Young people in emerging markets are five times more optimistic about the future than those in developed markets, writes Sarah Quinn, marketing manager, On Device Research.
On Device Research launched our Young People’s Consumer Confidence Index (YPCC) to help businesses in the UK and US understand what young people in emerging markets think about the economy, personal finances, employment prospects and purchase intentions.
Young people’s consumer confidence
The survey, which covers 5,600 16-34 year olds across six countries, reveals stark differences between the nations. Young Chinese consumers have the overall highest confidence levels, indexing at 39, closely followed by Brazil (38), Nigeria (37) India (32). In comparison, Britons index at just 10 and the US at 16.
Young Britons are 15 times less confident than the growth markets (4 v 57) about how the general economic situation will change in the UK over the next year and three times less confident (21 v 64) about their employment prospects over that time.
Compare this to young Brazilians, who are the most confident about both their future economic situation (72) and employment (76).
Their optimism is more than likely being heightened by hosting the world’s two biggest sporting events in the next four years - the World Cup and Olympics which will improve infrastructure, tourism, create jobs and bringing business to Brazil.
Changing expectations amongst 16-34 year olds in own country over the next 12 months
Source: On Device Research, August 2012
Confidence is being driven in growth nations by a very positive outlook towards their economy and future job prospects. There is a serious risk of young people in developing nations becoming the ‘lost generation’ whilst the optimism of young people in growth nations, fosters innovation and a drive to succeed.
So what does this mean for marketers?
Countries with higher confidence levels are where marketers should be focused when it comes to building their brands. The economic slowdown across the developed world has meant there is a fundamental need for brands to target the growth markets in order to survive - not just increase profits.
The research backs this by showing the purchase intent across markets. The growth markets index 32 points higher in believing now is the right time to make big purchases such as electrical goods.
Young Nigerian and Indian consumers have the strongest belief that now is the right time to be buying big items (indexing at 29) followed by Brazil (24) and China (22) - in contrast, young Britons index at -6.
In view of the general economic situation, is now the right time for people to buy big purchases?
Source: On Device Research, August 2012
The increasing wealth, confidence and education levels in growth nations are also creating a rise in demand for energy, technology and consumer products that simply no longer exists in the developed world.
However, for western companies looking to capitalise on these opportunities, they must first understand the different business practices, regulations, infrastructure, cultural differences and population makeup.
For example, growth market populations are much younger - around a quarter of Western Europeans are under 25 compared to over 60% in places such as Nigeria, which is going to have a huge impact on the types of products in demand.
Even within a country there are significant regional differences that must be understood and considered - local insight must form the basis of any market entry strategy.
How can I understand these regional differences and market to growth nations?
The mobile phone has revolutionised the way brands can research the growth markets and how they communicate with them.
Young people in developing markets now have access to relatively cheap mobile devices and to the internet. They have become especially reliant on these devices with 89% saying their mobile is very important to them.
As they are less likely to own an expensive PC/laptop, many use their mobile to pay for goods, receive wages, transfer money and carry out m-commerce activities. This makes it an excellent tool to understand their behaviour and to engage with them.
It also means that brands are now able to reach out to a mass of people they’ve never been able to target before, even those in the most rural areas.
The number of devices in these countries is going to continue to rise along with the use of the mobile internet - over a third of mobile users in China and Brazil access the internet exclusively through their mobile phone.
Therefore brands interested in developing in these markets, should be looking to the mobile device as a way to research, develop and communicate their marketing strategy.
To find out more about the YPPC survey visit the On Device Research website.
Who is On Device Research?
On Device Research is a research company that gathers responses on mobile devices. By conducting research on mobile phones we can reach consumers wherever they are, at any time and in any location.