Zarif Munir Reflects On BCG Report

Written by Zarif Munir

Some of the challenges of authoring a publication is ensuring the content is punchy, the title is catchy, and the audience feels engaged.  You never get it exactly right but one measure of success is whether the report is getting people talking. And in many respects BCG’s report on Bangladesh’s growing consumer class is certainly getting folks talking. I thought a small follow-up note would help those interested in the report.

1) What prompted this report?

As a firm and as partners BCG is always looking to answer tough questions, to seek out opportunities that others may not have thought about. The report comes from the paradox we observed: Bangladesh has a large population and steady economic growth, yet despite these strong fundamentals FDI on a per capita basis is low, valuations for strong companies trail peers in similar emerging markets, and many of the large multinational companies in Asia preferred alternative destinations for their dollars. The report is an effort to get to the core of the paradox from a consumers perspective. How optimistic are they about their future? What aspirations do they have and how are they thinking about meeting their needs? What role does technology have in the way they decide and consume? And why focus on the consumer? – because in every country in Asia we have seen large, vibrant populations with sufficient income have significant spillover effect – infrastructure, health, education, investment sentiment.. . the list goes on.

Zarif Munir2 BCG


2) What surprised us in the report?

While we were not terribly surprised by the optimism (most countries at inflection points demonstrate strong optimism about the future), what took us by surprise was the emphasis on quality when making purchase decisions. Across Bangladesh, there was a significant willingness to pay for quality. We recognize that there is a thriving grey market in Bangladesh and that the Middle and Affluent Consumer (MAC) base is small (10M people today), but the keen interest in finding products of quality and paying more went against our instinct that customers seek out the best deal / the lowest price. Second what struck us was how purchasing behavior was influenced by the role of the family. As a result there was a propensity to trade up on capital equipment that benefits the entire household. Typically what we have seen is that this trait is a leading indicator on how consumers will think about consumer discretionary spending (e.g. food, cosmetics, etc) and investments in next-generation improvement (health, education, etc)


3) What methods do you use to research the insights you present in the report?

The positive reaction to the report across all people we have met has been heart-warming. The methodology used to prepare this report is rather unique. First we segment the population not just based on income but also by spending patterns (we want to get to the segment who have enough and spend enough). Secondly we spend an inordinate amount of time trying to understand inflection points – at what income level, at what level of optimism, faced with what options would consumers start switching from the way they live and buy today to a new normal – trading up on categories, emphasizing different attributes when making purchase decisions. Finally where do these consumers go next – by looking at patterns from other markets and getting a sense for what products these consumers pursue, how they feel about financial security and where do they see the next generation going.

One idea thrown out at the end of the launch was a small chat where more questions could be answered. It would be my pleasure, so please look out for the invitation from SD ASIA  in coming weeks.



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