global.trends
TRANSCRIPT
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global.trends About TRENDBÜRO As Germany’s first trend research agency our mission is to iden;fy emerging trends, deliver strategic consul;ng services and to develop relevant business solu;ons. This report features societal, consumer and industry trends, freshly delivered from our global network.
Contact m.schueling @trendbuero.com
Issue #2
China About Avantgarde China
Trend 1 – The Mobile Revolu;on Trend 2 – Luxury on the Rise
India
About Trendbüro India Trend 1 -‐ The Rise of Urban Villages
Trend 2 – Design: Made in India
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global.trends China at a glimpse
A fast-‐growing economy. China has emerged as the world’s fastest-‐growing major economy with an average
growth rate of 10 % over that past decade. As of 2012 China has become the world’s 2nd largest economy and it is predicted China could overtake America’s GDP by 2022.
An emerging middle-‐class.
The emergence of an affluent midde-‐class has seen a rise in domes;c consump;on, a booming luxury market and emerging trends such as e-‐commerce and social media. It
indeed seems that all eyes are on China.
Picture: Beau,
fulplacestovisit.com
About Avantgarde China Avantgarde is a global communica;ons agency with a focus on experien;al marke;ng. Avantgarde China currently holds offices in Shanghai and Beijing.
Contact Shanghai patrick.pesch @avantgarde.cn Contact Beijing jonathan.turner @avantgarde.cn
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Trend 1 The Mobile RevoluJon
China is likely to surpass 1 billion mobile-‐phone subscrip;ons this month, double the combined number of people in the United States and Japan. Together with India, China will account for more than a quarter of the worlds total mobile phone popula;on. This figure at present represents 74 % of China’s popula;on of which 14 % have access to 3G. The number of users has increased by 900 million in li_le more than two years and the worlds largest telecommunica;ons market is currently growing at around 8-‐9 %. The expected growth can be a_ributed to the emergence of an affluent middle-‐class, a gradual rise in wealth amongst the general popula;on and the increasing use of smart phones to par;cipate in online ac;vi;es such as social media and online shopping. Taobao, China’s top e-‐commerce site, has recently reported that it expects explosive growth in mobile shopping over the next two years as increasing numbers are using smart phones and tablets for online shopping. The leading online shopping site within China has more than 400 million users, and claims more and more products are bought via the company’s apps and mobile internet sites. Sources: Forbes, The Wall Street Journal, PC World
Facts China has the world's largest mobile phone market, with a popula;on of around 1.3 billion, and an es;mated 988 million mobile phone subscribers. Source: CBS News, 04/2012 In February 2012, China surpassed the United States in monthly new iOS and Android device ac;va;ons for the first ;me in history. China is now the world’s fastest growing smart device market. Source: Flurry Analy,cs 12/2011
Business Opportunity (1) Smart phones China has 122 million consumers who do not yet use an iPhone or Android device but could afford one, represen;ng a significant untapped poten;al. (2) E-‐commerce and social media Direct beneficiaries of the rise in smart phone usage will be sites such as Taobao and Renren (China’s Facebook equivalent).
Facts
With its large popula;on and rapidly emerging middle class, China has risen from 11th in January 2011 to the world’s 2nd largest app economy. Source: Flurry Analy,cs 12/2011
Picture: Ralph Winn
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Trend 2 Luxury on the Rise
Alongside China’s growing economy and increasing income levels, the country has been witness to the emergence of a rising affluent middle-‐class which has triggered the growth of a flourishing luxury market. In 2012, China will surpass Japan to become the world’s largest market for luxury products with sales es;mated to jump 36 % year-‐on-‐year reaching $14.6 billion in 2012. At the same ;me consumer behaviors are changing, with China’s luxury buyers basing their purchase decisions upon an increasingly wide range of factors. Emo;ve considera;ons such as experience and self-‐reward have now emerged alongside other key-‐drivers such as func;onal factors and status-‐pursuit. Many interna;onal brands already have a well-‐established retail plalorm and a_en;on is now shiming towards brand building and a_rac;ng new consumers entering the luxury market. E-‐commerce and social media will play an increasing role in this context. Sources: KPMG, China Daily, Maosuit, Business in China
Facts There are now more than 875.000 people with wealth of over RMB 10 million and 60.000 people with wealth exceeding RMB 100 million. Source: Hurun Report, 2010
Business Opportunity Due to its sheer size and diversity, China shouldn’t be viewed simply as one market but as a collec;on of smaller markets with differing degrees of maturity. In 2012, investors can expect to see a greater level of customiza;on towards individual markets within China based on consumer sophis;ca;on and geography. Experien;al luxury is expected to be of increasing importance to affluent Chinese. Online business in China will also con;nue to expand in 2012, although more enterprises will seek coopera;on between their on-‐ and offline business. Source: KPMG
Example As a leading global brand in both the jewelry and watch segments, Car;er has established its retail presence in China in recent years and today operates 37 bou;ques in 22 ci;es across the country. Source: KPMG
Picture: Kevin Lee
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global.trends India on a glimpse.
A stable economy. Over the last decade, the Indian economy has shown high and stable growth rates. In the financial year 2010-‐2011, the growth rate was above 8 % and even during the financial crisis in 2008, the economy grew by 5-‐6 %. India’s consuming class has been
a major key driver.
A young populaJon. Currently, India is one of the most populous countries in the world. With a predicted
popula;on of 1.5 billion in 2025, India will overtake China as the world’s most populous country. Addi;onally, 45% of India's popula;on is under the age of 20 which is equal to 550 million Indians. This development reveals a young, digital and largely
untapped consumer poten;al.
