NON-CONSUMPTION IS YOUR FIERCEST COMPETITION—AND IT IS WINNING
T
he Oxford dictionary defines competition as the person or people with whom one is competing, especially in a commercial
or sporting arena; the opposition. For businessdictionary.com, it stands for rivalry in which every seller tries to get what
other sellers are seeking at the same time. Bringing these definitions to life, a 2013 Fortune article titled: ‘The 50 Greatest
Business Rivalries of All Time,’ highlights competition between some of the world’s most well-known companies, pitting
Coke against Pepsi; Ford against GM; Nike against Reebok; Airbus against Boeing; Procter & Gamble against Unilever. These
examples embody the way we view competition. But the view is flawed.
The way we define competition and the method employed
by companies to assess the competitive landscape, leaves
out the most important competitor of all: non-consumption.
And nowhere is this feisty competitor more prominent than
in emerging markets. According to research from McKinsey
& Company, leading companies in the developed world earn
just 17 percent of their total revenues from emerging markets,
despite the fact that they represent 36 percent of global GDP.
Non-consumption is the inability of an entity (person or
organization) to purchase and use (consume) a product or service
required to fulfill an important job-to-be-done. This inability to
purchase can arise from the product’s cost, inconvenience and
complexity, along with a host of other factors none of which tend
to be limitations for the rich, skilled, and powerful in society. For
its part, a job-to-be-done arises when an entity is struggling
to make progress in a particular circumstance, such as when
someone gets sick and tries to recover. If there are not adequate
facilities that can aid their speedy recovery, then that person is
a non-consumer of basic health services.
Health, of course, is just one in a long line of sectors and industries
plagued by lack of consumption. Consider the markets for airconditioners, refrigerators, and automobiles in Nigeria. According
to market intelligence firm, Euromonitor, only 2.5 percent
of households have access to air-conditioners, compared to
2.3 percent in 2010, while just 19 percent of households have
access to refrigerators, up from 17 percent; and only 9 percent of
households have access to cars a mere one percent increase on
the 2010 figure. Compare these numbers with those in the United
States, where 83.4 percent of households have air-conditioners,
99.9 percent have refrigerators, and 86.5 percent have automobiles.
NON-CONSUMPTION IS THE
INABILITY OF AN ENTITY (PERSON
OR ORGANIZATION) TO PURCHASE
AND USE (CONSUME) A PRODUCT
OR SERVICE REQUIRED TO FULFILL
AN IMPORTANT JOB-TO-BE-DONE.
If non-consumption were a company in Nigeria, or in almost
any other emerging market, it would have a monopoly in
most industries. Let us consider the ownership of the three
products mentioned above in ten emerging markets and eight
frontier markets (those undergoing significant development
yet considered too small to be emerging). The statistics
below show the ownership percentages per household for
both refrigerators and air-conditioners and the number of
passenger vehicles per household in these different countries.
Emerging Market Data
*
**
Argentina
96.5%
38.3%
0.7
Brazil
98.1%
13.8%
0.8
China
87.6%
72.7%
0.3
India
23.8%
13%
0.1
Indonesia
44.2%
8.3%
0.2
83%
12.9%
0.8
Mexico
South Africa
73.4%
5.3%
0.4
Turkey
99%
18.4%
0.5
Egypt
96.9%
6.6%
0.2
Iran
87.6%
16%
0.5
78.98%
20.53%
0.45
AVERAGE
* % of household
- * * number per household
Frontier Market Data
*
*
**
COUNTRY
Cameroon
16.5%
N/A
0.1
Croatia
98.8%
27.2%
0.9
Kenya
8.6%
1.7%
0.1
Macedonia
97.8%
26.1%
0.6
Morocco
86.6%
15.4%
0.3
Nigeria
19.0%
2.5%
0.1
Tunisia
96.0%
21.6%
0.3
Vietnam
55.0%
10.0%
0.1
59.8
14.9%
0.31
AVERAGE
* % of household
- * * number per household
Source: Euromonitor
38 Emerging Markets Business Summer 2016 • Issue No. 1
*
COUNTRY