For years now it’s seemed like a one way bet: expand in the BRICS (the emerging markets of China, Brazil, India and Russia); go further afield to the likes of Indonesia and Vietnam and even, gulp, invest in the Middle East (until this year the fastest-growing region for most marcoms companies) and Africa.
Just at the minute it doesn’t look quite so clever.
In terms of the BRICS, Brazil is currently demonstrating about the same rate of economic growth as the UK and the people (chiefly the so-called new middle class) are revolting – even at the flagship football tournament the Confederations Cup. Adding insult to injury (from an adland point of view) they’re even using ad slogans to make their case.
Which is? That all these capitalist goodies that are supposed to be flowing their way aren’t. They’re going to big multinational companies and their chums in business and politics.
In China it’s slightly different – but not all that much. The Chinese government is trying to rein in spending to what amounts to the country’s massive black economy – dodgy outfits which have waxed fat, partly, on the tidal wave of money western companies – like WPP and Publicis Groupe – have ploughed into the country. But many of the grateful recipients don’t really exist as proper corporate entities.
They’re Chinese wide-boys who will disappear with the money leaving their western benefactors with red faces, at best.
India is still light years away from being a developed economy, let alone a developed society that, for example, knows how to treat women. And Russia is determinedly what Russia’s rulers have always wanted it to be: among other things, a dangerous place to do business.
As for the Middle East….Syria, Egypt.
Now clearly, in a ‘global’ economy (what a pain that is) big companies need to venture into uncharted territory. The difference now is that they think, wrongly, that they’ve charted it.
So the expansion of all the big marcoms groups – and some of their smaller brethren – into these markets is not the one-way bet they, and investors, thought it was.
It’s rather like Tesco’s ventures into central Europe, the Far East and, disastrously, the West Coast. It’s what gung-ho businessmen (they’re still nearly all blokes) do. But, even in the good times, they don’t make the same return in actual cash profit in these places as they do closer to home. That’s in the quiet times.
When things turn nasty in political terms (which they appear to be doing in this horribly unequal world), so might the numbers.