A trend-‐sePng naJon. The dynamic and the surge of the rising middle class is apparent across various
markets. From the increasing demand of electronic goods to the latest in luxury cars, the country progressively follows global trends, whilst sepng its own at the same
;me.
Picture: Isab
elle-‐Ja
smin Roth
About Avantgarde India In 2012, Avantgarde India will start its opera;ons in New Delhi.
Contact [email protected]
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Trend 1 The Rise of Urban Villages
Hauz Khas Village (HKV) is Delhi’s new bohemian quarter. Built in the 14th century, the li_le village was “swallowed” by the southern expansion of Delhi in the 1970’s. Today, it has become a place where Indian tradi;on and culture meets interna;onal crea;vity and modernism. In the last two years, HKV has seen its second growth explosion. It is now home to an astounding number of clubs, bars, designer shops and galleries, all situated in a ;ny total area of approx. 5,5 km2. It is truly an urban microcosm, full of innova;ve ideas and experiments! Hence, the business environment is very compe;;ve and what doesn’t work has to make way for others soon. Shops open and shut down within a ma_er of weeks. The powerful use of “juggad”, India’s improvisa;onal style of innova;on, shows its best and most wonderful side in the village. With this boom, the rich and powerful have started to invest in real estate and landowners are making the most of this “binge money”. The infrastructure is outdated and inadequate, but HKV looks firmly set on the path to becoming a full-‐scale commercial hub. Text: Isabelle-‐Jasmin Roth & Valay Singh
Fact There are currently 13 art galleries, 70 fashion stores, 14 home deco stores, 5 kiosk booths, 15 street shops and a total of 31 restaurants, cafes and bars in HKV. Source: Trendbuero India, Trend Safari, April 2012 Source: Valay Singh Fact Prices for commercial spaces have increased heavily, e.g. the rent for a certain shop was EUR 1.700 three years ago, it is now rented out for EUR 8.100. For residen;al space, the increase is around 50 % in the same ;me period. Source: Expert interview, Trendbuero India Fact Sensing HKV’s poten;al, Bollywood star Kamia Malhotra opened her restaurant “Kafe D’or” in Ocober 2011. Also Indian Na;onal Team cricket player Ashish Nehra launched his restaurant “De Villa” in March 2012. Source: Trendbuero India, Trend Safari, April 2012
Business OpportuniJes (1) Bars, hotels and restaurants: The food and beverage industry has prospered enormously in the village, and is known as Delhi’s new and upcoming food hub. Within the next months, around 30 new restaurants, bars and hotels will open in HKV*. (2) Street and small scale arts: The labyrinthine alleys of this medieval village provide a plalorm for small-‐scale performing arts, fashion stores and art galleries . Mapo and Mapa, two Italian ar;sts, are presently working on a wall pain;ng project in HKV. They have been engaged by a new café that’s opening soon. (3) Shahpur Jat: Due to the village’s small size, space is limited and therefore prices, commercial and residen;al, are increasing rapidly. The popularity of the village allows property owners to move out of their houses and break them down to build small, rentable flats, mostly given to expats. Hence, Shahpur Jat, five minutes away from the village, is considered to be the upcoming “it-‐area”.
*Source: Interview, Trendbuero India
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Trend 2 Design: Made in India
India, a country of innumerable classic crams and tradi;onal arlorms, has seen the consump;on of branded products and services grow exponen;ally since the countries liberaliza;on in 1991. Along with the “Hindu rate of growth”, mass markets opened and therefore India’s posi;on in a globalized world has changed dras;cally, from a country full of poverty to one of the world’s future super powers*. This also is reflected in the ques;on, what the future of Indian design will be – for the world but also for India itself. This upcoming demand for new and “glocal” design solu;ons arises from the immense unbridled exposure to western culture and aesthe;cs through television and internet which mixes the acquired quali;es with local requirements. In addi;on, the growing economy, new interna;onal and local brands and countless local entrepreneurial ventures have made good communica;on, mostly in English, impera;ve. Thus, we can only see this number growing. With its vast history and cultural diversity, India has the right ingredients to nurture a massive crea;ve force that can and will be driving innova;ons in design thinking, even globally. * This does not mean, that the problem of poverty is solved yet. Text: Isabelle-‐Jasmin Roth & Dwarka Nath Sinha
Fact The India Design Forum was held for the first ;me in March 2012 in New Delhi. A_ended by around 700 delegates with 50 speakers from across the globe and represen;ng different streams of design, the conference focused on the key ques;on “What is the future of design and what role will India play in it?“
Source: Tiffinbox/ Dwarka Nath Sinha Facts There are 17 print magazines focusing on Indian design alone, along with a growing number of online magazines and blogs. Source: Trendbuero Trend-‐Safari, April 2012 Currently, there are 17 communica,on design ins,tutes in India, in addi,on to the 23 fashion and tex,le design ins,tutes – numbers are expected to climb up. Source: designinindia.net, April 2012
Business OpportuniJes (1) From India to the world: With several Indian corporates going global and rebranding themselves, the Indian design industry has immense scope for growth. (2) “Social design”: The rise of social entrepreneurs and NGO’s in India leads to the need of a visual iden;ty and informa;on architecture that works for e.g. interna;onal dona;on agencies but also for local grassroots popula;on. This leads to a remarkable challenge – but as we know, each challenge offers a great opportunity. (3) AdapJve design trends from India: India has always been very strong in system design, e.g. in the fields of IT or informal value chains (the Mumbai Dabba Wallahs are an excellent example). Hence, this strength will influence the current design discussion in a way, which only India can offer!