Businesses around the world are now looking at the “Next 4 Billion” nations for growth, owing to the global economic slowdown. The nations included in this category are India, China, Indonesia and parts of Africa and Latin America, according to a PricewaterhouseCoopers (PWC) India report.
The report, titled “Profitable growth strategies for the Global Emerging Middle – Learning from the ‘Next 4 Billion' markets”, indicates that the next wave of business opportunity will come from the Global Emerging Middle' (GEM) segment.
The GEM segment in these nations, which lies just below the middle segment, constitutes a significant, expanding and largely untapped market, said the report.
The above mentioned nations have an average per capita income of between $1,000 and $4,000 a year. They are home to 4 billion people, or more than half of the world's total population of 7 billion.
“The GEM will represent a combined annual market in excess of $6 trillion by 2021. In India alone, the segment is expected to cross the $1 trillion threshold by 2021 as its ranks swell to 570 million, from 470 million in 2010,” said the report.
Three points
The report has outlined three main points that companies should keep in mind to succeed in the GEM segment. They should have a new value proposition which understands the aspirations and unique trade-offs of the segment. Companies should also develop an innovative business model which they can use to address this segment profitably. Another factor that companies need to adjust to is the shift in mindset.
This requires both internal as well as an external shift. Companies would need to have a strong leadership presence, a bold approach that embraces disruptive solutions, and a willingness to adopt new values and metrics to drive and measure success.
“Innovations developed in ‘Next 4 Billion' countries can be exported to mature economies to spur growth and increase efficiencies,” said Mr Shashank Tripathi, Executive Director and Leader – Strategy and Research, PwC India
For the report, PwC conducted in-depth interviews with more than 30 CEOs and leaders of major corporations as well as grass-roots organisations and innovation experts.
They also conducted a structured consumer study with individuals and families from the emerging middle class to develop an understanding of their needs and demands.
Keywords: Businesses, Next 4 Billion, nations, economic slowdown, PWCreport
