can live on $2,000 a year.
Although they are significantly less affluent than we are, in many other respects they are not different. Their aspirations are the same as the ones we have: to raise their children, to live well, to be respected by their peers — and yes, even for the less affluent, brands are a desirable way to signal their achievements — to learn and grow, to enjoy the things that people around the world enjoy. Of Chinese consumers earning $200 per month, 84% have a mobile phone and 46% have a home computer.
You might wonder how people with such low incomes generate this free cash. For a start, they don’t pay much tax and generally don’t pay much (if anything) for housing. Most live in small towns and cities where fresh food in the market is cheap. Child care is provided by a member of the extended family. They can and do spend their money on things that are important to them, affording goods if the right ones are produced for them to buy.
Importantly and probably unexpectedly, these consumers are extremely savvy about what to spend money on and what to save for. One Chinese woman is saving 40% of her money for her child’s schooling. In India, a village woman with a cellphone charges others to use it and has a small, profitable business.
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