Consumers are more connected than ever, and it seems like new technology is emerging almost daily. Over the past decade, innovations have changed consumers’ behaviors and, consequently, retailers’ responses to their needs. Dr. Venkatesh Bala, chief economist for The Cambridge Group, a part of Nielsen, recently discussed the effect these new technologies could have on global consumers and commerce at The Next Billion: A Forum about the Connected World presented by Quartz.
“A few years ago, I was looking at a curve where I was plotting what countries have in terms of per-capita income and their mobile and internet penetration rates,” said Dr. Bala. “From 2003 to 2006 to 2009, you could see these giant jumps that were taking place in all of the emerging markets.” And demand for new technology is still growing. Globally, intentions to buy new technology products (29%) in the third quarter of 2013 increased 4 percentage points compared to the second quarter, according to Nielsen’s Q3 2013 Global Consumer Confidence report.
At the same time, the middle class is rapidly expanding and creating opportunities for retail growth. Over the next 20 years, 3 billion people are on track to join the middle class in these growth markets, placing 5 billion of the world’s 8 billion people into this group.
Still, the global economy suffered during the recent recession, and some have been disappointed by what they see as the unfulfilled promise of emerging markets, including Brazil, Russia, India, China and South Africa (also known as BRICS). Nevertheless, Dr. Bala is extremely optimistic for such markets’ short- and long-term expansion.
These countries are growing from the ground up. Consumers are changing their shopping and digital habits to enhance their lifestyles and connect with people in ways previously not available to them, instead of by a need to shop more. And the developing middle class should further drive these markets’ economic advances.