Emerging Markets
LiAnne Yu — 1 August 2008
The story about China in the Western media is shifting, from celebrated miracle economy to potential global threat. In particular, the Western media is paying more attention to the developing trade relationships between China and Africa and the implications of that on China’s access to resources from regimes that the U.S. does not support. As an example, many, including Steven Spielberg and Archbishop Desmond Tutu, have spoken out about China’s role in escalating the humanitarian crisis in Darfur by its support for Sudan. It sells weapons to Khartoum, while Sudan provides two thirds of its oil reserves to Beijing. Trade between the China and Africa has topped $55 billion in 2006, and China hopes that two-way trade will hit $100 billion by 2020.
The Western media tends to portray this as an “unholy alliance” that is emerging out of nowhere. However, China’s interest in Africa shouldn’t come as a surprise if we pay closer attention to the history of Chinese-African relations.
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Miguel Gomez Winebrenner — 1 April 2008
Historically, every time the U.S. economy has taken a downturn the result has been more detrimental for Latin American economies. In 1987 and other tough years for the U.S. economy, Latin America has experienced even rougher times- struggling exports and stock market disappointments to name a few. However, the slowing period in Q1’s U.S. economy has been unusual in that the dollar’s value has also decreased. For many economic sectors in Latin America this has been very bad- like flower exports in Colombia (their income is in the form of a devalued currency, but they have fixed costs in an increasingly valued currency). But for many sectors in LatAm, the weakened U.S. dollar has brought about opportunities. Similarly, some companies in the U.S. are struggling but others (like Wrigley and IBM) are benefiting.
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Miguel Gomez Winebrenner — 8 January 2008
You've probably heard of the enormous sales growth of the Prius in 2007, which more than a car has become a badge of sophistication. But the environment isn't a fad- there are many documented examples proving that this particular phenomena has transcended “trendiness” and has become not only a lifestyle choice but also an economic imperative.
Most trends, however, do not have that kind of staying effect and fade away quickly, many times representing a loss for companies that innovate only to see their efforts reach minimal depth. Take the beer industry for example- as Mike Beine described in his Brandweek article from December 3 “A-B, Miller and Coors Craft Image of Being the Little Guy”- the beer industry has gone through multiple trends (“like low-carb, ice, red and dry beers”) and more recently craft beers like Fat Tire.
Not that these fades don’t have returns on investment, but the emergence of new economies (multicultural in the U.S. and emerging markets like Brazil, China, India, Russia, etc.) could represent an opportunity to increase the shelf life of new products and services- in any industry- by having business groups like marketing, product development, innovation and marketing collaborate together to keep social and economic pulses on these economies. If, for example, a new packaging or product could have a cross-over effect and go deep into China, then that would certainly make it a more worthwhile investment.
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Cynthia Chan — 2 January 2008
Fielding projects during the holidays is not something we do very frequently but this year, I had the honor to conduct a series of ethnographies in Shanghai and Beijing during the last week of December. Even though Christmas is not an official holiday in China, it has successfully became one of the most celebrated western holidays in China in recent years.
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LiAnne Yu — 25 October 2007
While doing research in rural China, my team heard about a very special place in Henan provice called Nanjie Village. Nanjie Village is one of a handful of truly Communist-run villages left in China. I begged our local Chinese partners to take us there (they gave in but thought I was nuts). What we found was a far cry from the market-driven energy of Shanghai or Beijing.
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LiAnne Yu — 11 October 2007
Shanghai is a dazzling city, no doubt about it. I’ve heard it described as Manhattan on steroids. But when it comes to really understanding the vast majority of China’s emerging economy consumers, I would recommend getting out of the first tier cities like Shanghai and Beijing, and visiting a 2nd, 3rd and even 4th tier city. The “tier system” in China is based on both population and average income. First tier city residents tend to make more money and live lifestyles associated with the rising middle class. But even when we get down to the 4th tier cities, we’re not talking about sleepy little towns with only one mom and pop store. In fact, China has over 160 cities with populations of 1 million or more (compare that with the US, which only has 9). These are vibrant, rapidly developing places that represent China’s future prosperity.
While 3rd and 4th tier cities like Shaoxing (a three hour drive from Shanghai), Luohe (in Henan province), Dujiangyan (in Sichuan province), and Xintai (in Shandong province) may not enjoy much press, it is in these places where we can observe some of the most drastic changes in Chinese lifestyles over the last few decades. Here are a few things I observed during a recent trip to China’s smaller cities:
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Darrel Rhea — 15 September 2007
I have been attending many international conferences this year, and have traveled modestly, but Summer Davos has been a very different experience for me. Most international conferences are actually regional conferences with some representation from a few other counties. This conference is GLOBAL and has caused me to think a little differently about the world and being American.
I have been in workshops or conversations with business or government leaders from around the world. For example, my last workshop included 3 Americans and people from Pakistan, United Emirates, Afghanistan, India, France, Spain, China, Vietnam, Denmark, Russia, Bulgaria, Nigeria, and some others I can’t remember. Everyone here has an amazing story.
