In March this year, I had a chance to have lunch with Sanjay Behl (at the conference on India and its neighbors at the Harvard Business School), the head of marketing at Nokia India. It was quite exciting to hear about the rapid growth of mobile phones in a poor country like India and how Nokia has been creative in customize its offering to the local situation. In other words, Nokia is an excellent case study for all those companies that have huge businesses in the developed world but are struggling to grow because of the mature nature of the market.
Countries in Latin America, South East Asia, Africa, the Middle East, and Central and Eastern Europe are among the fastest growing new markets for mobile services, according to new consumer research by Nokia. The study found that brand, handset quality, and network service quality are strong market drivers in New Growth Markets that sometimes outweigh the cost factors that industry watchers typically expect.
I have even come across studies that camera phones are really popular in these markets compared to the United States, for example, where vast majority of us are happy with a handset that can simply let us make phone calls. The study also revealed another interesting statistic - the value of a brand. We have become so obsessed with lower price that brand for us is rarely an issue. With commoditization being the trend all the way from grocery items to electronics, we do not value brands as much. In these markets, on the other hand, handset brand is the main factor in phone choice among respondents. On average, 46 percent expressed this opinion unprompted; among the 16-24 age group it is even higher at 52 percent. In India it is 64 percent.
What does it mean for you?
- While the developed world may continue to provide you with the bulk of your sales and profits, the growth is simply not there. So look for markets that are growing and try to ride the wave.
- A lot of growth is happening in countries where English is not spoken (India is the only exception). That should not scare you. While English usage will grow as the world shrinks, as local economies become stronger, people will see lesser need to learn English (similar to the cases of countries like Japan, South Korea, France, etc.). Like Nokia, develop a local team of smart executives like Sanjay Behl that can drive growth because they understand the local market better than anyone who is not there.
- Stay on top of trends and drivers through research. Useful information on growth opportunities can often come from unexpected resources. For instance, this article while talking about the cell phone market growth, also indirectly points to growth opportunities for batteries, cell phone accessories, prepaid cards, retail outlets, etc.
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