In emerging and developing markets, products and services that we consider conveniences often become vital tools for survival. Increasingly, companies are investigating ways of facilitating daily lifestyles for people in these regions, by creating relevant services that matter to those beyond the industrialised world.
Emerging markets are developing economies with strong potential opportunities for the creation of new value and growth. These are those nations that are not yet wholly developed, but whose rapid economic growth is having a global impact, including large parts of Asia, Africa, South America, Eastern Europe and the Middle East. Rising incomes, economic growth and an emerging class of aspiring consumers are rapidly making these areas a target for design and innovation for multinational companies, and influencing marketing and product strategies around the world.
Experientia’s research in emerging markets has highlighted many specific cultural, social and design issues that are vital to consider when entering these markets. The most fundamental of these is the connection between local research and contextually relevant design. Simply adapting techniques and tools that are successful in developed countries is not enough – innovation for emerging markets must be based on the relevant values of the area; all assumptions must be rethought, and local needs, cultures, social and economic preferences and conditions must be thoroughly understood. Rather than expecting prospective consumers to adapt to existing processes and systems, products and services must be adapted or developed from scratch to fit existing social networks and behaviours. Technology relevance and response to local cultures is of remarkable importance. Sometimes, small infrastructure investments are able to create the conditions for sustainable economic growth. An ecosystem of small businesses and services can have a huge impact on improving living conditions in these regions.
An additional challenge in emerging markets is the presence of large numbers of the population who live below the poverty line, at the so-called economic Bottom of the Pyramid (BoP). These are potential consumers, who nevertheless make up a market with vastly different needs, constraints and income limitations. Here, the traditional paradigm of low volume/high margins must be reversed, to allow for a high volume of transactions with people who often live below US$2 a day. However, simply offering low-cost, basic models of products developed for mainstream consumers is not the way to reach this market. Although people at the bottom of the pyramid don’t have much money to spend outside of basic daily needs, function, features and durability are as important as cost in the decision-making process.
Services and products must go beyond simple commercial transactions, and offer solutions that aid sustainable development, by addressing local issues such as healthcare, affordable shelter, clean water, income generation and education. In emerging markets, ethical consumption, minimal footprint, social benefit and thorough local knowledge are the notable features of successful business strategies. However, people in emerging markets aren’t simply passive consumers looking to the outside world to provide solutions to their problems. They are, by necessity, innovators, entrepreneurs and designers, who, in the daily struggle to meet basic needs, develop ingenious usages, practices and systems to find a competitive edge.
One way to make sure the products are contextually relevant is to involve local designers and the target market themselves in the design process. Co-creative processes are increasingly popular – by working with the people in the local community, a shared understanding of needs and context of living can be created, which offers benefits to both parties.
People in emerging countries know their environment, and are much more likely to come up with ad-hoc solutions to the problems they encounter every day. Indeed, some of the more exciting and innovative technology-based services actually stem from bottom-up innovation within emerging markets and ingenious indigenous use of technology. Some major companies are now working with the non-profit sector to support grassroots innovation and initiatives through more adequate technologies. As easy-to-use, more powerful technology becomes more widely diffused, the value of co-creation and grassroots innovation will become increasingly evident.
The future therefore lies in the creation of service ecosystems or contexts in which grassroots service development can take place. With business providing the tools, people in emerging markets will be able to create and design services and products that are uniquely suited to their needs and conditions.