O C TO B Elizabeth R a couple of 012
c o n s u m e r
s a c k a g electronic d
g o u d h
p r a c t my spouse and i c at the
From oxcart to Wal-Mart:
Four secrets to attaining emerging-market customers
Alejandro Diaz, Max Magni, and Felix Poh
To get items to clients in growing markets, global
manufacturers will need strategies for browsing through both the traditional and the contemporary retail scenery.
In growing markets all over the world, multinationals attempting to get their products to consumers are up against a staggering kaleidoscope of strategic and operational issues. At 1 extreme, they need to grapple with traditional retailers: the disorderly array of outlets, kiosks, street vendors, and other small entrepreneurs who seem to offer area customers a little of everything, whether it be groceries or perhaps branded items, such as drinks, small electronic devices, and personal-care products. In the other, multinationals must manage modern retailersвЂ”global giants, which include Carrefour, Petrol station, and Wal-Mart, as well as neighborhood leaders, including CR Vanguard, in Cina, or Reunion PГЈo para AГ§Гєcar, in BrazilвЂ”that are getting to be a powerful force in the rising world's quick-progress cities.
This duality is becoming more pronounced since we last published about attaining consumers in emerging marketplaces, five yrs ago; our emphasis then was largely on the ubiquitous mom-and-pop shop. 1 Today, full landscapes in emerging markets can be broken into three broad categories (see exhibit, which will focuses on food sales):
1See Alejandro Diaz, Jorge A. Lacayo, and Luis Salcedo, " Supplying вЂmom-and-pop' stores
in rising markets, вЂќ mckinseyquarterly. com, March 2007.
вЂўpredominantly traditional markets, such as India, Nigeria, and Indonesia, exactly where small owners account for 98 percent, ninety-seven percent, and 85 percent of the industry, respectively2
вЂўpredominantly modern market segments, such as Chinese suppliers, Mexico, and South Africa, where modern trade already accounts for more than half of sales
вЂўtransitional markets, in which small business owners currently dominate but are getting rapidly elbowed aside by modern suppliers; in Chicken, for example , their very own share of sales offers shot up to 46 percent in 2011, from 26 percent in 2005
As international manufacturers seem beyond countries as their device of Mom-and-pop
strategic planning, they will discover stark different versions within parts, Exhibit
2All market share numbers are the most current available (typically, 2011) estimations from reports
produced by Euromonitor and Globe Retail.
Emerging market segments present a mixture of retailing on the range from
mainly traditional to predominantly modern trade.
Total grocery retail market sales; 2011, %
60 per cent of all grocery sales from traditional
40вЂ“50% of all food sales via
modern outlets2; significant development in
contemporary trade more than past 5 years
1 Involves cooperatives, self-employed grocers, free of charge markets, and food experts. 2Includes hypermarkets, supermarkets, discounters, department stores, and convenience stores.
Predominantly modern day
50% or even more of all grocery store sales via
towns, and local communities. (For more on city-based strategy setting, see " Unlocking possibly emerging-market metropolitan areas, вЂќ on mckinseyquarterly. com. ) In Malad, a western region of Mumbai, the most important stores for food sales happen to be mom-and-pop shops, known as kirana, and the suburb's giant fresh fruit and veggie mandi, or perhaps outdoor industry. But as business-processing centers and new
houses spring up inside the...