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Emerging Market Needs for Products

Emerging Market Needs for Products



Are needs of emerging markets truly different from developed markets? This discusses the uniqueness of emerging markets with case studies

Are needs of emerging markets truly different from developed markets? This discusses the uniqueness of emerging markets with case studies



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    Emerging Market Needs for Products Emerging Market Needs for Products Presentation Transcript

    • Business Transformation
      Are needs of emerging markets truly different from developed markets?
      Co-Founder & Managing Principal
      Disclaimer: This presentation is solely for the use of Conference attendees, Zinnov Clients and Zinnov personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the organization without prior written approval from Zinnov
    • 2
      Emerging markets of Brazil, India, China and Russia represent 42% of the world’s population and economies are growing faster
      Real GDP Growth in 2009
      Consumer Expenditure
      (US $ Trillion)
      Debt to GDP Ratio of Economies in 2009
      Disposable income in emerging markets is fast catching up with developed economies and this has resulted in increased consumer spending
      Source: Zinnov analysis of reports from World Development Indicators Database, World Bank, CIA
    • 3
      At one level the needs of both developed market and emerging markets are similar
      Illustrative list, non exhaustive
      Enterprise Needs
      Macro Economic Needs
      • Business Growth
      • Cost Optimization
      • Total Customer Experience
      • Energy security for next 5 decades
      • Basic Infrastructure for Economic Growth
      • Communication Infrastructure for Collaborative growth
      Socio-Economic Needs
      • Clean water, food and shelter
      • Quality & Affordable Healthcare
      • Education & Skill Development
    • 4
      However the way companies need to cater to these needs vary because of some fundamental differences that exist
      • Brazil, China & India have a significant bottom of the pyramid customer base and this segment requires and fundamental re-think of strategy
      • The sheer size of the nations and unique price performance expectations makes scale a key attribute in these markets.
      • Most emerging markets lack basic infrastructure like power, road infrastructure, bandwidth etc
      • The price performance expectation of these markets are dramatically different. For $6 you can buy a coffee in the US or pay for one months education of a child in India
      • Most emerging markets have a high level of regulatory interference. The rules of the game can change over night.
    • 5
      Companies are adopting new strategies to be successful in these markets and reaping the benefits of the success
      Key Imperatives
      These imperatives need to form the basis on certain strategic initiatives that have proved successful in these markets
      Innovation for these markets can lead to disruptions in home markets- GE is doing this in Healthcare
      Localization of Product/ Solution offering is a must- Nokia is a market leader in mobile
      Scale is a key to success in these markets-Telecom in China and India is ideal example
      There is a need to engage the eco-system at a holistic level- Microsoft is doing this
    • 6
      • Po Chi Wu, Co-founding Executive Director, Global Innovation Research
      • Ajit Nazre ,Partner KPCB
      • Amit Zavery, VP of product management, Oracle Server Technologies Division
      • Christian J. van den Branden, Director Strategic Planning, EMC
      • David J. Cope , President & CEO, Purfresh
      • Sajai Krishnan, CEO, ParaScale
    • 7
      These markets are full of indigenous innovators who have successfully addressed these differences through simple yet powerful innovations
    • 8
      SMS ONE-Unique SMS Driven Information Services
      Product Highlights
      Emerging Market Pain Point
      Vision: Local SMS Community newsletter
      • On weekly basis SMSONE gives critical information. E.g., farmers get instant updates about crop pricing or news of a seed or fertilizer delivery a town away
      • Employment opportunity of the local youth who keeps USD 15 of the USD 22 and is paid USD 1 for each story earning USD 66 to 132 per month
      • Revenue is generated from ads and promotions
      • On-time and critical information doesn't reaches the villagers and rural inhabits
      • There’s no Internet access, no TV, no local paper, and frequently no electricity.
      SMSONE , is the local newsletter which makes in-time community information available to the villagers
      • An initiative launched in 2005 to utilize the penetration of mobile phones to use SMS as Micro-media
      • Local youths pay USD 22 to get ‘franchise’ rights to be the local reporter for a village
      • He compiles the basic information of villagers like names, mobile numbers, etc and signs them up as subscribers
      • This is passed on to Ravi Ghate who sends messages to these subscribers about basic community information
      The Innovator
      Ravi Ghate Director
      Product Usage
      Qualification : 12th Pass, IInd year Diploma Failed.
      Innovator of the idea of Local SMS Community Newsletter 
      Similar models are being built in parts of Africa , where mobile ubiquity can play a vital role in developing communication
    • 9
      Godrej –Low cost Refrigerator- USD 69 per refrigerator
      Emerging Market Pain Point
      Product Highlights
      Vision: Low Cost fridge for masses
      • Portable, top-opening unit weighing only 17.2 lbs, has a capacity of 30-40 liters
      • Uses high-end insulation to stay cool for hours without power and consumes half the energy used by regular refrigerators
      • Does not have a compressor, instead running on a cooling chip and a fan similar to those used in computers and can run on a battery
      Chotukoolby Godrej and Boyce, is a portable affordable refrigerator designed to meet the requirements of rural consumers
