mass customisation in emerging markets
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Mass customisation in emerging marketsCorporate executive survey highlights
CHINA
INDIA
GERMANYFRANCE
JAPAN
NETHERLANDS
THAILAND
MALAYSIA
INDONESIA
VIETNAM
PHILIPPINES
US
UK
Half of the respondents were from companies that had annual revenues of at least US$500m.
Respondents525 business leaders from companies headquartered in:
The march of technology and rising wealth are changing the nature, scope and scale of product mass customisation, especially in the developed world.
This survey conducted by the EIU was aimed at exploring the potential for mass customisation and personalisation of goods and services in emerging markets.
BRAZIL
CHINA
INDIA
GERMANYFRANCE
JAPAN
NETHERLANDS
THAILAND
MALAYSIA
INDONESIA
VIETNAM
PHILIPPINES
US
UK
Half of the respondents were from companies that had annual revenues of at least US$500m.
Respondents525 business leaders from companies headquartered in:
Respondents
50%of respondents were c-level executives
25%of respondents were manager level
25%of respondents were senior executives
36%Mass production,
the creation of standardisedproducts and/or services.
51%Mass customisation,
tailoring products for specificcustomer groups.
47%Personalisation,
tailoring products forindividual customers.
24%Co-creation,
the direct involvement of customersin the design of new products.
1%None of the above.
0%Do not know.
Which of the following form part of your company’s product strategy over the next three years? Select all that apply.
Mass customisation and personalisation both figure strongly in the product strategies of companies that were surveyed.
36%Mass production,
the creation of standardisedproducts and/or services.
51%Mass customisation,
tailoring products for specificcustomer groups.
47%Personalisation,
tailoring products forindividual customers.
24%Co-creation,
the direct involvement of customersin the design of new products.
1%None of the above.
0%Do not know.
Which of the following form part of your company’s product strategy over the next three years? Select all that apply.
55%
50%
59%
Planning to mass customise over the next three years Planning to personalise over the next three years
54%51%
43%
30%
28% 43%
43% 60%
48% 60%
48%43%
52% 55%
37%
37%
Energy
Consumer discretionary
Consumer staples
Information technology
Materials
Industrials
Healthcare
Financial
Telecommunications
Utilities
68%
30 40 50 60 70
Mass customisation is central to the plans of energy, telecoms and financial services firms.
Personalisation is significant for healthcare, industrial goods and IT companies.
55%
50%
59%
Planning to mass customise over the next three years Planning to personalise over the next three years
54%51%
43%
30%
28% 43%
43% 60%
48% 60%
48%43%
52% 55%
37%
37%
Energy
Consumer discretionary
Consumer staples
Information technology
Materials
Industrials
Healthcare
Financial
Telecommunications
Utilities
68%
30 40 50 60 70
East Asia
30%33%
South-EastAsia
18%
22%
WesternEurope
30%
25%
South Asia
22%20%
NorthAmerica
21%23%
Central & South
America
15% 14%
Middle East & North Africa
19%22%
EasternEurope
17%
21%
Regions where product demand will be greatest in the next three years:Respondents could pick up to three answers.
Mass customised products Personalised products
With its diverse and relatively fast growing economies, Asia is expected to lead demand globally for mass customised and personalised products.
East Asia
30%33%
South-EastAsia
18%
22%
WesternEurope
30%
25%
South Asia
22%20%
NorthAmerica
21%23%
Central & South
America
15% 14%
Middle East & North Africa
19%22%
EasternEurope
17%
21%
Regions where product demand will be greatest in the next three years:Respondents could pick up to three answers.
Mass customised products Personalised products
Level of premium that can be added to flagship products in the next three years:
1-10%
11% 10%
11-20%
27%
22%
21-30%
24%
32%
31-40%
16% 15%
41-50%
8% 7%
More than50%
9% 9%
No premiumcan be added
2% 2%
Do notknow
2% 2%
Mass customised products Personalised products
For companies with the right resourcesand capabilities, personalisation appears to be a more lucrative product strategy than mass customisation.
