Where the growth lies

It’s no secret that most companies are looking to emerging markets for future growth. According to the Economist, Western multinationals expect to find 70% of their future growth there—40% of it in China and India alone. But there’s no longer a simple entity called ’emerging market’. Markets are changing and a key to growth is learning how to create opportunity from those changes.

In trying to transplant their domestic business models, companies end up slashing margins or confining themselves to the higher-income segments, which aren’t big enough to generate sufficient returns.

One often overlooked opportunity is targeting a certain group in the huge middle market of consumers. These consumers are stuck in the limbo that our colleague Clayton Christensen calls “nonconsumption”; many of their basic needs are being met very poorly by existing low-end solutions and they cannot afford even the cheapest of the high-end alternatives.

The story of a little red refrigerator called ChotuKool shows the powerful opportunities for companies when they target this frustrated segment of the middle market. Chotukool was developed by Indian multinational Godrej & Boyce, with our help at Innosight.

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