Companies looking to target emerging markets could benefit from focusing both on obvious locations like China and India and somewhat neglected areas such as Colombia and Vietnam.

Financial services provider BBVA identified ten nations it believes will do more to aid the worldwide expansion in GDP than a majority of their advanced counterparts over the coming decade.

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Companies hoping to enhance their position in China should target a select group of up-and-coming cities, a report from The Economist Intelligence Unit (EIU) has argued.

Following recent estimations, the Chinese urban population could reach 880m people by 2037. The pace of urbanisation in China will have a fundamental effect on all businesses. China is still a developing market. Urbanisation does more than just drive growth; it also makes it more stable. Guangzhou, Wenzhou, Shanghai and Suzhou currently constitute the primary consumer markets, but other cities are quickly gaining ground. To identify the new generation of leading municipalities, the EIU analysed 86 prefectures boasting at least 1million inhabitants, choosing 20 it believed might form a base for expansion. These outlets – collectively termed CHAMPS – were spread throughout the country, and included Baotou, Shenyang, Wuhu, Hohhot, Xiamen, Wuhan, Nanchang and Xuzhou. During the next decade, these urban centres will grow by 27% to 85m people, in which time the 20 wealthiest cities should swell by 19% and hit 100 million.

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According to a Survey made by Nielsen (*) , consumers in China are now among the “most complex” in the world as a result of their rapidly-changing habits and preferences, a study has argued.

Historically, Chinese consumers visited stores around five times more often each week than their US counterparts, with the average basket size only a quarter of that in America.

In 2010, frequency rates have fallen, shown by a slight drop from 0.6 trips to 0.5 trips in the home and personal care sector per seven days, while the normal value of purchases has grown from 18.42 yuan ($2.76; €1.98) to 24.10 yuan.

“The trend toward fewer but more costly shopping trips reflects the Chinese consumer’s convergence with developed-world norms,” McKinsey said.

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Competition is rising strongly in China and companies wanting to play a big role in the country should adapt their strategies.

According to a report by AT Kearney, the “primary purpose” for investing in the country should change from « making goods for export » to « boosting domestic sales ».

The automotive sector is a good example of this transition as China has overtaken the US to become the world’s premier car market. Brands such as BMW, Mercedes and Audi have exploited this opportunity by launching many new models through local joint ventures. General Motors has recently upgraded its research centre in Shanghai as it seeks to build bespoke vehicles for Chinese drivers. [Read more →]