Daily Dhaka Times: A report titled Bangladesh: The Surging Consumer Market Nobody Saw Coming, released by BCG’s (Boston Consulting Group) Center for Customer Insight was launched today by BCG in collaboration with SD Asia in Bangladesh in an event at Gardenia Grand Hall, Gulshan. BCG is a global management consulting firm and the world’s leading advisor on business strategy.
Bangladesh is emerging as one of the world’s next great growth opportunities for companies with a keen understanding of the nation’s rising consumer class. Bangladesh is adding 2 million middle-income and affluent consumers each year who are highly optimistic about the future, value foreign brands, and are jumping on the digital bandwagon.
The findings on the report are based on research by BCG’s Center for Customer Insight that included a survey of more than 2,000 Bangladeshi consumers and analysis of their consumption patterns.
“Bangladesh is one of the greatest untapped growth markets in Asia, yet has been off the radar of most major consumer-product companies,” said Zarif Munir, a BCG partner and a co-author of the report. “Companies that move now to get into position have an opportunity to build a lasting competitive advantage.”
The report focuses on Bangladesh’s middle and affluent class (MAC), which the firm defines as individuals with annual household income of around $5,000 or more. That means that these consumers earn enough to afford goods that offer convenience and luxury, such as air conditioners, imported shampoos, and cosmetics.
Although only 7 percent of Bangladesh’s population of 160 million currently is classified as middle-income or affluent, their ranks are growing rapidly due to a decade of stable economic growth, a growing working-age population, and strong upward mobility. Bangladesh’s MAC population is projected to triple by 2025, to 34 million.
“These findings indicate that while Bangladesh’s growing consumer class is eager to trade up to higher-end brands goods and services, they are also budget-conscious,” said Olivier Muehlstein, a BCG partner and another co-author. “Companies must create a strong value-for-money proposition to win over Bangladeshi households.”
The BCG research also uncovered several distinct attitudes and cultural traits in Bangladesh that companies must consider if they are to succeed in this market. Bangladeshis focus more on the immediate needs of their large households than do consumers in many other large Asian emerging markets, for example. Households still purchase most of their goods with cash and at traditional mom-and-pop retail outlets, rather than at more modern channels, such as convenience stores and supermarkets.
To win for the long term in the still undeveloped Bangladesh market, the authors recommend that companies factor these consumer attitudes and consumption traits into their product and marketing strategies. Companies should start fighting now to win brand loyalty among consumers by stressing high quality for money.
Companies selling big-ticket products such as cars and major appliances can unlock significant growth opportunities if they can ease consumer anxieties over personal debt, such as by introducing credit at affordable interest rates and educating consumers on how to manage debt. Companies should also develop distribution networks capable of selling products through small local shops. And they should build robust, mobile-centric digital e-commerce platforms.