The economic growth of emerging markets has created a dramatic change in the social hierarchy of these nations.
In most of the emerging world the buying power of the middle class has increased so quickly that people can see a direct comparison with their parents and grandparents. So they are very aware of their success. And they want to express it, both to themselves and to others.
One of the obvious ways people can demonstrate success is through their purchase decisions – the categories and brands they choose are conscious choices.
In Aravind Adiga’s novel “The White Tiger,” the son of a rickshaw puller in India blackmails and murders his way to being a wealthy entrepreneur. In a revelatory moment, he realizes that his assumptions about clothing and its symbolism are all wrong.
Up to this point, his view was that if you could afford a pattern on your t-shirt you went for the jazziest, most colourful one possible. Then he notices his boss wearing a white t-shirt with a single logo.
When he has to escape after (spoiler alert) murdering this same boss, he disguises himself by wearing a simple t-shirt so the police assume he can’t be a humble driver.
Later, when he is successful, he makes sure he is seen eating pizza even though it makes him sick; pizza is what a successful Indian businessman would eat.
Externalizing success in China
Of course, there are also many real-world examples of this “expression through consumption.” In China, the products and brands that are most successful are very much external ones.
Chinese workers may have small and basic apartments, but they accumulate brands they can flaunt outside the home such as handbags, scarves or fancy cars.
According to a recent Economist article, some Chinese professionals who work for prestigious companies keep their employee badge on as often as possible. And when it comes to travel, visiting a trendy destination is more important to them than where they stay when they get there.
Education as status
In many countries, a foreign education is a key status symbol. I remember interviewing a cargo manager of a major freight forwarder in Dubai a few years ago and noticing how clearly he signalled the fact that he was completing an MBA.
His study books were prominently displayed in his offices, the walls contained certificates for the course modules he had passed so far and he included the degree on his business card.
In travel, we have seen both a growth in outbound travel and a pride in domestic destinations. More and more Indians are visiting Goa, for example. But I think it’s fair to say that brands in almost any industry have the opportunity to signal status in a market like India, where even the milk or yogurt you buy says something about you!
Travel and status
Travel is what economists call a higher good. The wealthier and more confident we feel, the more we want to travel and the more unusual the destinations we wish to visit.
In fact, travel can often be the first big ticket item that newly successful members of the middle class acquire. In markets like Malaysia, where foreign cars attract very high sales taxes, that trip to the U.S. to visit your cousin is a much more affordable way to express success than trying to get a loan for a Mercedes.
On the other hand, many of the measures of status for emerging market travellers are tangible things (a philosophy we summed up in an earlier column as “sleep cheap, shop expensive”). So travel brands may have to tweak their product a little to include stuff that can be shown off to others.
Well-designed products are a key status symbol in many Asian countries. Owned by low-cost airline Air Asia, The Tune hotel chain charges a low rate for a room but makes you pay for things like air conditioning, TV and towels.
But Tune differs from the North American and European budget hotel chains in some very important ways. First, it focuses on great locations; its UK hotel is just up the road from Buckingham Palace.
Second, Tune hotels don’t skimp on design. The rooms may be small, but they will look great in a photograph!
In the same vein, airlines catering to emerging market consumers may want to offer economy clients an add-on chauffeur service that sees them picked up from the office in style. Even some of the smallest details such as luggage tags can be powerful symbols of success.
Outside of travel, watchmaker Hublot uses Argentinian polo players as a benchmark of excellence and status, while Itau, a South American bank, uses spokespeople who have been successful on the world stage (such as Brazilian actress Alice Braga).
In short, if you want to show middle class consumers in emerging markets that you understand their needs, give them something to show for it.