I recently participated in a panel discussion hosted by the Economist Corporate Network in Singapore about innovation in Asia.

I started my portion of the discussion by sharing three observations about what I had found unique about innovating in Asia: its unbelievable diversity, both between and within countries (and sometimes even cities); the historical focus of many Asian organizations on replication and cost reduction; and Asia’s inconsistent infrastructure (Singapore is amazing, but don’t try to schedule more than two meetings a day in Mumbai).

But what I really wanted to discuss were the three biggest trends I see affecting innovation in the region.

The race for the middle. As my colleagues noted in a Harvard Business Review article earlier this year, the extremes in most Asian markets are well served. Wealthy consumers can enjoy luxury brands, world-class restaurants, and high-end automobiles. Cost-conscious consumers can access incredibly affordable, often inventive solutions. But the middle class remains overlooked. And that middle class is surging. A recent OECD study projected that spending by Asian middle class consumers will have grown from $4.9 trillion in 2009 to more than $30 trillion in 2020. That latter figure would constitute about 60% of global middle class spending (compared to 20% in 2009).

Some companies are explicitly targeting this growing opportunity. In 2009, Godrej & Boyce launched ChotuKool, a $70 refrigerator targeting the 85% of Indians who found existing models too bulky, expensive, and power hungry. The portable, battery-powered refrigerator has been a huge hit. Godrej now plans to extend the Chotu brand to washing machines and other household appliances.

Read the rest at Scott’s Harvard Business Review blog.

Scott D. Anthony is managing director, Innosight Asia-Pacific.

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