Targeting Profitable Consumer Trends In Brazil, Russia, India and China

This publication has been discontinued on July 19, 2011.

Introduction

Abstract

Overview

Introduction

Brazil, Russia, India and China (BRIC) markets have huge potential for the development of a stable consumer society that can be profitably targeted by consumer packaged goods players across the globe. Although the region requires further social cohesion and economic development to fully stabilize, players that act quickly and tailor their offering can reap significant rewards.

Scope

• Quantitative consumer trend data across Brazil, Russia, India and China - with historical and future forecast focus
• Qualitative analysis of consumer group dynamics and the implications of these for companies seeking to target the lucrative BRIC consumer marketplace.
• Detailed analysis of consumer lifestyles, attitudes and needs affecting the packaged goods sectors and the influence of these on buying behavior.
• Detailed Action Points pinpointing how to fine tune your strategy and devise effective marketing concepts in this region.

Highlights

Wealth in Russia is still low, but improving. The wealth contained among the bottom 40% of the Russian population almost matches that of the middle quintile which is a pattern often repeated in established markets with stable middle classes. These patterns point towards a middle class of significant depth and affluence over the coming years.

Hypertension, whilst exhibiting lower rates of growth across the BRIC countries than rises in obesity, is a larger problem overall in Brazil, India and China. Russian hypertension incidence is about 25% lower than obesity. In China it affects 21% of the total population and will rise by another 32 million cases by 2010.

product branding and packaging will need to be unique and tamper-proof to overcome the counterfeit problem. Selling trust and product quality to the middle class in any BRIC market will be arguably more important than in developed markets where despite growing consumer cynicism the safety and quality of products is now often taken for granted.

Reasons to Purchase

• Gain insight into the key issues and future development of an established consumer society in the BRIC region.
• Identify which consumer groups to target for profitable future growth.
• Improve your marketing strategy by tailoring your offering to the most important consumer trends.

