Imagining 2012 – Asian demand surge

As part of a series of blogs looking ahead to seven experiences we think will help to define 2012, we look at the emotional and financial awakening of extremely powerful markets.

If you were born in the US or in Western Europe in the 1950s you were part of a societal revolution; the birth of consumer culture, a generation born of opportunity and options, beyond post-war austerity.

If you were born in rural China or India even 15 years ago, let alone 50, your life was hard. Often disconnected from the growth of bigger cities, existence was stubbornly tough for generations. Purchases were need not desire driven, even as consciousness of more ‘westernised’ lifestyles steadily increased.

Yet things are changing... fast. In India there are currently 350m people in rural areas earning between $2 and $5 per day, figures that will increase to 500m people earning between $2 and $12 per day. It is estimated the buying power of this group is over $50bn.

In China, people in rural areas comprise 70% of the total population, some 931m people, and incomes are rising too. In 2004, only 11% of Chinese people earned between $1,200 and $3,500. By 2010 that figure was 58%, and it’s rising.

Let’s put those numbers another way. In 2012, around 1.2bn people – or one in six people alive in the world – will live in rural India or China. These people will be living through their own societal and economic revolution as they seek to define themselves as unique; different from their past, from their family and from each-other.

This emotional and financial awakening is a pent-up tidal wave of demand sweeping across markets in China and India, where retail expenditure continues to outstrip even their extraordinary GDP growth. These new consumers literally can’t get enough. Huge rewards await brands that can ride the emotional needs of these ‘new-sumers’.

Connectivity and technology are leading the way, with mobile penetration increasing and m-commerce becoming a valuable tool in areas of limited infrastructure. Retail and apparel brands are in hot pursuit, while FMCG brands are having success with localised strategies.

The range of fake Apple stores, selling real Apple products that popped up in Kunming, China, clearly shows the passion for the ‘authentic’ brand experience is accelerating beyond the capabilities of the brand to establish distribution and deliver. Demand is almost out of control.

But this is not as simple as saying there are busloads of freshly minted consumers eagerly awaiting the next Apple delivery, or the next shipment of ‘happiness’ from Coke.

The demand waves are coming thick and fast and these new consumers will be easily carried away and fickle. In China for example, smartphone users are changing their phones at least every six months at least with Samsung, Nokia, Apple and HTC jockeying for ‘flavour of the month’ status, often at grey market prices.

The Asian demand surge will raise many brands with it, but it will wash away others just as easily. Only brands that root themselves into consumers’ meaningful experiences will benefit long-term.

Creation of bespoke products, at localised price points, with localised joint-ventures and leveraging of local distribution networks, will be part of a successful mix.

The fact is a demand revolution is under way, and over 1.2bn people are a part of it. This wave of ‘new-sumers’ are the biggest market in the world and they will be the drivers of global recovery in 2012 and growth for the next 50 years.

If you missed the first five trends that we expect to make up 2012 then don't fear. So far in the series we have discussed the pervasive world mood of edginess, the future of now, gamification, the blurring boundaries between the digital and real world and the future of haptic technology.