(Marketingmagazine.com.my) – Ogilvy & Mather recently launched a new report identifying 12 ‘velocity’ markets (Ogilvy’s V12) that will be key to middle-class consumer growth over the next decade.
According to the agency the new report is in light with the ‘BRIC’ (Brazil, Russia, India and China) index of markets outliving its usefulness. The new ranking according to Ogilvy provides a fresh perspective on the future of global growth while challenging some of the outdated notions about “emerging markets”.
According to the report, “A billion new middle-class consumers will emerge in these 12 countries in the coming decade, creating a critical tipping point as the middle-class moves from a minority to the majority of the local population in many of these markets.”
Looking at new benchmarks of economic growth
Ogilvy’s V12 ranking goes beyond traditional economic and banking indicators and is based upon measuring of middle-class growth in terms of income, rather than assets, using a Purchasing Power Parity (PPP) methodology – a measurement widely accepted by the IMF, the UN and the World Bank – to equalize the purchasing power of different currencies.
Critically, the ranking also assessed markets based upon the velocity of growth and change – an increasingly important factor that some companies have grossly underestimated so far in their global growth plans.
The 12 velocity markets identified herald a shift to South Asia as the epicentre of future middle-class growth. Centred principally in India, but inclusive of Pakistan, Bangladesh, Myanmar, Indonesia and the Philippines and extending up to China through to Egypt, Nigeria, Mexico, and Brazil in the opposite direction, the Velocity 12 markets represent a vast arc of future growth.
The next generation of middle-class consumers
Over the next decade, these 12 markets will be the source of the next billion middle-class consumers, creating a critical tipping point as the middle-class move from a minority to the majority of the local population in many of these markets.
“The Velocity 12 research shows the world as it will be in the not-too-distant future. A billion new middle class members will change its shape. It will become, for instance, much more orientated to South Asia, and especially to India. Most Western businesses are simply not used to thinking this way. This means finding a new lexicon of growth, as the phrase ‘emerging market’ no longer describes this new reality. ‘Velocity’ better describes the real transformation in these markets,” said Miles Young, Ogilvy & Mather Worldwide Chairman. “These new dynamics are particularly relevant to China and Chinese businesses as they look to grow their footprint along the route of the ‘Belt & Road’ and beyond. Successfully executing this expansion is critical for China’s transition to a new model for growth in the 21stcentury.”
Understanding the underrepresented
The Report features the results of a first-of-its-kind middle-class attitude survey conducted across all of the 12 markets amongst 3,600 consumers. It also addresses a range of V12 social, cultural, technological and lifestyle trends that companies need to know, both to size the prize for their brands and to figure out how to capture it. This includes identifying the key role that women will play as social change agents and entrepreneurs, with purchasing power crossing cultural, religious and demographic divides. Understanding the progressive Muslim consumer – the Muslim Futurists – as a key consumer segment will be crucial to succeed in the V12. Seeing cities, more than countries, as the unit of invention, entrepreneurship and investment will also alter trade and investment patterns in these markets.
All of this will place new demands on companies to master greater diversity and to navigate new or less familiar markets. V12 provides forward-looking Velocity Marketing Principles, to address the transformation of brands in a reshaping world.
The Ogilvy & Mather Velocity 12 Report: The Reshaping of Global Growth was compiled by a variety of Ogilvy contributors and outsides experts across the world, inclusive of economist Dr. Sujit Bhalla. It is based on proprietary research and a variety of best practice client cases. To download the full report click here
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