Table of Contents

• CHAPTER 1 EXECUTIVE SUMMARY
  • The hot topic
  • The future decoded
    • The middle class is emerging as a significant group in the BRIC region
    • The BRIC region will have an increasingly aging population in the future
    • Health will become an increasingly important issue
    • BRIC countries have distinct national traits
  • Action points
• CHAPTER 2 THE FUTURE DECODED
  • Context - understanding the BRIC region
    • The emergence of the ' BRIC' moniker
    • PESTLE analysis of the BRIC region
    • Socio-demographic overview
      • Population overview
      • Family status overview
      • Ethnic group overview
  • TREND: There is a burgeoning middle class emerging in the BRIC markets
    • The potential for middle class expansion varies by BRIC market
    • Brazil' s open and relatively stable democracy bodes well for the future development of the middle class
      • Brazil' s economy is improving strongly
      • A disparity of income has long been the reality of modern Brazil
      • Income inequality is reducing, creating greater potential for a sizeable middle class
      • Brazil' s income distribution is uneven but is fast improving
      • Rising home ownership is a key opportunity in Brazil
      • Increasing scarcity of resources should be beneficial to Brazil' s commodity-based wealth
      • Environmental concerns may slow Brazil' s economic and infrastructural development
    • The once precarious state of the middle class in Russia is now stabilizing
      • Income equality in Russia is improving quicker than in any other BRIC market
      • The growing wealth of Russia is driving the broadening of the middle class
      • Growth in the housing market signals opportunities in household-related products
      • Russia' s improving political and economic stability favors the continuance of a middle class
      • Russia' s economy and society are opening and transcending its borders
    • Of all BRIC markets, India' s knowledge economy has the most stable middle class potential
      • India' s investment in its service industries can underpin the growth of its middle class
      • India' s cultural diversity can be a positive factor in establishing foreign brands in the ' consumerscape'
      • India' s income inequality is now less severe than in many European countries
      • India' s low GDP suggests a broad but shallow middle class
      • The housing market in Indian cities parallels the patterns seen in the West
    • China' s middle class is strongest in urban areas
      • Rising income inequality in China is indicative of the rising urban middle class
      • China' s manufacturing success is fueling the urban spending boom
      • Consumer aspirations for foreign brands are growing
      • China' s entrepreneurial culture is a dual edged sword for brands
      • China' s central planning can help economic growth with a strong uniting vision
  • TREND: There is an aging of BRIC populations
    • The rapid evolution of middle classes, combined with a demographic shift in favor of seniors, will enable BRIC countries to emulate Western markets
    • BRIC countries have broadly enjoyed young population bases in the past
      • In 1990 the BRIC region was characterized by a young population base
    • Overall there is an aging of the BRIC region but there is some important variance
      • BRIC countries do not match Western European aging of populations but this pattern is changing
      • The continued emergence of a significant senior group is evident to 2010
    • Brazil is experiencing a rapidly aging population
    • Russia - declining life expectancy and birth rates create a worrying population decline
      • A mortality crisis among Russian males emphasizes the growing market importance of women
    • India - the aging population is a concern for the longer term rather than the medium term
    • China - rapid aging of the population is having a fundamental impact
    • An aging population brings with it new needs
      • Older consumers are more likely to trade up
      • Older consumers will increasingly focus on appearance
      • Convenience is important to older consumers too
      • There will be a need for stronger food flavors
      • BRIC markets have not yet reached the post-materialist stage
  • INSIGHT: Dietary patterns in the BRIC countries are highly diverse
    • Meat and fish consumption varies between BRIC countries
    • Fruit and vegetable consumption and preferences vary widely
      • Fruit consumption in the BRIC region is relatively low but high levels of vegetables are consumed
      • Fruit preferences vary widely but root vegetables are popular in all BRIC countries
    • Bottled water consumption is rising rapidly in India and China with slower growth in Russia and Brazil
      • The bottled water market in Brazil is driven by safety and choice, although consumers only drink a limited amount
      • Consumption of bottled water in Russia is low
      • Bottled water consumption in India is limited, but sales are increasing rapidly among affluent consumers
      • Growth in China' s bottled water market is not always driven by necessity
  • INSIGHT: Health is a growing concern, particularly as ' Western' diseases proliferate in this region
    • Obesity and hypertension are increasingly prevalent in the BRIC countries
    • Sales of nutraceuticals and dietary supplements are growing across the BRIC region
  • INSIGHT: Convenience is of growing importance to select consumers on select occasions
    • BRIC consumers are beginning to embrace convenience focused meal solutions
      • Ready meals are not popular with Brazilian consumers, although frozen meals have had a limited impact
      • Ready meals are playing an increasing role in Russia
      • Penetration of ready meals is very low in the Indian market
      • Western style ready meals are a limited trend in China
    • Consumer attitudes towards frozen foods are developing as such foods become more widely available
      • Brazilian consumers are prepared to eat frozen food, particularly meat
      • The Russian frozen food market is being driven by the appliance market
      • Indian consumers have not adopted frozen food, although frozen pizza and meat have begun to gain popularity
      • Frozen food has a small share of the food market in China
    • A large proportion of BRIC consumers function without washing machines and dryers
      • Machine usage is uncommon in BRIC countries
      • Hand-washing remains common in BRIC countries
