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food, leaving the average family
with a huge surplus with which
to buy nonessential items that
quickly become “necessities,” such
as cosmetics and gym membership.
India is perhaps about to embark
on this stage of economic
development. If so, this will have
an impact on the sales of a huge
range of everyday items.
The significance of this trend
lies in the numbers of people
involved. If India, over the next
five years, boosts its spending on
toilet paper to China’s per-capita
spending, the market growth in
India will be $8.4 billion ($6.72 x
1.25 billion population). For China
to catch up with the US would
imply market growth of $24.3 billion
($17.98 x 1.35 billion population).
And that’s just the increase in
market size—not the total market.
Exactly the same logic applies
across the market for ordinary
household goods throughout the
developing world. Already, China is
the world’s biggest market for luxury
items, such as Swiss watches,
jewelry, and cars. Over the coming
decades, China is also likely to
dominate sales of ordinary items
(such as toothpaste), and services
(such as insurance). The potential
sales volumes involved are huge.
Today, China is the world’s largest
car market, even though fewer than
10 percent of households own a car.In touch with reality
The television show Undercover
Boss sends senior executives
into low-level jobs in their own
companies, under alias andYOUR WORKERS ARE YOUR CUSTOMERS
disguise, to find out what the
business looks like from that
perspective. The show clearly
illustrates how those in charge of
a business are often unaware of the
opinions, insights, and feelings of
their customers and staff. Despite
a world of online praise and blame,
some companies are able to remain
in a bubble of self-delusion.
However, this is unlikely to be
true of an organization in which the
worker is also the customer. These
employees care about the product
or service because they experience
it themselves and realize that their
job security relies on customer
satisfaction and the company’s
commercial success. If a customer
waiting room becomes messy and
dirty, for example, staff-customers
will quickly draw attention to it.
In Europe, fashion retailer
Primark enjoys huge success
in the mainstream market. The
company turns runway fashion
speedily into low-priced garments
with a target market of 15–35-year-
olds. However, its growth was
instigated by an unusually elderly
senior management team. ByI will build a car for
the great multitude ...
[that] will be so low in
price that no man making
a good salary will be
unable to own one.
Henry Ford
US industrialist (1863 –1947)9080607040503020100181612148106420CAR OWNERSHIP (%)ANNUAL SALES (MILLION CARS)2005 2006 2007 2008 2009 2010 2011 2012Car sales in China
and India grew steadily
from 2005 to 2012. The
potential for sales is
huge—percentage
ownership in both
countries is tiny
compared to the US,
where ownership
is high and sales
remained static.
China
Car ownership
Annual sales
India
Car ownership
Annual sales
USA
Car ownership
Annual sales