The Emerging Market You're Probably Ignoring
Looking for an emerging market? Looking for a youthful market? Try the Arab world: More than half its population is under 25 years old.
Compare that to the U.S., where only 34% is less than 25.
Here's another in my series in which I pick a topic and connect with someone a lot smarter than me. (There's a list of previous installments at the end of the article.)
This time I talked to Vijay Mahajan, a business professor at the University of Texas and the author of The Arab World Unbound (as well as the 86% Solution, named the 2007 book of the year by the American Marketing Association).
The demographic data--and the opportunity it creates--is really surprising, at least to me.
The Indian market comes close, at 48%. But compared to India, the Arab world has a higher percentage of its current population under 25 and a higher fertility rate to regenerate its youth.
And the Arab youth like global brands. Surveys show brands like Nokia, Toyota, Sony, Pepsi, Head & Shoulders, Rolex, Nike, Dove... all have brand favorability scores over 60%. Arab youth crave the best brands, wherever they come from.
It shows my ignorance of the region and its people--embarrassingly so--but I was also surprised by your data and insights into Arab women.
In general Arab women are sophisticated, highly educated, and at the same time very family-oriented. While I'm exaggerating slightly, think of the mother's position in the family as just next to divine. Men won't do anything without consulting their mothers and grandmothers.
So product marketing has to start with the notion that it must appeal to women, because women are key decision-makers within the family.
Sounds no different than what happens in my house.
Also keep in mind it is very important for women to show that they take care of their families... and by extension, they take care of themselves. Fashion is a very big thing, not only the clothes women wear inside but also the clothes they wear in public. While Arab women tend to be modest, their clothes are still a symbol of who they are as individuals.
Children are obviously very important as well. Mothers want to do a good job raising their children, providing for them, educating and enriching their lives.
Arab mothers are like mothers everywhere. They want the best for themselves and their families and they buy things just like mothers all around the world.
And they're very, very smart.
So where are the opportunities?
Take hospitality: Approximately 70 million people travel to Arab countries every year. Because of the nature of the region there are three types of tourists: business, pleasure, and visitors to holy places. More than 60% of the world is religiously connected to the region.
Christians go to the West Bank, Muslims to holy places in Saudi Arabia, others go to the Dead Sea or Mount Horeb, the "Moses Mountain." When 60% of the world is connected, there's naturally a huge market: travel, hospitality, food, services, etc.
I have to admit the idea of taking advantage of those opportunities sounds daunting, though.
First keep in mind there are huge ex-pat populations in most countries. And some Silicon Valley entrepreneurs have started incubators and business plan competitions.
But you won't find opportunities by being safe. You'll need to go, explore, and get a feel.
Also keep in mind an excellent business infrastructure is already place. Broadband penetration is higher than in India or China. And almost 10% of North Africans live in Europe and transfer money back home.
The Arab world has a globally connected population, an incredibly vibrant business community, and millions of young people eager to start businesses and raise families and join the global marketplace--and consume products from all over the world.
The opportunity is there--as long as you're willing to understand and embrace cultural differences so you can truly be a part of an emerging market.
Quick note: I'm American and I see through American eyes. That means I hold a number of false assumptions and I miss a lot of stuff. Even if you don't plan to expand overseas, read a book like The Arab World Unbound.
If you're like me, it's a great way to start understanding just how much you don't know.
Check out other articles in this series:
- Activision CEO Eric Hirshberg on what groundbreaking advertisers know
- The ins and outs of franchising with Noodles CEO Kevin Reddy
- How Ashley Madison's founder built a business everyone loves to hate
- Julia Allison on building a great personal brand
- Eric Ripert on how to build a classic brand
- Shake Shack's CEO on how not to sell out