Ogilvy & Mather has launched a new report that identifies 12 “velocity” markets that will be key to middle-class consumer growth over the next decade.
With the “BRIC” index of markets having outlived its usefulness, Ogilvy’s new ranking provides a fresh perspective on the future of global growth, and challenges some of the outdated notions about “emerging markets”.
Ogilvy’s V12 ranking goes beyond traditional economist and banking indices and is based upon measures of middle-class growth in terms of income, rather than assets, using a Purchasing Power Parity (PPP) methodology – a measurement widely accepted by the IMF, the UN and the World Bank to equalize the purchasing power of different currencies. Critically, it also assessed markets based upon the velocity of growth and change – an increasingly important factor that some companies have grossly underestimated so far in their global growth plans.
The 12 velocity markets identified herald a shift to South Asia as the epicenter of future middle-class growth. Centered principally in India, but inclusive of Pakistan, Bangladesh, Myanmar, Indonesia, and the Philippines – and extending up to China, and to Egypt, Nigeria, Mexico, and Brazil in the other direction, the Velocity 12 markets represent a vast arc of future growth. Over the next decade, these 12 markets will be the source of the next billion middle-class consumers, which will create a critical tipping point as the middle-class move from a minority to the majority of the local population in many of these markets.
Miles Young, Ogilvy & Mather Worldwide Chairman: The Velocity 12 research shows the world as it will be in the not too distant future. A billion new middle class members will literally change its shape. It will become, for instance, much more orientated to South Asia, especially India. Most Western businesses simply are not used to thinking this way. This means finding a new lexicon of growth, as the phrase ‘emerging market’ doesn’t now describe the new realities. ‘Velocity’ better describes the real transformation in these markets.
The Report features the results of a first-of-its-kind middle-class attitude survey conducted across all of the 12 markets amongst 3,600 consumers. It also addresses a range of V12 social, cultural, technological and lifestyle trends that companies need to know, both to size the prize for their brands and to figure out how to capture it. This includes identifying the key role that women will play as social change agents and entrepreneurs, with purchasing power crossing cultural, religious and demographic divides. Understanding the progressive Muslim consumer – the Muslim Futurists – as a key consumer segment will be crucial to succeed in the V12. Seeing cities, more than countries, as the unit of invention, entrepreneurship and investment will also alter trade and investment patterns in these markets.
All of this will place new demands on companies to master greater diversity and to navigate new or less familiar markets. V12 provides forward-looking Velocity Marketing Principles, to address the transformation of brands in a reshaping world.