The Great Rebalancing: Alive and Kicking.

After reading the article “What Happens Next? Five Crucibles of Innovation That Will Shape The Coming Decade”, I was particularly interested by Crucible 1; The Great Rebalancing. The “Great Rebalancing” in a nutshell refers to how the emerging markets of the world have several untapped opportunities that if harnessed correctly could not only greatly boost the revenues of the companies that invest in them but also improve the economic shape of that geography in general.

Perhaps my interest was piqued since I belong to Pakistan; an emerging market in every sense and also because before starting at Heinz I worked for Unilever Pakistan Ltd, a company that was living the exact same philosophy as envisaged by the article! For those of you who don’t know, Unilever International is an established Anglo-Dutch FMCG (Fast Moving Consumer Goods) that operates in the same market segments such as Nestle and Procter & Gamble in over a 100 countries.  While I was still an employee at Unilever there was an intentional shift in trying to win over rural markets and tap into consumer segments that were previously thought of as too “rural” or “agrarian” for their products. Unilever approached these markets with a 2 pronged strategy of (a) providing the same products in smaller, more affordable sizes and by (b) making the product resonate with the local culture and tastes.

The latter task was obviously the harder but through extensive market research and by sending teams to each area to help familiarize them with the local nuances, Unilever helped tailor their products according to the particular demands of that area/culture. An example of this was Unilever launching a product unique to the South of Pakistan that demanded a more traditional or stronger blend of tea then that which was being currently provided. The approval of this had to come through multiple steps from the Head Office in London and showed how serious Unilever Global was about tapping into untapped market segments even if it meant launching a whole new product for just one country out of more than a 100!

The results were outstanding. The new product(s) was immediately accepted and in fact the entire targeting of the “rural” market segments was an unprecedented success. Nestle Pakistan also invested in similar initiatives, strengthening their supply chain to reach areas that were previously thought of as too remote from main transport routes to be viable. The results of both these companies were documented in an article published on Bloomberg.net and can be seen on the following link http://www.bloomberg.com/news/2011-10-04/pakistan-terrorists-no-sales-bar-as-unilever-converges-with-nestle-retail.html

As documented the growth rates seen were unprecedented especially keeping in mind the political upheaval in the country during the relevant time period. I am curious however that with the United States being a fully developed economy are there still areas that could be classified as rural within the United States? I mean obviously there is hardly any area of the country which is inaccessible due to lack of infrastructure, but what I am trying to ask is there any area where modern day commodities have not permeated enough for local companies to focus on them in a similar manner to that done in Pakistan? If possible these areas could become the United States’ very own “emerging markets” within the obviously very well developed national spectrum.