2025 is six short years away. The world will add another billion citizens, with over 80 % of them born in Asia and Africa. Consumer marketers will likely focus on the “Next billion” consumers, a group of one billion middle class citizens living in developing nations. Everywhere people will eat healthier and live better with more access to the brands we produce. Technology will revolutionize our business, with tools that are waiting to be invented tomorrow. It is easy to foresee a future which includes more online purchases, home delivery, product info sharing, and brand personalization. As the countdown to 2025 begins, now is a good time to evaluate our strategies and brainstorm about the road ahead.
Asia will contain almost 2/3 of the world’s population and “mouths”.
Global GDP will shift, with Asia’s share surging towards 40 % equivalent to the USA and Western Europe combined. A key industry challenge will be the number of marketers willing to invest to build new eating habits with Asian consumers. Currently, there are success stories with Coca Cola and Starbucks leading the way in the beverage category. There is also strong acceptance of European and USA confectionery and snack products. Other categories are undeveloped, with companies choosing a path of opportunistic exports versus required investments in market research, adapted products, and local factories. Asia will evolve from just another export region to the key to future growth and profits.
India & China: Dynamic Duo ?
Tough to under estimate the 2025 importance of two countries that may total almost 3 billion people. It’s doubtful that India will leapfrog China as an economic power. However their population gap will narrow significantly, with the stage set for India to emerge as the world’s most populous country by 2035. China will be viewed as an established market, with more national brands, retailers, and commercial structure. India is the world’s great enigma. Will it finally break free from its protectionist handcuffs and emerge as the ultimate growth market ? Or remain glued to its current path of country development in their own independent manner ?
A broader question could relate to a China – India alliance that could shift dominance of global economic policy from the West to the East.
Meet the VIP’s
Vietnam, Indonesia, and Philippines represent high growth countries with population exceeding half a billion people by 2025. This decade will likely see these southeast Asian “tigers” graduate from emerging market status to more significant sources of growth. Malaysia also fits in this cluster, with a projected population increase to 42 million. I like Myanmar as a new market.53 million people, low cost of entry, and very early in the development cycle.
Middle East: All about the Oil
2025 population will exceed 500 million in the region, with population growth maintaining its positive upward trajectory. Egypt’s population will approach 100 million and Iran’s may surpass 90 million. Stability in Iraq would result in an important new market with a population increase from 33 million today to 46 million. As always, countries will oil like Saudi Arabia and GCC nations will surpass countries without the mineral resources. A big question, is the evolution of alternate supplies and sources of energy. Current oil pricing levels are creating short term problems. Longer term, higher prices are required to sustain development.
What about Africa ?
Will Africa’s fragmented market of one billion citizens be “too big to ignore” ?
Will the next 10 years represent the era when global marketers finally aim their budgets at the last frontier ? Partially. I think that multinationals and forward thinking Chinese and Brazilian companies have identified Africa as a high priority region. Companies with long term horizons will find rewards in Africa. My guess is that some exporters will discover Africa by 2022, but businesses will still be in their infancy by 2025.
USA: Discover the Americas
The world’s number 2 economy will be a vibrant force in 2025, with population growth of
30 million to 350 million people. The USA Latino population will exceed 70 million people, 20 % of the population. Mexico and Brazil will remain giants, validating the need to commit to serious plans for these countries. Other Latin American countries such as Colombia,Chile,Peru,Ecuador, and Central America are all expected to enjoy positive momentum. These markets are especially attractive for Made in the USA and brands from Spain.
Experts predict that European population will be flat, with ambitious targets stretching to 1 %
growth over the ten year period. Importantly, existing population is aging, with marketers forced to grapple with consequences of dealing with a consumer base at retirement age. European brands are viewed as high quality and desirable by increasingly affluent consumers in developing markets. Successful European companies will be those that can shift balance of their business dependency from the declining “continent” to new Asian markets.
Pakistan,Bangladesh,Nigeria,Congo, and Iran
These countries are not for novice exporters. For most companies, better allocation of resources to accomplish more in China, USA,Mexico, and Brazil is a better decision than rushing to plant small flags in these risky countries. On the other hand, multinationals with deep pockets and long term horizons should consider these markets. Send a company missionary, hire a local team, expect the worst and appear pleasantly surprised when it works out.
21st Century Distributors
Outsourcing will continue as a preferred route to market option for international manufacturer’s. At the end of the day, companies want to own the brand equity and are content to outsource distribution and in some cases production. This allows them to focus on investments in brand building versus infrastructure, particularly in new markets. Successful distributors will emerge as category/sector experts versus generalists involved in many aisles. Distributors must expand their added value services, leveraging their unique ability to serve as custodians of your brand from port of entry to supermarket shelf. Challenge your distributors to refine their models to accommodate exponential growth in the online retail channel. Today’s distributor model may be extinct. However, the 2025 distributor service organization can thrive as an outsourcing solution.
2025 Strategy -Export Solutions
In 2018, I completed projects in 31 countries across five continents. This provides a unique, “close to supermarket shelf” perspective on international development. In addition, each year, we choose to work with 1-2 strong European companies on taking their USA business to the next level. Looking to create your 2025 International development strategy ? Export Solutions can help ! Contact Greg Seminara in Atlanta, Georgia. email@example.com