The Good and Bad of “Emerging Markets” Departments

It wasn’t that long ago that we here at Postconsumers by and large didn’t even know what an emerging market was. Then we read an interesting story (we’ve summarized it below as an example) and were suddenly fascinated by them. Part of us wanted to quit all of our current commitments and try to get a job working for an emerging markets department. You’d get to travel the world and potentially improve the lives of others. The other part of us wanted these huge consumer organizations to just get out of the rest of the world – the part of the world that hasn’t been entirely taken over by addictive consumerism. In the end, we think that like most things emerging markets exist on a fluid and sliding scale of both good and bad. Today, we thought we’d take a closer look at them.

What Is the Definition of Emerging Market?

According to Wikipedia, an emerging financial market is a country that has some characteristics of a developed market but does not meet the standards of a developed market. This includes countries that may be developed markets in the future or were in the past. Essentially, they are places that reside in the middle. And if you are a consumer company, they are extremely tempting. In developed nations, while people have bought into the idea of “more, more, more” there’s also a cap simply to how many people there are and how much they can buy. That’s why companies are always looking to expand their global market presence. And what makes more sense than expanding into an area where there is likely to be increased consumer demand and disposable consumer income in the future as the country or region becomes a developed market?

Perhaps an Example Would Help Explain This!

We’re honestly not sure we would have understood our paragraph above either if we hadn’t already researched the topic! We were reading (for leisure, no less) a book called Handbook of Research in International Marketing when we uncovered this story:

“Hewlett Packard (HP), by developing a solar powered portable charging for its digital cameras and photo printers, has made inroads into the vast Indian rural market. Unlike the customers for HP’s digital cameras and photo printers in the urban markets of India, for its mobile photo studio (a solar powered portable charging system, digital camera and printer), HP has nurtured rural female entrepreneurs as customers. The mobile photo studio allows these entrepreneurs to process and deliver on-the-spot photographs taken for purposes such as government ID cards and at events such as marriages and festivals. Besides innovating in the product space, HP also innovated in respect of the business model employed. While in urban markets cameras and printers are sold outright, the village entrepreneurs lease the equipment and purchase consumables from HP.”

We’re sure that you see the conundrum here, but we’ll unwind it just in case!

Is It Really Helping When It Spreads Addictive Consumerism?

While the example above seems unique, it’s really not. Most of the case studies we’ve read about emerging markets have similar storylines. On the one hand, many times the opportunities afforded by companies going in to explore emerging markets improve the lives of people (and seemingly most often of women). On the other hand, the goal isn’t truly to help people. It’s to create a revenue stream for the company by selling “stuff.” You may note that the “happy ending” of the HP story above is that the rural, poor, female entrepreneurs were leasing equipment. But we did more research and we know that when the HP team went into India, they distributed the solar-charged photo stations for free. It was only after the women saw what a life changer it could be that they were transitioned into leasing the equipment. Now, we know that HP isn’t a nonprofit and we shouldn’t be asking them to give things away for free. On the other hand, isn’t there something about this that feels fundamentally predatory?

We’re also conflicted about the ultimate end game. On the one hand, the example we used seems fairly innocuous. People get photos. People love photos! We love photos! But that’s just one example. There are dozens more, hundreds really, that are about getting developing nations to hop on the consumer bandwagon as an evidence or proof of success. Think of high fashion items that become obsessions in developing nations and you’ll get a sense of what we’re talking about.

So, at the end of the day, it boils down to this: where is the line between improving lives and, ultimately, in the long run decreasing happiness, joy and satisfaction by spreading the disease of addictive consumerism? How can the satisfaction of “enough” (the only way to mitigate the addiction) be built into the process?

We honestly wish that we had the answer to that. But obviously the world is very complicated! We’d love to hear your thoughts on the pros and cons of companies exploring developing markets on any of our social media channels.

Photo Credit: Marco Bellucci via Flickr