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Developing economies: impactful, fluctuating and maturing

While to have a strong presence in the developed markets is very important to any global brand, the weight of developing economies continues to be impactful internationally. Developing Asia including India plus the Chinese market weigh in with about 41% of all smartphone purchases in the first half of 2018.

Telecom represented the fastest growing product group in China and India

With 12% revenue CAGR over this period, Telecom represented the fastest growing product group in China and India. In case of major domestic appliances in the first half of 2018, it is the recoveries in Russia (+11 percent) and in LATAM (+9 percent) that are particularly exceptional. Also APAC stayed on a growth track contributing 66 percent of the total growth. With regards to the TVs, LATAM fueled the global growth heavily. Those countries contributed in the first half of 2018 with a sales value growth of 25 percent towards the global turnover increase in the TV market.

These market growth opportunities do not come without a risk though. In the TV market, for example, LATAM sales unit growth fluctuated between +19 percent year on year in 2014 and -28 percent in 2015, to be up again at +35 percent in the first half of 2018. In case of CIS region, the drop in 2015 in the TV product category was even -47 percent in 2015 to be up at +15 percent in 1H2018.

Developing economies are reaching higher levels of market penetration of mobile phone subscriptions that creates new market dynamics altogether across all our panel market product categories. Designing and retailing technology and durable goods for these markets is increasingly becoming more about finding the right replacement and upgrade proposition rather than identifying offering for the first time ownership.

Developing economies are maturing

Hand in hand with governments’ focus on sustainable reforms that is linked to economic development and resulting in growing disposable income and growing middle class population, developing economies are maturing. While connecting the unconnected continues, migrating customers to data plans, replacements, upgrades, move to premium priced devices and creating suite of additional services generates pockets of growth that are shifting to where the money is.

 

This blog has been written by the Strategic Insights team.

 

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