Seeing Value in the MIST

Global marketers learned long ago that focusing on the wealthiest Western countries could only grow their businesses to a certain extent. They turned their attention to the emerging economies with the most potential in terms of size and growth – the BRIC markets. Yet many other countries offer promise. These countries include Mexico, Indonesia, South Korea and Turkey – otherwise known as the “MIST” markets. And they are not as insubstantial as their acronym might suggest: based on their consumers’ values, they present solid opportunities for companies seeking to expand their global presence.

Half a billion people live in the MIST countries. But that is not the only reason to focus attention on them. They are also vibrant consumer markets, each with their own distinctive cultures and sets of values.

Mexico gravitates towards the “People” corner of the Values space, with some pull towards the center. Turkey looks similar but leans toward the “Traditional” corner. In stark contrast, Indonesia lies firmly within the “Power” quadrant but leans towards the “Traditional” area. South Korea exhibits an unusual pattern, with values spread along the “Power-Pleasure” axis.
The four MIST countries offer a wide range of opportunities indeed, particularly to the FMCG industry and retailers.

Mexico connects North and South America – physically, culturally and economically. As far as consumer attitudes are concerned, however, Mexicans tend to share more with their Southern neighbors than their Northern ones. That is to say, Mexican citizens are very enthusiastic and aspirational. Technology is a particular passion of theirs. It is even seen as a way to combat one of the country’s most persistent problems – drug cartels.

Mexican consumers exhibit high levels of optimism and intent, as GfK’s latest Mood of the World survey shows. Four out of five Mexican citizens are either somewhat or very confident that they will be better off in the coming year, a value that is up 21 percentage points from 2009 and which also lies well above the global average of 59%. Nearly all (90%) say they plan to buy at least one of seven big ticket items in the next year or two, with personal and home electronics being the most likely purchases.
Even with their upbeat approach, Mexicans are not spendthrifts. Most employ savings strategies of various kinds when they shop. Their top-ranked tactic is to shop carefully for everyday necessities; 54% have done this in the past year versus the 43% global average.

Mexicans – even those in lower income classes – place a premium on well-known brands in their purchase decisions. But name recognition alone will not win their loyalty. Seven out of ten Mexicans say that if they aren’t satisfied with a product or service they choose an alternative. This is significantly higher than the 55% global average.

Youthful and enthusiastic Mexicans have a passion for life. They exhibit particularly high levels of interest in technology, movies and music, and are more likely than other consumers to make recommendations in these and other areas. This passion for life extends to personal appearance. On average, Mexicans spend 11 hours a week grooming themselves, compared with seven hours for global consumers in general. They are also more likely to carry skincare and cosmetic products with them when they leave the house. Attitudes like these offer enormous opportunities to brands and retailers, suggesting that portable packaging is key for this youthful and active market. 

Let’s look at the second MIST country, Indonesia. With the world’s fourth largest population, this nation has quietly emerged as a player on the world stage without any apparent effort. Its economy is growing at a good rate, faster than the other three MIST countries. The country’s middle class is on the rise, boosting the prospects of industries that range from American automotive to Australian beef. It’s no surprise that Indonesians are optimistic about the future – 85% feel confident that they will be better off in a year’s time.

Many Indonesians adhere to a traditional set of values. Indeed, faith is this Islamic country’s top-ranked personal value, and religion is people’s top interest by far (48% versus 19% globally). Even so, Indonesians are somewhat more likely to qualify as status-oriented Achievers than Traditionalists, although both groups are overrepresented in the country.
This dual nature expresses itself in Indonesians’ consumer attitudes. Most rate their standard of living as above-average. And relatively few employ savings strategies when they shop. At the same time, they are less likely than the 64% global average to plan a big ticket purchase in the next two years, at just 46%.

Indonesians are very concerned about safety and security, which in turn may explain why 56% only buy products or services from a trusted brand. This is 20 percentage points higher than the average global consumer. Trust is the top-ranked factor in their brand decisions for food, beverages, health products and personal care products. They also place great reliance on advertising as a trustworthy source of information about what to buy, especially TV commercials.

In addition to appealing to Indonesians’ need for safe products, beauty marketers might want to think about focusing on how their products can enhance health and inner wellbeing rather than outward appearance. Indonesians are more interested in health and fitness than personal appearance (36% compared with 23%). Health and fitness, along with environmental issues, are the only two product areas out of 12 where Indonesians are more likely than average to make recommendations to other people.

South Korea is the most developed and affluent of the MIST markets. This not only shapes consumers’ value orientation, but also their shopping attitudes and behavior. In the wake of the global economic crisis, however, this is not necessarily a good thing. South Koreans are still experiencing high levels of economic distress. They worry about recession and unemployment, are not confident that their personal situation will improve soon, and have a reputation as demanding consumers.

Although their incomes are relatively high in objective terms, South Koreans don’t feel well off: as the 2013 Mood of the World report shows, 44% say they are “just getting by”. Like many Western consumers, South Koreans are highly likely to be cutting back on a number of purchases and to be employing money-saving strategies, led by the distinctly Western tactic of using coupons. Their top reason for liking or following brands on social media sites is to receive discounts or other deals.Even so, South Koreans have aspirations. One in three qualifies as an ambition-focused Achiever, followed by 24% who are fun-loving Hedonists. This combination means that many will be interested in seeking innovative products, either to enhance social status or because they are fun to explore and experiment with. They are interested in a host of topics, ranging from movies to travel, technology and personal appearance. Additionally, more than three in four plan to buy a big ticket item in the next year or two, such as electronics, furniture or a car.

Despite their focus on bargain shopping, South Koreans ultimately care more about a brand’s quality than its price. Almost half (49%) think it is better to buy well-known brands because they can rely on their quality, which is nine points higher than global average. Furthermore, how a brand’s quality compares to other brands is their top-ranked factor in making brand decisions.

As befits one of the world’s most technologically oriented cultures, South Korean consumers rely heavily on online sources in their purchase decisions. Of South Korean consumers, 67% say online reviews are among their most trusted sources – nearly twice the global average of 35%. They are also more likely to prefer buying things online to in stores. At 32%, the number of South Koreans for whom this applies in terms of health and beauty products is much higher than the 8% global average.

A shorter version has been published in Asia Research Magazine, Q2 2014.

Author: Diane Crispell, Senior Consultant  Global Consumer Trends at GfK

Diane has been providing insights into consumer trends in the global arena for 16 years and in the US for 32 years. Her background in international demography enables her to see a “big picture” perspective of the consumer marketplace. Diane has provided countless analyses, newsletters, reports and presentations for a broad-based client list that includes many of the world’s largest global consumer companies and brands.