A new phase for Asia

August 16, 2009

The BBC excitedly reported today that Japan has experienced economic growth for the last quarter. It seems as though much is being bet on Asia lifting us out of a global recession. But an important comment came from the Chinese government which has declared that future growth will have to come from domestic demand and not from exports. This represents a shift and I think may be the beginning of an important new phase. Instead of looking to serve global consumers with global brands that emulate the Sonys and Samsungs of the past, Chinese and Indian companies must look to serving and growing their domestic markets. This will require real innovation. Not just in meeting the price points that the majority of domestic consumers can afford but also to meet the social, cultural and individual aspirations of these newly emerging middle class consumers. They will not be the same as the aspirations of Europeans and Americans.The databases full of marketing analysis collected about Western consumers will be little use in this next phase of global growth. They won't tell us about how people value education over acquisition of material goods. They won't tell us about the relative values of community and individual. They won't tell us about the sacrifices people are willing to make to ensure good health, income stability or adequate infrastructure. It is a long time since Europe and America went through this phase of development. The early 20thC for the US and the late 19thC for Europe. Long before the emergence of marketing and design as tools of consumerism and growth.

What are the implications for the great Asian nations and for the organizations that hope to do business there? How will they build the domestic capacity to serve their own markets instead of relying on the marketing experts and design agencies of the West to translate low cost manufacturing into brands that meet Western tastes? How will the threat of global warming and the rules of global trade effect how they meet this challenge?

One thing I am pretty sure of. The only way to find out is to be there.