Companies expect to attach higher price premiums to personalised products compared with mass customised ones.
Level of premium that can be added to flagship products in the next three years:
1-10%
11% 10%
11-20%
27%
22%
21-30%
24%
32%
31-40%
16% 15%
41-50%
8% 7%
More than50%
9% 9%
No premiumcan be added
2% 2%
Do notknow
2% 2%
Mass customised products Personalised products
Lack of quality transport infrastructure
Lack of reliable distribution options
Inadequate Internet access/communications networks
Shortage of local marketing skills
Inadequate payment systems
Lack of working capital
Lack of insights about customer demand
Shortage of local production skills
Inadequate or insufficient financing options353025201510
16%
32%
33%
21%
23%
11%
17%
23%
33%
The main external obstacles to overcome to pursue a strategy of mass customisation and/or product personalisation in emerging markets?Respondents chose up to three answers.
Corporate executives face considerable challenges to executing their mass customisation and personalisation strategies in emerging markets.
Chief among them: lack of insights about customer demand, insufficient working capital and a shortage of reliable distribution options.
Lack of quality transport infrastructure
Lack of reliable distribution options
Inadequate Internet access/communications networks
Shortage of local marketing skills
Inadequate payment systems
Lack of working capital
Lack of insights about customer demand
Shortage of local production skills
Inadequate or insufficient financing options353025201510
16%
32%
33%
21%
23%
11%
17%
23%
33%
The main external obstacles to overcome to pursue a strategy of mass customisation and/or product personalisation in emerging markets?Respondents chose up to three answers.
16%78% 7%
24%69% 8%
Demand for product personalisation will soon be greater in emerging markets than it is in developed markets.
27%63% 11%
Emerging-market companies are better positioned than developed-market companies to meet demand for personalisation in their markets.
In three years, no producer will be able to compete without the build-to-order abilities.
Agree Neither agree nor disagree DisagreeValues may not add up to 100% due to rounding
There were few doubts that demand for personalised products will be greater in emerging markets than in developed markets.
16%78% 7%
24%69% 8%
Demand for product personalisation will soon be greater in emerging markets than it is in developed markets.
27%63% 11%
Emerging-market companies are better positioned than developed-market companies to meet demand for personalisation in their markets.
In three years, no producer will be able to compete without the build-to-order abilities.
Agree Neither agree nor disagree DisagreeValues may not add up to 100% due to rounding
24%Neither agree nor disagree
69%Agree
7%Disagree
Mass customisation and personalisation require new approaches to financing supply-chain operations.
However, the speed and agility required are expected to strain supply-chain financing options. New thinking will be required.
24%Neither agree nor disagree
69%Agree
7%Disagree
Mass customisation and personalisation require new approaches to financing supply-chain operations.
Expectations about how mass customisation and personalisation will affect financing needs over the next three years:Respondents chose all answers that applied.
Increase the need for real-time payments to suppliers
33% 33%
30%
3% 3%
28%
Require more long-term capital investments
Require higher borrowings for working capital
Lead to increased frequency of payments to suppliers
Lead to longer payment terms to suppliers
Require more flexible financing options
None of the above
32%29%
41%37%
24% 26%
28% 31%
45403530252015105
Mass customised products Personalised products
The biggest impact of customisation and personalisation on supply-chain financing will be the need for more long-term capital investment to build capabilities, particularly in Asia’s emerging markets, where demand is expected to be greatest.
Expectations about how mass customisation and personalisation will affect financing needs over the next three years:Respondents chose all answers that applied.
Increase the need for real-time payments to suppliers
33% 33%
30%
3% 3%
28%
Require more long-term capital investments
Require higher borrowings for working capital
Lead to increased frequency of payments to suppliers
Lead to longer payment terms to suppliers
Require more flexible financing options
None of the above
32%29%
41%37%
24% 26%
28% 31%
45403530252015105
Mass customised products Personalised products
To uncover more insights about mass customisation in emerging markets, go to http://growthcrossings.economist.com/report/made-to-order/