    • Outsourcing laundry to domestic helpers remains prevalent in all BRIC countries
      • Many Brazilians outsource the clothes laundering process to domestic helpers
      • Affluent consumers in Russia have begun to use domestic help for clothes laundering chores
      • Use of domestic help is very common among Indian affluent consumers
      • There is a growing market for domestic help in China, although launderettes remain popular
    • Approaches to washing and use of detergents varies between countries
      • The use of powder or liquid clothing detergent is dependent on consumer taste in the BRIC countries
      • Clothing is often separated before washing, based on color or quality
    • Clothing odor and hygiene is a problematic issue for BRIC consumers
      • Stain removal is a key selling factor for clothing detergents in BRIC countries
      • Common causes of bad smelling clothes in BRIC countries include body odor and cooking smells
    • Dishwashers are seen as aspirational and are rarely used by BRIC consumers
      • Few Brazilians own a dishwasher, or are convinced of its usefulness
      • Many Russian consumers do not see a need for dishwasher appliances, although there is a potential market from high income women workers
      • Given the low cost of domestic labor, Indian consumers will need to be persuaded of the added value offered by dishwashers
      • The dishwasher market is only just emerging in China
  • INSIGHT: Sensory and pleasure focused consumption is increasingly prominent
    • Consumption of pleasure orientated food and drink is growing as more consumers are able to trade up
    • Food and drink flavor preferences vary slightly by country
    • Consumer packaged goods marketing claims highlight shifting preferences among BRIC consumers
    • Takeaway food occasions are becoming popular in BRIC countries
      • Takeaway food is gradually becoming more popular with Brazilian consumers
      • Fast food takeaway restaurants offering a range of cuisines are increasingly popular in Russia
      • Take up of takeaway and delivery food in the Indian market is low, although outsourcing centers are leading the growth of takeaway and delivery services
      • Take away food is becoming more popular with Chinese consumers
    • Local foods are the most heavily consumed while other ethnic dishes are gaining in popularity
      • Street food, pizza and Chinese food are very popular with Brazilians, while Indian and UK food is not so popular
      • Russian tastes are broadening to include Chinese and Indian food
      • Pizza and Chinese foods are popular foreign dishes in India, which remains partial to street foods
      • Indian takeaway food is one of the more successful ethnic cuisines in China, while other foreign foods are less popular
  • INSIGHT: Consumption of food, drinks and personal care reveal significant age and gender differences
    • Personal care consumption by age and gender
      • Personal care consumption is dominated by 15-44 year olds
    • Alcoholic drinks consumption by age and gender
      • The 55+ age group accounts for the least amount of alcoholic drinks consumption in the region
    • Soft drink consumption by age and gender
      • The 15-24 group dominates soft drink consumption in the BRIC region
    • Confectionery and savory snacks consumption by age and gender
      • Russia has a different age pattern to the other BRIC countries in terms of confectionery and savory snacks consumption
    • Prepared meals consumption by age and gender
      • Consumption of prepared meals varies greatly by BRIC country
  • Conclusions
• CHAPTER 3 ACTION POINTS
  • Introduction
  • ACTION: Prepare for the future with higher premium products as the middle classes broaden and deepen
    • Link aspirational brands with aspects of popular culture and fashion
  • ACTION: Take existing mature brands into new BRIC markets to develop as "cash cows" in select cases
  • ACTION: Take steps to protect intellectual property
    • Work with regulating authorities and joint venture partners to ensure the integrity of their brands
  • ACTION: Target aging populations via product development and marketing communications
    • Target the older consumer group - their strategic importance will only grow
    • Make older consumers more inclusive with "ageless marketing"
      • BRIC seniors may have more limited comprehension of the point of persuasion
    • Respond to the veneration of seniors in certain societies
      • Stress the positive aspects of maturity
    • Companies that adapt the quickest will thrive
  • ACTION: Target the health and wellness trend
    • Look to re-formulate existing products and market them as better-for-you alternatives
      • Clearly communicate ' better for you' product development techniques in order to gain consumer trust
      • Make health a key focal point with future prepared meal innovations
      • Address parents' concerns over health and nutrition
    • Introduce consumer education programs about healthy eating and to build long-term brand trust
  • ACTION: Target the need for time-saving devices and services
    • Incorporate convenience orientated product attributes into your offerings
      • Alter product formats to make them suitable for on-the-go consumption
      • Target the convenience attributes that consumers value and promote them overtly in marketing literature
    • Promote convenient products as a way of allowing consumers to enjoy more family time
      • Communicate ' happiness' and ' parental interaction' in ads
  • APPENDIX
  • Definitions
  • Research methodology
  • How to contact experts in your industry
  • List of Tables
    • Table 1: Population growth in the BRIC region (millions), 2000-2010
    • Table 2: Population by family status in the BRIC region (% of total population), 2000-2010
    • Table 3: Population by ethnic background in the BRIC region (% of total population), 2000-2010
    • Table 4: GDP per capita (US$), 2000-2010, Brazil and the US
    • Table 5: Gini co-efficient, 2000-2010, Brazil
    • Table 6: Income quintile distribution (US$), 2005, Brazil
    • Table 7: Home occupancy ownership (%) and average home price (US$), 2000-2010, Brazil and the US
    • Table 8: Gini co-efficient, 2000-2010, Russia
    • Table 9: Income quintile distribution (US$), 2005, Russia
    • Table 10: GDP per capita (US$ 1995), 2000-2010, Russia and the US
    • Table 11: Home occupancy ownership (%) and average home price (US$), 2000-2010, Russia and the US
    • Table 12: Gini co-efficient, 2000-2010, India