This is an interesting combination of United Nations (with heads of state and royalty waking around like the Queen of Jordon), first world establishment titans, (think Global Chairman of Citibank and hundreds like him), and emerging market leaders (mostly CEOs) with businesses with billions in revenue. Quite a powerful audience. With membership requiring in WEF costing tens of thousands of dollars, conference fees of more than ten thousand dollars, and the travel costs to get to Dalian China, everyone here is here for a reason. People are eager to engage, learn, and collaborate...
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Darrel Rhea — 15 September 2007
I have recently returned from China attending the World Economic Forum Inaugural Annual Meeting of the New Champions (Summer Davos). Dalian is just one of many cities in China with 6 MILLION people that few Westerners have heard of. It is incredibly modern, clean, organized, up-scale. People compare it to San Francisco and Seattle. The scale is enormous, it goes on and on for miles in all directions. Most everything looks like it has been built within 15 years, most of it within 5 years.
As one of many presentations by world leaders at the conference the Premier of China, Wen Jiaboa, spoke. The most repeated words in his long talk were 1) harmonious, 2) innovation, 3) reform, and 4) balance. The pragmatism of the Chinese leadership is very clear, and they are very clear about their goals. They are supporting hyper growth of the economy (close to 10%) while trying to prevent over-heating of the market, dealing with social inequities, being accountable for the environment, preventing inflation, opening up to the world, promoting political reform, etc. Balance is the key word...
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LiAnne Yu — 6 September 2007
Here in the West, we often take for granted that computers are primarily personal devices. Even if our computers don’t belong to us but come with the job, there’s a strong sense that “this is my computer” and I can put “my stuff” on it, which nobody else has the right to access without my permission.
In Emerging Markets, however, the expectations around computer usage are drastically different.
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Kathleen Chattin — 6 August 2007
The rural poor in emerging markets may or may not ever be able to buy their own PC…or even want one. But there’s an alternative, already developed by Intel, to provide a shared “Community PC.” . It was designed for a shared usage model, at a village “kiosk”, somewhat similar to the Internet cafés that are already a widespread phenomenon in many emerging markets. So there are technical and financial alternatives to the one-per-person model.
Low-cost PCs are ‘sprouting up’ all over, whether the $199 PC from Lenovo, or Negroponte’s One Laptop Per Child initiative, or Intel’s Classmate PC . There’s lots of goodness, people claim, in making PC’s accessible to everyone. But what’s good for short-term market penetration may bode ill for long-term innovation in the category.
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Darrel Rhea — 8 July 2007
A startlingly different approach to business ethics and management is coming from an emerging market. How might the success of one man and his organization shift the standards of practice for global business?
Recently I attended a breakfast with Mr. R. (Gopal) Gopalakrishnan, Executive Director of Tata Sons, Chairman of Rallis India, and Vice-chairman of Tata Chemicals. While his company might not be a household name here in the US, it probably should be. With revenues of $22 billion, market cap of $60 billion, and 246,000 employees in 54 countries (including $3 billion revenue and 13,000 employees here in the US), Tata clearly deserves some respect.
My respect for Mr. Gopalakrishnan goes far beyond financial metrics. This man from India is a towering leader with clarity of mission and purpose that stands apart from any other CEO I have met or know of – and at the same time he is a humble, accessible, gentle human being who is willing to speak openly of the challenges and weaknesses of his organization. I found that combination of qualities and the unique approach of his many companies simply inspiring.
When have you heard the leader of a $22B global corporation say the following?...
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Cynthia Chan — 6 July 2007
Shanghai is one of the legs of Live Earth concert series today (July.7.07.) The 24-hour Live Earth concert series, promoting global warming awareness, is scheduled to begin in Sydney, Australia on July 7, 2007 and continue across all seven continents with events in Tokyo, Shanghai, Istanbul, Johannesburg, London, Hamburg, and Rio de Janeiro, before concluding in New York.
Unfortunately, I don’t think I can be at the concert in person even though I’m in Shanghai right now. I heard that the tickets are all sold out! However, it’s definitely interesting to see how climate change and global warming issues are playing out in China.
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Cynthia Chan — 20 March 2007
As Denise introduced in her earlier blog , we recently boarded an eye-opening journey to China via online social networks. China kick starts our initiative to further understand youth culture in several emerging markets around the world.
We conducted the first of two rounds of digital ethnographies with several young people in both top and second tier cities in China via QQ, one of the most popular social networking sites in China. We gave each respondent a week-long assignment that included blogging, picture-taking and posting. They were also asked to post links to their favorite websites on their home page, and to invite friends to join the forum.
What we got back were page after page of dynamic real-life stories. We were so excited as we read their blogs and browsed through pictures they took every day during that week. As ethnographers who have conducted many ethnographies in person, we were pleasantly surprised by the energy that came through these web pages. We also had the luxury to interact with our respondents digitally for the entire week!
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Denise Klarquist — 13 March 2007
Three things get us excited at Cheskin: people, culture, and change. Talk about technology innovation or new new types of emerging behavior and we start to drool. Combine that with meaty challenges from clients where we can substantially contribute to their bottom-line success, and it's almost more than we can bear.
On the topic of emerging markets - those developing economies that are becoming more market-oriented and include Latin America, South and Southeast Asia, and China - Wikipedia states, "It appears that emerging markets lie at the intersection of non-traditional user behavior, the rise of new user groups and community adoption of products and services, and innovations in product technologies and platforms." So, it comes as no surprise that we're tantalized by emerging markets.
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