With rising incomes and greater exposure to Western cultures, the habits, tastes and needs of the new middle class emerging market consumer evolve - shoppers seeking aspirational, high quality brands at the best prices. Following The Quest For Value in Developed Markets and Market Impact, we identify opportunities in the “affordable luxury” segment in emerging and developing countries, spanning many products and services, ranging from packaged foods and foodservice to fashion and electronics.
Growth in the number of middle class consumers – fuelled by factors such as economic progress, higher productivity, educational attainment, urbanisation and more working women – is driving up average income and spend.
Low income consumers coming out of poverty are increasing expenditure on a range of discretionary items, such as premium packaged foods, dining out, health and beauty, electronics, fashion and other products and services.
With rising incomes and greater exposure to Western culture, the habits, tastes and needs of middle class consumers are evolving. Shoppers are seeking aspirational purchases and accessible luxury brands at good value.
Emerging market shoppers are not prepared to compromise on quality: in general, they would rather save up their money to buy fewer prestige brands than purchase a large number of inferior products.
The rise of modern retail formats has opened up a market for high quality packaged foods, beauty and personal care, and other Western-style consumer products that were previously unattainable.
With regard to fashion and big ticket items, consumers are finding ways to obtain prestigious brands at lower prices, for example by shopping abroad, in sales events or via online marketplaces, factory outlets or resellers of pre-owned goods.
To make products affordable and appealing to emerging market consumers, companies are employing techniques such as paring down local production costs, sachet marketing, regional customisation and establishing an online presence.
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