Executive Briefings

A Mix of Modern and Traditional Retail Strategies Required to Sell to Emerging Markets

To get products to customers in emerging markets, global manufacturers need strategies for navigating both the traditional and the modern retail landscapes.

In emerging markets the world over, multinationals struggling to get their products to consumers confront a bewildering kaleidoscope of strategic and operational challenges. At one extreme, they must grapple with traditional retailers: the chaotic array of shops, kiosks, street vendors and other small proprietors who seem to offer neighborhood customers a little of everything, whether it be groceries or branded goods, such as beverages, small electronic devices and personal-care products. At the other, multinationals must deal with modern retailers - global giants, including Carrefour, Tesco and Wal-Mart, as well as local leaders, such as CR Vanguard, in China, or Grupo Pão de Açúcar, in Brazil - that have become a powerful force in the emerging world's fast-growing cities.

Today, retail landscapes in emerging markets can be divided into three broad categories:

• predominantly traditional markets, such as India, Nigeria and Indonesia, where small proprietors account for 98 percent, 97 percent, and 85 percent of the market, respectively

predominantly modern markets, such as China, Mexico and South Africa, where modern trade already accounts for more than half of sales

• transitional markets, where small proprietors currently prevail but are being rapidly elbowed aside by modern retailers; in Turkey, for example, their share of sales has shot up to 46 percent in 2011, from 26 percent in 2005.

Read Full Article


Keywords: international trade, retail supply chain, emerging markets, marketing to emerging markets, selling to emerging markets

In emerging markets the world over, multinationals struggling to get their products to consumers confront a bewildering kaleidoscope of strategic and operational challenges. At one extreme, they must grapple with traditional retailers: the chaotic array of shops, kiosks, street vendors and other small proprietors who seem to offer neighborhood customers a little of everything, whether it be groceries or branded goods, such as beverages, small electronic devices and personal-care products. At the other, multinationals must deal with modern retailers - global giants, including Carrefour, Tesco and Wal-Mart, as well as local leaders, such as CR Vanguard, in China, or Grupo Pão de Açúcar, in Brazil - that have become a powerful force in the emerging world's fast-growing cities.

Today, retail landscapes in emerging markets can be divided into three broad categories:

• predominantly traditional markets, such as India, Nigeria and Indonesia, where small proprietors account for 98 percent, 97 percent, and 85 percent of the market, respectively

predominantly modern markets, such as China, Mexico and South Africa, where modern trade already accounts for more than half of sales

• transitional markets, where small proprietors currently prevail but are being rapidly elbowed aside by modern retailers; in Turkey, for example, their share of sales has shot up to 46 percent in 2011, from 26 percent in 2005.

Read Full Article


Keywords: international trade, retail supply chain, emerging markets, marketing to emerging markets, selling to emerging markets