      • Non-availability of effective refrigeration in rural areas and access to fresh food and essential drugs
      • Entry level refrigerators in India are priced at USD 156, way above the budget of tier II, III and IV customers
      • The needs and requirements of rural consumers was a portable refrigerator
      • To be launched in 2011, touted as world’s cheapest refrigerator at USD 69 by Godrej and Boyce
      • Co-designed with village women to assure its acceptability, and distributed by members of a micro-finance group
      • The number of parts in the Chotukool refrigerator is 20, almost ten times less than other refrigerators which have more than 200 parts
    • 10
      Chamak-Village Laundromat- One Machine for neighborhood
      Product Highlights
      Emerging Market Pain Point
      Vision: Affordable high quality washing, drying, and ironing services
      • Environmentally friendly, front-loading washing machine utilizes about 40% less water than a top-loading machine
      • Unique water handling system which allows us to use the rig without having any water connection
      • Drying facility in-built which gives 100% drying 
      • Non-availability of affordable laundry service for working professionals in urban cities
      • Dependence on expensive laundry services or laundrymen who are notorious for using low-quality detergents and un-clean water
      • Non-existence of ‘launderettes’ or ‘laundromats’ in India
      Laundromat Service by VLS*, under the Chamak brand, offer laundry service from one-machine neighborhood laundry booths
      • Offer to wash, dry and iron clothes at only 40 cents/1 lb
      • Deliver clean ironed clothes with-in 24 hours. Alert the customer through SMS when clothes are ready
      • Chamak booths are innovatively design of be rollaway booth units (small 4ft by 4ft footprint, with self-contained water supply) allowing positioning in high demand locations and flexibility to move
    • 11
      TATA Swach- Water Purifier at USD 17 per device
      Emerging Market Pain Point
      Vision: Low Cost water Purifier
      Product Highlights
      • Complies with US Environmental Protection Agency standards
      • Has resulted in 14 patents being filed by Tata
      • Competitors - HUL's Pureit and Eureka Forbes' Aquasure, cost
      • USD 44
      Tata Swachis a portable, replaceable filter-based water purifier and requires no energy or running water to operate.
      • Availability of clean drinking water for masses
      • Non-availability of resources like uninterrupted electricity and running water hurdle in working of conventional water purifiers
      • In India, water-borne diseases* cause more than 1.5 times the deaths caused by AIDS and double the deaths caused by road accidents
      • Two variants priced at USD 17 and USD 22 launched in December 2009
      • Delivers safe drinking water at market price of Rs. 30, less than a dollar, per month for a family of five
      • Lifespan of 3,000 liters, enough to provide drinking water to a family of five for a year
      • Uses paddy hush ash (India produces 20 million tonnes a year) matrix bound with microscopic silver particles
      Note * Water-borne disease include diarrhea, jaundice, typhoid, cholera, polio, and gastroenteritis.
    • 12
      Aravind Eye Care- 2, 400 Eye surgeries per doctor
      Emerging Market Pain Point
      Vision: Low-cost surgeries for low-income segments
      Aravind Eye Care provides high quality end-to-end eye care services to the low-income segment
      • Low-income segment population in India are not able to afford surgeries and are exposed to needless blindness
      • In India Government alone is not able to sustain the health needs of an ever increasing population
      • Founded in 1976, it conducts two-thirds of its surgeries free of cost, and continues to be a profitable entity
      • Have conducted 2 million surgeries, with 2.7 million patients screened per year for the surgeries in ‘eye camps’
      • Aravind does2,400 surgeries per doctor per year compared to 300 in standard Indian clinics
      • Its success lies in its end-to-end, all-inclusive business model, which operates very like an assembly-line
      Product Highlights
      • Aravind minimizes the demand on its Doctors’ time , who participate only in preliminary
      examination, final diagnosis, and surgery
      • Paraskilled professionals who are trained to do a range of clinical tasks manage the other stages
      The Visionary
      Dr. G. Venkataswamy
    • 13
      Life Spring Hospitals- Child Birth at USD 35
      Vision: Low-cost maternity care
      Emerging Market Pain Point
      Life Spring Hospitals is a chain of less than 20 bed hospitals providing low cost maternity care
      • More than 100,000 women lose their lives because of child birth complications
      • 80% of health care expenses in India is out of pocket ( not insured)
      Product Highlights
      • Maternity care cost are 50% lower of market rates at LifeSpring, which is focused at working poor population in slums
      • Average number of deliveries per month is equivalent to 100-110 in comparison to 15-20 in Private clinics
      • No-Frills Delivery Model. Standardized Procedures, No Canteen, Low attrition, High Volumes
      • LifeSpring charges only USD 35 for a normal delivery compared to a average prevailing market price of USD 120
      • Standard quality protocols have been developed for provision of healthcare services
      Cost of Doctor/Patient
      LifeSpring Asset Utilization is more than 5 times that of comparable private clinics
    • 14
      About Zinnov
      Zinnov helps organizations globalize their business and improve people strategy. 
      Our consulting solutions are based on rigorous research techniques, data analytics and communities
      Zinnov Research: http://www.zinnov.com/white_papers.php
      Zinnov Blog: http://zinnov.com/blog/
      Zinnov Services: http://zinnov.com/services.html
      Zinnov Events: http://www.zinnov.com/zn_events.php
      For additional details on the topic, contact info@zinnov.com
    • Thank You
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