At the World in 2020 event hosted by Ogilvy Consulting in Singapore, Andrew Staples, Global Editorial Director of The Economist Corporate Network, and Lucy McCabe, Managing Partner of Ogilvy Consulting Asia, laid out the mega trends which will influence the way we all do business in 2020, and made some predictions for how the marketing landscape will evolve this year and throughout the next decade.
Populism and the Power of Local
“Populism and nationalism are here to stay,” says Staples, who explains that they have emerged in multiple countries in resistance to globalisation. When China joined the World Trade Organisation in 2001, it was expected to become more democratic; instead, Xi Jinping took a hard Leninist stance, and is now bolstering that position with technology. This kind of “alternative model” is at the heart of some of the tensions across India and South America.
While the rise of populism has had serious consequences, such as the spread of white nationalist propaganda online in the US and the social unrest in the UK both prior to and following the EU Referendum, the idea of national pride isn’t solely tied to isolationist, xenophobic principles. McCabe identifies a deep-seated need for local connection as something which marketers need to be aware of.
“The world seems smaller due to technology, but tensions across the world are driving people to seek comfort in closer communities,” she says. “There’s a surge in positive national pride, which is reflected in consumer choices.” For instance, in 2011, 85% of Chinese consumers stated a preference for international brands, compared to less than 40% today.
McCabe points to the rapid rise of Muslim brands in Southeast Asia which have taken a proactively local approach when taking on big business; they have the advantage of being steeped in the local culture, and are able to respond more quickly to their customer base and consumer trends. Big brands need to take note. “Casting a local celeb in an ad or pasting in a shallow overlay of local culture won’t cut it,” says McCabe, urging marketers to find ways to create real connections with communities, such as the MILO Marathon and sport programmes.
Climate Change and Sustainability
“We’re starting to build in resilience to climate change into our economic models,” says Staples. An inability to deal with this issue will have huge economic ramifications; climate change-related losses are projected to equal 3% of global GDP by 2050. Staples acknowledges that countries in Latin America and Africa won’t necessarily have the resources to account for this, which will have a negative impact on their economic growth. He also points out that the parts of the world most affected by climate change will be energy-hungry, and that need will be met by oil and coal — far from a sustainable solution.
With climate change at the forefront of public consciousness, brands in Asia in particular need to be thinking about their environmentally friendly credentials. After all, Asia-Pacific is the largest producer of plastic waste globally, and as home to several fast-growing ecommerce markets, packaging will become an area of intense consumer scrutiny in this region specifically.
However, according to McCabe, companies need to look beyond climate change as the single key issue to tackle in terms of sustainability, and invest in the UN’s other sustainable development goals; there are just 10 years left to achieve them. “There are sustainable goals which will power growth,” she says, “such as access to affordable healthcare, and gender equality.”
The Growth of New (and Older) Consumer Groups in Asia-Pacific
The Economist Intelligence Unit predicts that economic growth in the ASEAN region will outpace that of India and the UK, driven by rapid urbanisation and widespread adoption of technology. “Look at the rise in disposable income and what that means,” says Staples. “There are whole new swathes of consumers in East Asia who have never bought insurance before, who have never travelled before, who have never spent money on healthcare or education.”
23 million new households are expected to earn up to $35,000 by the year 2030, which will result in the emergence of a new middle class, and a subsequent demand for education. China is currently leading this trend, but Southeast Asia’s other middle classes will follow, says Staples.
While shrinking, ageing populations have been cited as a factor in declining economic growth in countries like Japan, McCabe posits that Asia-Pacific is actually experiencing a different kind of ageing: one which presents a massive opportunity to brands. In Singapore for example, 24% of people will be over the age of 65 by 2030. This group is among the fastest-growing markets in the world; by 2042, there will be more over-65s in Asia than the total populations of the Eurozone and North America combined.
“Arguably, 65 is the new 40,” says McCabe. These consumers have high levels of disposable income, and they are using mobile devices, ride-sharing services, even dating aps: the stereotype of the technophobe senior is no longer relevant. As McCabe puts it: “Ageing today is not what it used to be, and it would be lovely to see more focus on this affluent, growing segment of the market than on millennials in 2020.”
New Approaches to Privacy and Personalisation
McCabe recommends that brands get ready for the impact of a catastrophic privacy event this year, citing the 150+ reported incidents last year which involved the leak of personal payment and health data. Such breaches are inevitably expected to continue in 2020, involving serious losses of financial and medical data which will force customers to re-evaluate how they think about privacy, and who they trust with their information.
“GDPR is a bare minimum,” says McCabe. “Brands should also prepare for the possibility that consumers will be unwilling to share their data at all, which in the age of data-driven marketing, will have an impact on the approach you’re taking.” This will necessarily drive changes in how brands and agencies undertake personalisation at scale (which currently accounts for around 30% of a CMO’s budget).
The next challenge will be figuring out how to use the available non-personal data signals enabled by the predictive powers of machine learning to “super-serve” customers needs and goals in the moment, by near-magically adapting to their contexts and environments. “Those who succeed will be able to maximise intimacy and relevancy without infringing on privacy,” says McCabe, “and will focus on creativity to drive brand differentiation through personalisation.”
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