London, New York...Tehran? Why marketers should be keeping an eye on developing cities
Marketing and media industries have historically infiltrated emerging cities too late in the game, according to the Economist Intelligence Unit’s Alasdair Ross. But they should be taking advantage of the data at their disposal now to actively identify the overlooked markets where brands could prosper and shape consumption habits, rather than trying to play catch-up down the line.
The global product director delivered the key note speech at this year’s Festival of Marketing Global, giving the the industry crowd a raft of statistics on the potential of previously ignored cities such as Addis Ababa, Hangzhou and Karachi.
Speaking to The Drum, Ross highlighted that brands and agencies should analyse a range of metrics when searching for a new emerging market in which to do business. "What you should really be considering is things like household income, but also attitudinal things," he said.
"For instance if you're selling alcohol. [You should ask:] "How are attitudes to alcohol changing? Are people moving up the value chain? Are they making that step from beer to spirits? From wine to fine wine? You need to understand how much money do people have their pockets, to what are they willing to spend it on."
Ross also added that the marketing and media industries should understand their roles in the most basic ways – selling stuff to consumers – in order to take full advantage of a developing city's potential.
"Emerging markets buying low value things like detergents and bicycles and basic clothes," he explained. "But of course they gradually move up the scale and they buy more and more expensive things.
"By the time by the time you have a mass of consumers buying air conditioning units and Lexus cars and houses and so on, it's probably actually too late actually for media companies and advertising companies to get deeply involved. Brands as well need to be ahead of the consumption rather than responding to it behind the curve."
When asked which places marketers should keep an eye on over the next 20 years, Ross had a simple answer: China.
He commented: "China is growing at a real rate of knots. It's slowed down a little but it's still adding millions of consumers to the global market. And it's dragging up a lot of other markets with it: all over Asia – Thailand, Vietnam, Indonesia - you have the same effect."
Ross added that brands and agencies shouldn't be afraid to also tackle North Africa and Sub-Saharan Africa ("Lagos is a very hard place to operate but you can't ignore it," he said), as well as Tehran.
"Iran has been off the off the map for a while because of sanctions and the political difficulties in the country for many years," he explained.
"And yet now sanctions have been lifted, Iran is really shifting in terms of its political stance. It's a big market. Hotels are queuing up to build. So Tehran is an outlier that people probably should be focusing on."