    • Table 13: Income quintile distribution (US$), 2005, India
    • Table 14: GDP per capita (US$), 2000-2010, India and the US
    • Table 15: Home occupancy ownership (%) and average home price (US$), 2000-2010, India and the US
    • Table 16: Gini co-efficient, 2000-2010, China
    • Table 17: Income quintile distribution (US$), 2005, China
    • Table 18: GDP per capita (US$), 2000-2010, China and the US
    • Table 19: Home occupancy ownership (%) and average home price (US$), 2000-2010, China and the US
    • Table 20: Brazil population forecast (millions) by age band, 2006-2010
    • Table 21: Brazil population by age and gender (%), 2006 and 2010
    • Table 22: Brazil life expectancy by gender, 2001-2010
    • Table 23: Russia population forecast (millions) by age band, 2006-2010
    • Table 24: Russia population by age and gender (%), 2006 and 2010
    • Table 25: Russia life expectancy by gender, 2001-2010
    • Table 26: India population forecast (millions) by age band, 2006-2010
    • Table 27: India population by age and gender (%), 2006 and 2010
    • Table 28: India life expectancy by gender, 2001-2010
    • Table 29: China population forecast (millions) by age band, 2006-2010
    • Table 30: China population by age and gender (%), 2006 and 2010
    • Table 31: China life expectancy by gender, 2001-2010
    • Table 32: Meat and fish consumption per capita in the BRIC region (kilograms), 2000-2010
    • Table 33: Fruit and vegetable consumption per capita in the BRIC region (kilograms), 2000-2010
    • Table 34: Most popular five vegetables and fruits by consumption, Brazil 2005
    • Table 35: Most popular five vegetables and fruits by consumption, Russia 2004
    • Table 36: Most popular five vegetables and fruits by consumption, India, 2005
    • Table 37: Sales of bottled water in Brazil by type (Liters, millions), 2000-2010
    • Table 38: Bottled water consumption in Russia (Liters), 2000-2010
    • Table 39: Sales of bottled water in Russia by type (Liters, millions), 2000-2010
    • Table 40: Sales of bottled water in India by type (Liters, millions), 2000-2010
    • Table 41: Sales of bottled water in China by type (US$m), 2000-2010
    • Table 42: BRIC countries, incidence of obesity (millions), 2000-2010
    • Table 43: BRIC countries, incidence of hypertension (millions), 2000-2010
    • Table 44: Nutraceutical and OTC vitamin & mineral sales in the BRIC region (US$ millions), 2000-2010
    • Table 45: Nutraceutical and OTC vitamin & mineral expenditure per capita in the BRIC region (US$/head), 2000-2010
    • Table 46: Ready meal sales per annum, Brazil, 2000-2010
    • Table 47: Ready meal sales per annum, Russia, 2000-2010
    • Table 48: Ready meal sales per annum, India, 2000-2010
    • Table 49: Ready market value by type (US$ m), China, 2000-2010
    • Table 50: Frozen food sales per annum, Brazil, 2000-2010
    • Table 51: Frozen food sales per annum, Russia, 2000-2010
    • Table 52: Frozen food sales per annum, India, 2000-2010
    • Table 53: Frozen food sales per annum, China, 2000-2010
    • Table 54: Clothing detergent sales by type in Brazil (US$m), 2000-2010
    • Table 55: Clothing detergent sales by type in Russia (US$m), 2000-2010
    • Table 56: Product features of clothing detergents launched in India, Jan 2001- Aug 2006
    • Table 57: Consumption of pleasure orientated food and drinks by volume in the BRIC region, liters million, 2000-2009
    • Table 58: Brazil: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06
    • Table 59: Russia: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06
    • Table 60: India: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06
    • Table 61: China: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06
    • Table 62: Brazil: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06
    • Table 63: Russia: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06
    • Table 64: India: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06
    • Table 65: China: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06
    • Table 66: Takeaways in Brazil, 2004-2009
    • Table 67: Takeaways in China, 2005-2010
    • Table 68: Definitions of terms used in the report
  • List of Figures
    • Figure 1: PESTLE analysis of Brazil
    • Figure 2: PESTLE analysis of Russia
    • Figure 3: PESTLE analysis of India
    • Figure 4: PESTLE analysis of China
    • Figure 5: Brazil' s economy is based on services and commodity resources
    • Figure 6: Over 50s as a proportion of total population (%), BRIC countries and Western Europe, 1990
    • Figure 7: Over 50s as a proportion of total population (%), BRIC countries and Western Europe, 2006
    • Figure 8: Over 50s as a proportion of total population (%), BRIC countries and Western Europe, forecast 2010
    • Figure 9: Still water dominates China' s emerging bottled water market, 2000-2010
    • Figure 10: Clothing detergents in Brazil highlight the fact that they are designed for use in washing machines
    • Figure 11: China' s laundry detergent market is fragmenting into specialist products
    • Figure 12: BRIC countries: value of personal care consumption by age group (% value), 2004
    • Figure 13: BRIC countries: value of personal care consumption by gender (% value), 2004
    • Figure 14: BRIC countries: value of alcoholic drinks consumption by age group (% value), 2005
    • Figure 15: BRIC countries: value of alcoholic drinks consumption by gender (% value), 2005
    • Figure 16: BRIC countries: value of soft drinks consumption by age group (% value), 2004
    • Figure 17: BRIC countries: value of soft drinks consumption by gender (% value), 2004
    • Figure 18: BRIC countries: value of Impulse consumption by age group (% value), 2004
    • Figure 19: BRIC countries: value of Impulse consumption by gender (% value), 2004
    • Figure 20: BRIC countries: value of prepared meal consumption by age group (% value), 2004
    • Figure 21: BRIC countries: value of prepared meal consumption by gender (% value), 2004
    • Figure 22: The affluence and needs of the middle class inevitably evolves
    • Figure 23: Unilever' s healthy ice cream, Kibon Ades, has been launched in Brazil
    • Figure 24: Nestle' s Maggi Na Zdorovye! Salad Seasoning was recently introduced in Russia
    • Figure 25: Nestle Rice with Lotus Seed is a new type of nutritious baby food in China
    • Figure 26: Instill these product attributes in offerings to capitalize on consumers' convenience related needs and behaviors

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