Lessons to learn from the youth of tomorrow

As the west looks to developing nations for growth, they must understand the different business practices, regulations, infrastructure, cultural differences and population makeup. For example, growth market populations are much younger – around a quarter of Western Europeans are under 25 compared to over 60% in places such as Nigeria, which is going to have a huge impact on the types of products in demand.

With this in mind, we decided to undertake a mobile-based research study designed to help businesses understand what young people in the UK and US think about the economy, personal finances, employment prospects and purchase intentions compared to their counterparts in the growth markets.

The survey, which we called the Young Consumer Confidence Index (YCCI), covered 5,600 16-34 year olds across six countries and revealed stark differences between the nations around consumer behaviour and attitudes.
Newfound confidence

First, we looked at confidence and employment prospects. What became clear is that young consumers in growth markets haven’t been jaded by a hard hitting recession and their confidence is being driven by a very positive outlook of their economy and future job prospects.

Young Chinese consumers have the overall highest confidence levels, indexing at 39, closely followed by Brazil ( 38 ) – Brazilians were also the most confident about both the future economic situation ( 72 ) and employment ( 76 ). Their optimism is more than likely being heightened by hosting the world’s two biggest sporting events in the next four years – the World Cup and Olympics.

In comparison, Britons index at just 10 and the US at 16. Britons on the other hand are 15 times less confident than the growth markets ( 4 vs. 57 ) about how the general economic situation will change in the UK over the next year and three times less confident ( 21 vs. 64 ) about their employment prospects over that time.

Spending power

These markets are beginning to feel the benefits of increasing wealth, confidence and education levels. In turn, these are creating a rise in demand for energy, technology and consumer products that simply no longer exists in the developed world.

In the YCCI, the growth markets indexed a massive 32 points higher in believing now is the right time to make big purchases such as electrical goods. Young Nigerian and Indian consumers have the strongest belief that now is the right time to be making big purchases (indexing at 29 ) followed by Brazil ( 24 ) and China ( 22 ) – in contrast, young Britons index at minus six (-6 ) and Americans at (-2 ).

I believe that there is a serious risk of young people in developed nations becoming the ‘lost generation’ of the future if nothing is done to increase their optimism about their future prospects. You only need to look at the latest unemployment rates to see how serious the situation is – when we conducted this survey 1.02 million young people in the UK aged 16-24 were unemployed, +37,000 on the same quarter in 2011.

Role of research

Market research can help do its part here by encouraging brands to find ways of resonating with these audiences and adapting to their cultures. The growth markets optimism despite economic, uncertainty could transfer into views on buying large purchases if it is approached correctly.

Market researchers in growth nations cannot simply apply the same techniques as they would do for western markets – in Brazil for example fear of violence is a real concern and it’s difficult to get inside people’s homes or even stop them in the street for a face to face interview. Cost is also a big barrier for companies considering traditional research methodologies.

Online research doesn’t have the issues over personal safety, but is hampered by the fact that not everyone has access to expensive PC’s and laptops, but what they do have access to is mobile phones and this is becoming an increasingly popular method for accessing the Internet.

Mobile opportunities

The YCCI was all captured via mobile devices to reflect this change in culture. Over a third of mobile users in China and Brazil only access the Internet through their mobile phone, a much cheaper alternative and this trend is continuing to grow.

Mobile devices have become integral to the lives of young consumers in growth nations, with many paying for goods, receiving wages, transferring money and carrying out m:commerce activities on their mobile phone. As the device is highly relevant to them, they are more likely to be engaged, give accurate and honest responses and have a higher completion rate.

Mobile makes it easier to connect with young people, essential in countries where a large percentage of the population is under 25. Thanks to improved Internet infrastructure, brands can even connect with those living in rural areas. It is also very quick to return data.

The market research industry in the west will always have more choices, as we just do not simply have the same problems as BRIC nations. But choice sometimes blinds us to the most obvious solutions.

An industry, who predominately is interested in consumer behaviour, should be researching consumers on the most relevant devices to them, which in the emerging markets just happens to be the mobile device.

As we become a globalised society it’s important the research industry understands the health of the world’s economy and in particularly the youth sector, whose optimism will shape the future of our economy.  It’s their concerns, hopes and aspirations that will arm us with the information we need to advise clients on how to resonate and communicate effectively with young people, both in growth and developed markets.